Fri, Mar 07, 2014 - Page 9 News List

Why TPP’s failure would be no big deal

By Paul Krugman  /  NY Times News Service

In short, there is not a compelling case for this deal, from either a global or a national point of view, nor does there seem to be anything like a political consensus in favor of it abroad or at home.

Abroad, the news from the latest meeting of negotiators sounds like what one usually hears when trade talks are going nowhere: assertions of forward movement, but nothing substantive. In the US, both US Senate Majority Leader Harry Reid and House of Representatives Minority Leader Nancy Pelosi have come out against giving Obama crucial “fast-track” authority, meaning that any agreement can receive a clean, up-or-down vote.

So what I wonder is why the US president is pushing the Pacific trade pact at all. The economic case is weak, at best, and his Democratic Party does not like it, so why waste time and political capital on this project?

My guess is that this is a case of a combination of Beltway conventional wisdom — “Very Serious People always support entitlement cuts and trade deals” — and officials caught in a 1990s time warp, still living in the days when New Democrats tried to prove that they were not old-style liberals by going all in for globalization.

Yet whatever the motivations, the push for TPP seems almost weirdly out of touch with both economic and political reality. So do not cry for TPP, if the big trade deal comes to nothing — as seems likely — it will be, well, no big deal.

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