R.I.P., Free-Trade Treaties?
Recently, both of them have argued that the T.P.P. isn’t primarily a trade agreement at all, in the traditional sense of deals that aim to eliminate tariffs, cut prices for consumers, and allocate productive resources according to the law of comparative advantage, which David Ricardo promulgated in the early nineteenth century. Rather, the T.P.P. is largely a business-driven effort to extend more international protection to the investments, patents, and copyrights of major U.S. corporations.
“Why do some parties want this deal so much?” Krugman asked on his Times blog, in March. “Because as with many ‘trade’ deals in recent years, the intellectual property aspects are more important than the trade aspects.”
.. Another conspicuous absentee was Columbia’s Joseph Stiglitz, who served in the Clinton Administration, and who has emerged as a prominent critic of the T.P.P. Evidently, Summers, Stiglitz, and Krugman—perhaps the three most famous economists in the country—all agree with Hillary Clinton, who said over the weekend that President Obama should listen to the Congressional Democrats
.. In short, the Democratic Party’s intellectual consensus on free trade has been shattered, and it’s pretty clear why. The fact that, as Summers noted, tariffs have already come down is part of the story. Another factor is the general hostility toward the pharmaceutical industry and other corporate rent collectors, and toward the secrecy that pervades trade negotiations. But the bigger story is that, so far, free trade and globalization have failed to deliver the material benefits to ordinary Americans, and particularly to American workers, that were advertised. Over time, Democratic politicians and economists have been forced to acknowledge this fact.
..A 2013 study by David H. Autor, David Dorn, and Gordon H. Hanson found that rising Chinese imports accounted for about a quarter of the decline in U.S. manufacturing jobs between 1990 and 2007.