You down with TPP?

[Mr. Smith]

Eh, there are good and bad aspects of it. I'm not going to pretend to be an expert though.

I think this describes like 80% of voters...

Then you have to apply some form of Sturgeon's Law to that one.

[I’m not Stu]

Eh, there are good and bad aspects of it. I'm not going to pretend to be an expert though.

That is true, I have been waffling on this issue. I just changed my mind on this again. I now oppose it. I support free trade, but not these kinds of deals.

[muon2]

I think there's an important distinction that gets to the core of the debate about TPP and other trade treaties. Is the treaty about lowering tariffs and other barriers to trade? Or, is the treaty about making it easier to move capital? Of course, treaties can be about both which makes them hard to sort out.

Let me use the MA textile industry as an analogy. The existence of the national government as a regulator of interstate commerce essentially created a free trade zone within the US among the sovereign states. In the early 1800's, MA and much of New England used the capital of its coastal cities to create textile mills based on the hydropower of its inland rivers. They could import raw materials from the South and sell finished textiles back again. By the beginning of the Civil War the single city of Lowell, MA had more textile output than the entire Confederacy.

As labor costs from the native workforce went up, waves of immigrants throughout the 1800's kept the mills in business. However, immigration couldn't offset changes in technology and state laws. The steam engine meant that hydropower was no longer required for textile milling. Favorable labor laws in MA allowed for major strikes and collective bargaining. The US also created a market for relatively free movement of capital as well as trade, so in the early 1900's the mills started relocating to the Carolinas and other southern states where labor was cheap and coal could be imported for the steam engines. By 1940 the mills were largely gone and 40% of population of Lowell was on the dole.

It took decades and another new technology for the band of MA mill cities to come back as the high-tech Route 128 corridor in the 1980's.

So what does this analogy suggest to me? It suggests that innovation moves most easily, followed by capital, then finally labor. If capital barriers are protecting labor in certain industries, then those pockets of labor are potentially at risk. If trade deals incentivize capital flow as well as reduce trade barriers then those pockets of labor in expensive or highly regulated areas will be negatively impacted. That can be the case even as a larger population benefits from the increased trade.