Trans Pacific Partnership is Not Especially Important

Paul Krugman argues that the Trans Pacific Partnership is no big deal:

I’ve been getting a fair bit of correspondence wondering why I haven’t written about the negotiations for a Trans Pacific Partnership...

The answer is that I’ve been having a hard time figuring out why this deal is especially important. ...

The big talk about TPP isn’t that silly. But my starting point for things like this is that most conventional barriers to trade — tariffs, import quotas, and so on — are already quite low, so that it’s hard to get big effects out of lowering them still further. ...

An aside: one little-known aspect of the literature on trade liberalization is that to get any kind of large effect it’s necessary to drop the assumption that markets are highly competitive and efficient, and assume instead that there are large inefficiencies that will be reduced as a result of international competition. ...

As I read it, to make TPP something really important you have to (a) bring China inside, which isn’t on the table right now and (b) have major effects on foreign direct investment. ...

OK, I don’t want to be too dismissive. But so far, I haven’t seen anything to justify the hype, positive or negative.