The Myth of Unfree Trade


By Ashley Mergen

In case you missed it, the Washington Post and Chicago Tribune have recently featured pieces on the myth of unfree trade, knocking at critics of two ambitious trade pacts the U.S. is currently pursuing. Unsurprisingly, the 12-nation Trans-Pacific Partnership (TPP) Agreement and the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) have recently become the object of anti-trade affections. However, when you cut through the hullabaloo and histrionics, you’re actually left with two well-positioned trade agreements destined to benefit U.S. jobs and the economy, as Washington Post editorial writer Charles Lane puts it:

The United States already has bilateral free-trade agreements with six of the TPP nations — Canada, Mexico, Australia, Singapore, Chile and Peru — and runs trade surpluses with the last four. These countries account for 80 percent of U.S. merchandise trade with the TPP area. So for that huge segment, the deal represents a mere tweak to the status quo….

Beyond its economic impact, the TPP is crucial geopolitically; it’s a key component of Obama’s “pivot to Asia,” whose goal is to counter the rise of China and commit the region to U.S.-style reciprocal free trade rather than Beijing’s mercantilist model.

If it works, the result would be a more stable Pacific region, with all the benefits, economic and otherwise, that entails. The usual suspects are fighting hard against the TPP. Is Obama prepared to fight just as hard for it?

The Chicago Tribune editorial board sugarcoats nothing, saying that TPP and TTIP would be a “huge positive impact” because:

Free-trade agreements eliminate tariffs, red tape and other barriers to doing business across borders. They make the common marketplace bigger and more efficient, which means more money-making opportunities. Over time, sales go up, prices go down and the pace of economic activity increases.

In order to maximize the benefits of free trade with the Asia-Pacific, EU, or elsewhere, the United States and participating parties should open access to new markets by seeking meaningful and high-standard rules, like in the space of intellectual property rights. As U.S. Chamber of Commerce President Tom Donohue qualified in his 2014 State of American Business Address, we should always trade up:

We must have a high-quality agreement that opens markets for manufacturers, farmers, and service providers—and fosters the digital and creative economies. And TPP must include a strong intellectual property plank in order to earn our unqualified support and that of the Congress.


Subscribe for updates from GIPC