Wednesday, October 07, 2015

A shit deal

MFAT has released its PR on the TPP, trying to convince us how great it is by talking up the gains. Except that when you look at them, these gains just aren't very big. Manufacturing, for example, is expected to benefit by $10 million on $7 billion of current exports - which is margin of error stuff. For other sectors, the gains are in the region of 1% of current exports - hardly the economic nirvana we were promised. And where its more significant - meat and dairy, where its ~2 - 2.5% of current exports - there's the caveat that these figures are when the TPP is fully implemented, in fifteen years. And even then, they're still likely to be outweighed by currency fluctuation.

Overall, MFAT is estimating $259.3 million of gains (in fifteen years). And remember, this is going to be their best, most inflated, strapped chicken PR estimate - the actual benefits are likely to be much less. As for the costs, MFAT is silent. What's the cost of a 20-year extended copyright term? What's the cost (in dead people) of Pharmac being forced to buy more expensive drugs to avoid lawsuits from US pharmaceutical companies? What's the cost of ISDS? Actually, we know that: its in the range of hundreds of millions of dollars. Which means one ISDS case a year wipes out any gains. And with hyperaggressive US companies increasingly using ISDS to standover governments and demand payoffs, that can't be ruled out.

Basicly, even on MFAT's most inflated estimates, the benefits of the TPP look low, and the costs look high. Its a shit deal - and National should never have agreed to it. But more than half of those benefits flow to National's tiny clique of farmer cronies, so they were keen. And the rest of us now get to pay for it.