Joseph Stiglitz on TPP: "Peru is unambiguously worse off, TPP is a motivator of greater inequality"

The Nobel prize winner fired against the recently sealed agreement. He warns that political leaders are rambling on with a mixture of “lies and half-truths”. He also states that drugs will be more expensive.

After six years of negotiation, the Trans Pacific Partnership (TPP) has been wrapped up and sealed. Some consider it to be good news, but for Nobel prize laureate Joseph Stiglitz this means greater inequality and only a few winners, where Peru highlights as a clear loser.

Many people in the last few days have argued that TPP is a very positive structural reform. What is your take on the subject?
There is a lot of concern in the USA that the new agreement TPP will be very bad for ordinary workers, the environment, health. Some people call the TPP a motivator for structural reforms, but I call it a motivator for greater inequality and undermining basic protections of individuals in our economy. That’s another example of what you might call a bad reform, which is a move in the wrong direction.

Still, political leaders from all involved countries are claiming that TPP is a big win for everyone…
It’s a mixture of lies and half-truths. We don’t know all the details yet, but it’s basically not a surprise that the leaders are trying to improve their political legacy. They’re politicians and they’re trying to sell. For a country like Peru, the big market is the USA and you already have an agreement. The standard that you want to look at for Peru is no better than the previous agreement. The big debate in the USA over the TPP was that, say in the case of drugs prices, many said let’s make sure that the new TPP at least meets the standard of Peruvian agreement, and the USA said no. If they had agreed to incorporate the provision of the Peruvian agreement, the debate would have been much easier.

In fact, Peru will be worse off. The whole debate has been about making access to drugs more difficult, rising drug prices. The story of drugs being more available is basically untrue. They could have just adopted the prevision in the Peruvian agreement, but they didn’t because drug companies didn’t like that. The democrats were in control when the FTA with Peru went through, but the republicans said they’d not be part of an agreement that does not help our drug companies. That always makes me angry because they could have kept the agreement we already had with peru. Peru is unambiguously worse off.

The negociations give off the feel that the USA has exerted domination on many subjects, but has not let loose in many controversial ones…
We do not know the details, but we know that the US is not eliminating its agricultural subsidies, so that was the main breaking point of the debate round. You have to ask why we do not have a multinational round. Why the development round break down? It was because the US refused to go along with free trade, that is to say refused to do anything about their cotton subsidies. We should know why the world has moved to this system, which is fractionating the world’s economy, rather than uniting it. It is because the refusal of the US to do anything about agricultural subsidies.

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