What's in the TPP

[Wilber]

Because I assumed that supply could scale up with demand. Am I wrong ?

No it can't because of the reasons already given. You are talking about a massive increase in demand without an increase in price. That's not how supply and demand works.

Because it costs less than $27 per pound to produce, so you can make money in both countries selling it.

Of course it does. He would be out of business if it didn't but why should he sell to you for less than someone else is willing to give him?

Now we're talking brass tacks. What's the scale-up time ? These agreements usually phase in, so I would imagine that it would work in tandem with that.

I don't know but whatever it takes, there has to be a financial incentive to do it. Lower prices isn't it.

Our prices aren't protected now, though. I'm having trouble seeing how a more open market will cause unprotected prices to rise.

Our prices are set by demand. Increase demand and prices will go up.

That's rhetorical, though. Economics says that prices should also fall in these situations.

Some will, others won't. Unless we can import the same goods for less than it costs us to produce them ourselves, they will go up because others will now have access to our goods that they didn't have before and what they are willing to pay will set our prices as well.

[Wilber]

Pharma companies, for example, make much less money in Canada selling the same drugs they sell elsewhere but they still do it.

Because our governments do most of the purchasing and in effect set prices.

[Michael Hardner]

Of course it does. He would be out of business if it didn't but why should he sell to you for less than someone else is willing to give him?

Because he can do both.

I don't know but whatever it takes, there has to be a financial incentive to do it. Lower prices isn't it.

No, the scale-up is for the increased business with increased margin.

Our prices are set by demand. Increase demand and prices will go up.

Maybe in the short term.

Unless we can import the same goods for less than it costs us to produce them ourselves, they will go up ...

Agreed.

Because our governments do most of the purchasing and in effect set prices.

But why do the Pharma companies bother ? It seems that this is the 'beef' model, and you're saying in that example that since prices can't rise they would just walk away and say 'why bother' ?

[Wilber]

Because he can do both.

But why should he unless competition forces him to?

No, the scale-up is for the increased business with increased margin.

Again, if his margin is increased by selling to someone else, why should he sell to you for less?

May

be in the short term.

No, the only way prices go down in a free market is if there is more supply than demand. Boom, bust cycles aren't good for producers or consumers, they want stability.

But why do the Pharma companies bother ? It seems that this is the 'beef' model, and you're saying in that example that since prices can't rise they would just walk away and say 'why bother' ?

Because the Pharma's can still make money but you are comparing government controlled market with a free market. If you think government is going to exert price control over beef by being the major consumer on behalf of Canadians, dream on.

[Michael Hardner]

But why should he unless competition forces him to?

Because he can still make money in Canada. He does today.

Again, if his margin is increased by selling to someone else, why should he sell to you for less?

There's margin, and then there's revenue.

No, the only way prices go down in a free market is if there is more supply than demand. Boom, bust cycles aren't good for producers or consumers, they want stability.

That's not 100% true. If costs go down, and there's competition for example then prices go down.

Because the Pharma's can still make money but you are comparing government controlled market with a free market. If you think government is going to exert price control over beef by being the major consumer on behalf of Canadians, dream on.

I don't think that. But the beef industry can also 'make money' as they are doing so today.

[Michael Hardner]

Jim Balsillie is calling it the "worst thing in policy that Canada's ever done".

This is making me doubt the TPP now. I don't understand, though, how a common set of rules around IP put one project at a disadvantage ?

[Wilber]

Because he can still make money in Canada. He does today.

Why should he if he can make more elsewhere? Why do you think Canadians are entitled to buy his goods for less than others are willing to pay?

There's margin, and then there's revenue.

That's not 100% true. If costs go down, and there's competition for example then prices go down.

Yes and margin is the maximum revenue from the least cost. You seem to think that agriculture is the same as manufacturing, it isn't. It might work for feed lots but it doesn't for farmers. A dairy farmer in this part of the world needs about one acre per cow in order to be self sufficient in feed. If he doesn't have that land, he has to buy feed (if it is available) and his costs go up. That applies whether he has 100 cows or 500.

I

I don't think that. But the beef industry can also 'make money' as they are doing so today.

Yes they could,but why should they if they can sell everything they can produce to someone else for more?

[kimmy]

It's not about access, it's about prices. If you want to pay more for things then you can do that.

I can already get on the internet and order just about any consumer goods I want straight from China and get them shipped free to my mailbox. I don't need a TPP to buy the cheapest consumer goods on the planet. So what's in it for me?

One of the things that some people have been touting about the TPP is lower prices for dairy products. Well, we didn't need an international free trade agreement to get lower dairy prices. If we wanted lower dairy prices, we could have lowered or eliminated tariffs and trade barriers on dairy products entering Canada. We could have done that any time. If lower dairy prices is the answer to "what's in it for me?" then why hasn't it been done a long time ago? Well, because for political reasons our government has protected our dairy sector from international competition. Since we're going to be giving our dairy producers billions of dollars of subsidies in coming years to mitigate their financial losses from the effects of greater imports, the cheaper dairy products aren't as big a bargain as they might appear at first.

If you're all about price, you can't be that excited that the TPP will be giving drug companies enhanced tools to "evergreen" their patents-- renew their patents in perpetuity by making minor changes. Giving pharmaceutical companies the ability to thwart generics from arriving will cost Canadian consumers billions, either directly (if you buy drugs yourself) or indirectly (because you pay into insurance policies that will be paying more for drugs.)

Is this really sounding all that great to you?

-k

[Michael Hardner]

You seem to think that agriculture is the same as manufacturing, it isn't. It might work for feed lots but it doesn't for farmers.

We already discussed transition above.

Yes they could,but why should they if they can sell everything they can produce to someone else for more?

Because there is money to be made in that market. We already agreed that they can grow their supply with time. Once they have the supply then there will still be business to be had in Canada, since there is today.

[Michael Hardner]

I don't need a TPP to buy the cheapest consumer goods on the planet. So what's in it for me?

The two areas identified are auto manufacturing and dairy. Certainly the prices for those goods can go down.

There's also employment in the industries that will increase exports, and the general economy that will benefit from that. Financial services is another example that I have heard about too.

One of the things that some people have been touting about the TPP is lower prices for dairy products. Well, we didn't need an international free trade agreement to get lower dairy prices. If we wanted lower dairy prices, we could have lowered or eliminated tariffs and trade barriers on dairy products entering Canada. We could have done that any time. If lower dairy prices is the answer to "what's in it for me?" then why hasn't it been done a long time ago? Well, because for political reasons our government has protected our dairy sector from international competition. Since we're going to be giving our dairy producers billions of dollars of subsidies in coming years to mitigate their financial losses from the effects of greater imports, the cheaper dairy products aren't as big a bargain as they might appear at first.

But we don't HAVE to lower tariffs unilaterally. We can use that as a bargaining chip to get tariffs lowered for our exports.

If you're all about price, you can't be that excited that the TPP will be giving drug companies enhanced tools to "evergreen" their patents-- renew their patents in perpetuity by making minor changes. Giving pharmaceutical companies the ability to thwart generics from arriving will cost Canadian consumers billions, either directly (if you buy drugs yourself) or indirectly (because you pay into insurance policies that will be paying more for drugs.)

Is this really sounding all that great to you?

Yes, although somebody like Balsillie has a much deeper perspective than you or me. I'm only speaking to the orthodoxy around trade deals. Even then, many people don't seem to get the basics behind trade deals and I blame the lack of productive dialogue in a public forum.

[GostHacked]

Because it doesn't for other things. Why do we pay more for phones but less for DVDs and more for ....

It's called 'perceived value pricing'.

No - they're expanding their herds for the HIGHER margins. They are already making margin on Canadian sales.

We pay more because we think that a smartphone is worth 500 dollars. When it's not. The perception is from the people selling you the junk.

[TimG]

This is making me doubt the TPP now. I don't understand, though, how a common set of rules around IP put one project at a disadvantage ?

Basillie's comments make no sense. Any tech company in Canada needs to sell in the US market so they already are subject to US patent law. The only change I could see is the scope of damages so a win in the US would entitle the litigator to claim for damages across all TPP countries instead of just the US.

[GostHacked]

One of the things that some people have been touting about the TPP is lower prices for dairy products. Well, we didn't need an international free trade agreement to get lower dairy prices. If we wanted lower dairy prices, we could have lowered or eliminated tariffs and trade barriers on dairy products entering Canada. We could have done that any time. If lower dairy prices is the answer to "what's in it for me?" then why hasn't it been done a long time ago? Well, because for political reasons our government has protected our dairy sector from international competition. Since we're going to be giving our dairy producers billions of dollars of subsidies in coming years to mitigate their financial losses from the effects of greater imports, the cheaper dairy products aren't as big a bargain as they might appear at first.

-k

Some good points here. What exactly is the benefit to allowing dairy imports that would require subsidies to our dairy farmers?

[Michael Hardner]

The perception is from the people selling you the junk.

Communication is a two-way street.

[GostHacked]

Communication is a two-way street.

That's quite naive of you. There may be communication both ways, but the communication does not involve the average citizen. Only government and corporations.

[TimG]

This is making me doubt the TPP now. I don't understand, though, how a common set of rules around IP put one project at a disadvantage ?

https://en.wikipedia.org/wiki/Trans-Pacific_Partnership_intellectual_property_provisions

I am generally pro-free trade but the IP provisions seem designed to hinder innovation to allow specious claims of IP rights to be upheld. I am specifically referring to this:

The TPP affirms for signatory parties that “patents shall be available for any new forms, uses, or methods of using a known product... even if such invention does not result in the enhancement of the known efficacy of that product

This provision is ridiculous and has nothing to do with encouraging innovation.

The requirement to hold people civilly liable for defeating IP protections is also too onerous for my taste because companies often place unreasonable restrictions on their property (e.g. geographical restrictions). My personal view is free trade should mean everyone can buy the same electronic goods at the same price and companies should not be allowed to create artificial barriers that prevent people from purchasing content that is available in other jurisdictions.

These provisions make it very hard for me to support this particular deal.

Edited November 10, 2015 by TimG

[Michael Hardner]

Some good points here. What exactly is the benefit to allowing dairy imports that would require subsidies to our dairy farmers?

Those are transitional.

[Michael Hardner]

That's quite naive of you. There may be communication both ways, but the communication does not involve the average citizen. Only government and corporations.

It's called "marketplace of ideas" and there is indeed communication both ways. Advertising needs to poll their audiences constantly to guage effectiveness, though this may not be evident to the average consumer.

Even elections are fought on a battleground of insider polling and focus groups.

[Michael Hardner]

The requirement to hold people civilly liable for defeating IP protections is also too onerous for my taste because companies often place unreasonable restrictions on their property (e.g. geographical restrictions). My personal view is free trade should mean everyone can buy the same electronic goods at the same price and companies should not be allowed to create artificial barriers that prevent people from purchasing content that is available in other jurisdictions.

These provisions make it very hard for me to support this particular deal.

Very specific. Thanks for the thoughts on this. But can you explain this provision a little more:

"The TPP affirms for signatory parties that “patents shall be available for any new forms, uses, or methods of using a known product... even if such invention does not result in the enhancement of the known efficacy of that product"

I think I need an example.

[GostHacked]

It's called "marketplace of ideas" and there is indeed communication both ways. Advertising needs to poll their audiences constantly to guage effectiveness, though this may not be evident to the average consumer.

Even elections are fought on a battleground of insider polling and focus groups.

That's just it, they want to sell you things you don't need. Market research and advertising have some of the slimiest people working for them.

If the communication was both ways, we'd know a lot more about the TPP than we do. The overall scope might be given to the population, but there is nothing we can really do to change the course and avoid things like the TPP. It's not in our best interest.

You are not going to save any money either, while at the same time putting our own businesses and farmers at risk. There is no saving if I have to dole out taxes that will be used as subsidies for farmers (but that already happens) and still pay a higher price for those other products and STILL pay a high price for our 'domestic' products. Hell, even 'domestic' products carry some amount of foreign made items.

[kimmy]

The two areas identified are auto manufacturing and dairy. Certainly the prices for those goods can go down.

Well, we could have had lower auto prices any time we wanted as well. We, collectively, chose not to.

There's also employment in the industries that will increase exports, and the general economy that will benefit from that. Financial services is another example that I have heard about too.

So great news if you're a car-driving cheese-loving banker, but bad news if you're a lactose-intolerant bicycle commuter who needs prescription drugs and works at an autoparts factory?

Does giving the RBC an enhanced opportunity to open a branch office in Malaysia something that the government can come sell to me, the average Canadian on the street, as reason to be excited about the TPP? Does it help anybody who isn't a shareholder at RBC?

But we don't HAVE to lower tariffs unilaterally. We can use that as a bargaining chip to get tariffs lowered for our exports.

Sure. We could have lowered tariffs on dairy and autoparts and any number of other things and we didn't, because rightly or wrongly it was believed that protecting those industries was worth the higher cost to consumers.

So now we've given up those tariffs and put those industries at risk in exchange for... higher prices for prescription drugs, financial protections for corporations that invest in foreign countries, expanded ability of technology corporations to sue their competitors...

Is this really that great of a bargain? I already spend a darn sight more on prescription drugs than I do on dairy products each month.

Yes, although somebody like Balsillie has a much deeper perspective than you or me. I'm only speaking to the orthodoxy around trade deals. Even then, many people don't seem to get the basics behind trade deals and I blame the lack of productive dialogue in a public forum.

So perhaps instead of talking about the the orthodoxy of free trade and simplistic arguments like "tariffs bad, cheap milk good!" we should consider that very little of this "partnership" is actually about trade and a great deal of it is about protecting the financial interests of corporations.

-k

[GostHacked]

Those are transitional.

What do you mean by transitional?

[TimG]

I think I need an example.

Drug companies create chemically similar compounds and file a new patent on the new compound and then work to create demand for the "new and improved" drug even when there is no real improvement. I am a believer that patent should protect innovation - not reward companies for gaming the system.

[GostHacked]

Drug companies create chemically similar compounds and file a new patent on the new compound and then work to create demand for the "new and improved" drug even when there is no real improvement. I am a believer that patent should protect innovation - not reward companies for gaming the system.

If that upsets you, take a look at GMO foods.

[TimG]

If that upsets you, take a look at GMO foods.

GMO foods are usually innovative.