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Beware of the international monopoly

Last week, the Senate decided to give President Obama (after some urging on his part) enough additional power such that he would be able to complete a trade agreement with eleven other nations across the Pacific, including countries such as Japan and Australia. There are a lot of groups who are quite excited about this deal, mostly corporate entities, like Nike and many Silicon Valley corporations.

And they have reason to be. The Trans-Pacific Partnership (TPP) might make trade between participating nations much smoother and much more economically lucrative. If the deal goes through, the U.S. will have greater access to foreign markets without the imposition of so many tariffs, making it much easier to export goods to these specific markets. Able to get around these restrictions, companies will have a much easier time selling their goods to more markets.

Initially, many senators, both marginal liberals and conservatives, were opposed to approving this extra power, as they weren’t in favor of the trade agreement. Those to the far left argue that the partnership would be bad because it is effectively like “signing a blank check.” This is because no one currently knows what an investment in the partnership would look like concretely. Those to the far right argue that this act is giving the President (whom they already do not trust) too much power unnecessarily. Though thirteen senators changed their alignment in the second vote, many still aren’t supportive of moving forward with the deal.

These reasons aside and examining the situation from a perspective that isn’t so centered on major companies alone, this trade agreement is not a good idea. First of all, it is unlikely that the agreement will actually preserve U.S. jobs as promised, instead of having them go overseas. The TPP doesn’t actually look out for labor, but caters more to the interests of large, international corporations. This is because while it helps U.S. exports, it is also set up to protect foreign imports.

Additionally, this consolidation of power will really hurt the economic prospects of the countries excluded from the agreement, many of which already exist in compromised economic positions due to power dynamics that have developed with globalization. It makes sense from a power play standpoint, for example, that current participating countries (especially the U.S.) would want to exclude China, but it seems unfair that countries like Thailand and Cambodia, who also have an interest, have not as of yet been allowed into the agreement.

Further, those people who are concerned with maintaining a capitalist global economy ought to be seriously concerned with this agreement. Consolidation of power in this way shuts down the possibility of actual free competition between various entities, especially with the new relationship between the countries that are a part of the TPP and the countries that have been excluded for reasons geographic or otherwise. The countries that would participate in the TPP make up about forty percent of the world’s GDP, and this agreement among those countries ends up creating what is not quite a monopoly, but approaches that kind of power distribution.

The TPP also poses a great threat to the environment. Under the agreement, it will be difficult for governments to challenge corporations on their practices that affect the environment. With an agreement like TPP in place, it would easier to justify a lawsuit against anyone trying to impede free trade, including environmentalists who take issue with the policies of these companies. According to experts, eighty percent of fossil fuels need to stay in the ground in order to avoid environmental catastrophe — a goal that is difficult to imagine achieving now, but one that, with the TPP in place, might become impossible. This is especially terrifying considering the state of disbelief in which most of the nation rests with regard to the issue of climate change. It’s not a situation we want to mess around with.

This is a pretty simple international trade agreement; what impact does it have on us as Stanford students? Why should we care? There are lots of reasons. Anyone going into the corporate world, especially in Silicon Valley (of which there are many of us), could be impacted by this deal. In fact, with the privilege of graduating from Stanford, it is very likely that many people here will have the ability to influence how this policy is applied and carried out in actual trade practices. It’s important to understand this issue to improve the impacts that it has if it passes. When something of this nature comes up, something that is poised to wreak havoc on the environment and compound the disadvantages of countries that are already economically marginalized, we have a responsibility to anticipate and prevent the damage.

Contact Mina Shah at minashah ‘at’ stanford.edu. 

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