How TPP Critics Muddle Facts, Fictions, and Unfounded Fears: A Point-by-Point Analysis

Nigel Cory Stephen Ezell September 26, 2016
September 26, 2016
At stake in the debate over the TPP is the very future of globalization: Will robust economic integration and trade liberalization continue, or will opponents halt or reverse it?

Not all criticisms of the Trans-Pacific Partnership (TPP) should be treated equally. It is understandable and appropriate that the TPP has generated heated debate. As policymakers evaluate the debate surrounding the agreement, there will be critics who point out where the deal falls short of the ideal, but who, overall, rightly believe the TPP is a high-quality, groundbreaking trade agreement that represents the sensible next step toward a more globally integrated and prosperous economy. But there will also be vociferous critics who oppose not only individual terms of the TPP, but more importantly, its broader vision.

The latter group’s opposition doesn’t stem from the details of the TPP, but from the very idea of the agreement: enabling greater global integration and getting other nations to adopt rules and regulations similar to those already in place in the United States. These opponents want to roll back globalization and revert to regionalized economies that are local (not global), small (not corporate), protected (not competitive), and static (neither innovative nor disruptive). They also want a world in which intellectual property rules are largely absent so that people can go online and do whatever they want on the Internet, such as consuming legal content without paying for it, or getting access to pharmaceutical drugs without paying their fair share.

In many ways, the real debate over the TPP is a debate about the kind of world we want—either globally integrated with the economic benefits that flow from that, or localized and fragmented with the stagnation that stems from that. Indeed, at stake in the debate over the TPP is the very future of globalization: Will robust economic integration and trade liberalization continue, or will opponents halt or reverse this process?

This report analyzes the main criticisms that have been leveled against the TPP, assessing whether they are valid or invalid, and finds that while there are a couple of facets where the TPP’s terms could have been strengthened, the overwhelming preponderance of objections to the TPP are misguided, overstated, or just plain wrong on the facts. The report analyzes the following criticisms:

  • Invalid Claim: The TPP’s dispute settlement process for investors making claims against states is an attack on national sovereignty.
    Fact: The settlement mechanism for investor-state disputes cannot force states to change laws, only to pay monetary damages. The TPP sets a common, higher-standard approach to protect investors against some fundamental risks, while including explicit language underscoring the governments’ right to regulate.
  • Invalid Claim: The TPP’s intellectual property rules only benefit big corporations at the expense of consumers and workers.
    Fact: Intellectual property protection is essential to firms—and their workers—throughout an economy, whether large or small, traditional or high-tech, or goods- or services-based.
  • Invalid Claim: The TPP’s technical protection measures, commonly used to protect copyrights in gaming consoles and in online platforms for movies, music, and games, are an attack on innovation, fair use, and the freedom to tinker.
    Fact: Technical protection measures facilitate innovation in the digital economy. Furthermore, the TPP includes provisions to manage instances where there are legitimate cases for circumventing this protection.
  • Invalid Claim: The TPP is a threat to free speech by not exporting the U.S. “fair use” doctrine.
    Fact: The TPP uses the same criteria to define fair use that are already in place around the world, because with different legal systems, there is no one-size-fits-all legal approach.
  • Invalid Claim: The TPP’s rules prohibiting forced software source code disclosure will impede governments’ ability to regulate companies.
    Fact: The TPP’s rules focus on preventing cases where governments ask for source code disclosure upfront as a mercantilist condition of entry, and contains exceptions to allow for scenarios where source code is disclosed as a matter of business after entry, such as for regulatory concerns.
  • Invalid Claim: The TPP turns Internet service providers (ISPs) into copyright police.
    Fact: There is nothing in the TPP that requires ISPs to monitor their systems for copyright infringement. Instead, the TPP sets out how countries can provide a safe harbor from liability for ISPs when their users infringe content. The TPP actually makes this protection contingent on there being no active network monitoring. 
  • Invalid Claim: The TPP’s trade secret protections are unnecessary, will restrict entrepreneurship and innovation, and will be used to target whistle blowers and journalists.
    Fact: Trade secrets need protection because they are both highly valuable and increasingly digital, and thereby at heightened risk of cyber theft. These provisions are strictly focused on trade secret theft in commercial scenarios, where there is commercial or financial gain, with limitations and exceptions that protect public interest disclosures by whistleblowers.
  • Invalid Claim: The TPP is a threat to privacy because it allows “cybersquatters” to be unmasked.
    Fact: The TPP requires common-sense rules to address cases whereby people acting in bad faith seek to profit from registering domain names that are the same or similar to well-known trademarks—a form of piracy and fraudulent behavior. 
  • Invalid Claim: The TPP is a threat to privacy as rules to protect cross-border data flows are an attack on privacy.
    Fact: Data does not need to be stored locally to be secure or to maintain privacy protections. Companies that have legal nexus in a country are subject to its privacy and cybersecurity laws and regulations—moving data overseas, or storing it elsewhere, does not give the company a pass to ignore a nation’s laws.
  • Invalid Claim: The TPP will inhibit patient access to medicines and make them unaffordable.
    Fact: The TPP will have virtually no impact on access to the vast majority of the world’s essential medicines, as more than 92 percent are already off-patent. The TPP will instead help preserve a biomedical innovation ecosystem that enables the creation of new drugs, thereby preserving access by ensuring their existence.
  • Invalid Claim: The TPP does not do enough to protect workers and the environment.
    Fact: The TPP establishes the strongest protections for workers and the environment in any U.S. trade agreement ever signed and makes these provisions fully enforceable.
  • Partly Valid, But Irrelevant Claim: The TPP was negotiated in secret.
    Fact: Trade agreements need to be negotiated privately if countries are to best advance their interests. Moreover, the U.S. Congress is the democratically elected body that ultimately decides whether the agreement is in the United States’ interest or not.
  • Valid Claim: The TPP does not do enough to stop currency manipulation.
    Fact: The TPP is a missed opportunity to put rules in place rules to limit countries’ ability to use currency intervention as a viable trade and economic policy tool to shift advantage in their favor.

The TPP represents a much-improved framework for global innovation and trade, and it marks a significant step forward in establishing competitive, innovation-enabling, market-based terms of trade and commerce throughout the Asia-Pacific region. As policymakers in the United States and elsewhere consider the TPP, they need to carefully consider both the individual parts of the agreement and its whole—on balance, despite minor shortcomings, do they think the TPP is in their country’s best interest? When they weigh all of the evidence, the answer should be yes. 

How TPP Critics Muddle Facts, Fictions, and Unfounded Fears: A Point-by-Point Analysis