It’s widely treated as an article of faith that, if Donald Trump makes good on his vow to rip up our trade deals, he’ll seek to re-negotiate them in a manner that helps American workers. After all, he’s a “populist” who vows to remake the GOP as a “workers party,” so surely any renegotiated deals on trade — his signature issue, the one that cemented his bond with Rust Belt working class whites — will follow suit, right?
Maybe. But here’s another plausible outcome: Whatever provisions on trade Trump does pursue on behalf of workers (such as tariffs — never mind whether this would actually help them), Trump very well may also seek to re-craft our trade deals in ways that favor corporations.
Don’t take my word for this. Indeed, note that business groups themselves believe this is an actual possibility.
Politico reports today that business lobbies, such as the U.S. Chamber of Commerce, are privately gearing up for a campaign to persuade Trump that, if he does seek to renegotiate the North American Free Trade Agreement, he should do so in ways that help them:
So far, Trump has offered few details about what changes he’d like to make to the pact, other than threatening to withdraw from it entirely unless Mexico and Canada agree to new terms.
Business groups are hoping they can persuade him to instead “fix” the agreement in ways that will benefit them.
In an ironic twist, many business groups hope Trump will steal ideas from another trade agreement — the Trans-Pacific Partnership — as he seeks to upgrade NAFTA. That should be possible, since both Canada and Mexico are part of the 12-nation deal that Trump is vowing to jettison on his first day in office.
Economists I spoke to today worry about one particular aspect of this: The battle over the proper length of patent protections for pharmaceutical products, which was at the center over the fight over the TPP. They point out that it’s perfectly plausible to see Trump siding with Big Pharma in the push for longer patent protections — which could have untold consequences for the world’s poor.
During the negotiations over the TPP, the pharmaceutical industry pushed hard for 12 years of copyright protection for drugs that could treat cancer and other deadly diseases, as part of a broader corporate push for longer patent protections on a range of products, including in the fields of entertainment and software. The Obama administration seemed to side with Big Pharma, though their position was never entirely clear. The argument in favor of longer patent protections was that it would foster innovation and help the industry here at home, thus helping U.S. workers, a case that was joined by some Democrats in Congress with major pharmaceutical presences in their states.
Arrayed on the other side were health groups like Doctors Without Borders, which argued that the long protection period would require other countries participating in the TPP to “limit generic competition and therefore increase the cost of medicine” in them. The AIDS research group amfAR has argued that these provisions could drive up drug prices in the developing world and hamper the global battle against the disease. Meanwhile, other Dems in Congress argued against the lengthy protections on the grounds that they drive up drug prices, hurting lower-income Americans, presumably including working class whites (who supported Trump).
Dean Baker, a progressive economist and critic of American trade policy, points out that Trump has criticized China for failing to honor the protection of U.S. intellectual property. Baker argues that this strongly suggests that Trump, in seeking to renegotiate NAFTA (if this ever happens), will likely side with corporations in the push for longer and stronger patent protections. Baker emails me:
In his campaign Trump raised a long list of complaints against our trading partners, most importantly China. The list includes managing currency values to preserve a trade surplus, inadequate market access to our firms, and the failure to respect U.S. copyrights and patents, most importantly on prescription drugs.
Given his announced appointees, it seems very likely that he will prioritize the demands that serve corporate interests, not U.S. workers. In particular, he is likely to continue the push of prior administrations for longer and stronger patent protections on prescription drugs.
It is these protections that make drugs expensive….The industry has placed a priority of making people in developing countries pay more for their drugs. This both blocks off a potential source of cheap drugs to people in the United States and prevents the sort of dramatic contrasts that we see today between the list price of [brand name drugs] and their generic version. It is likely that Trump will adopt the pharmaceutical industry’s agenda in this area. This is bad news for workers in the U.S., and obviously very bad news for people in the developing world.
This also gets at a poorly understood aspect of Trump’s “populism.” Trump’s agenda on trade is often described as similar to that of progressive free trade skeptics such as Bernie Sanders. But Trump differs dramatically from progressives in one key respect: Trump’s stated “America First” ethic does not appear to allow for any concern over how trade deals might impact the developing world.
Sanders, for instance, has spoken about the plight of the global poor, aligning himself with Pope Francis’s call for a more “moral” global economy. Progressives criticize international trade deals for their impact on workers in America and on people in developing countries abroad. Trump’s trade talk is all about winning for America. It’s part of a zero sum vision in which America wins when our foes — whoever he designates them to be — lose. Should Trump side with the pharmaceutical industry in any coming battle over longer patent protections, it will be debatable whether securing them would even constitute “winning” for America, but beyond that, it could have untold consequences in the developing world.
And so, this is a key thing to watch for: If and when Trump makes good on his vow to renegotiate our trade deals, it’s plausible that the very same corporate elites who had a seat at the table during the battle over the TPP will have just as good a seat once again. Business groups certainly think this is a very real possibility.