November 20, 2016
The NYT ran a major article warning that a Chinese led trade deal, involving a number of countries in East Asia and the Pacific region, was likely to move forward more quickly with the demise of the Trans-Pacific Partnership (TPP). This is reported as being an ominous outcome that should concern readers.
This is the opposite position that economists generally take toward efforts to reduce trade barriers. In most economic models, when some countries reduce their trade barriers and therefore increase economic growth, it also benefits countries who are not party to these trade deals.
This was the reason that the United States generally supported the process through which European countries came together, first in the common market and then in the European Union. The argument was that a more economically prosperous Europe would be a better customer for U.S. products and also a better competitor. In the latter role, Europe would provide economic gains to U.S. consumers as well by offering better and/or lower cost products.
It is interesting that the NYT and other proponents of the TPP are now prepared to turn standard economic logic on its head in order to push this pact. For those without a stake in promoting the TPP, the greater economic integration of the region should be viewed positively.
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