November 11, 2014
The NYT told readers misled readers in its description of the Trans-Pacific Partnership (TPP). It told readers:
“The American plan [the TPP] would require each country to open even some of its most fiercely protected markets to foreign goods and services, which could produce a surge in trade.”
While the agreement is pursuing some trade openings, notably in agriculture, it is not clear how far they will go since there is much political resistance to these openings. On the other hand, it also calls for increased protectionism in the form of stronger patent and copyright monopolies. These will raise prices; they are equivalent to privately imposed taxes.(Generic drugs can sell for less than one percent of the patent protected versions, implying a tax equivalent of more than 10,000 percent on the free market price.)
By raising prices and reducing purchasing power the result can be a reduction in trade. Without seeing the final deal, the NYT has no ability to assess whether the trade increasing aspects to the deal will be larger than the trade impairing aspects of the deal. In other words, the “surge in trade” is just making stuff up.
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