We have said time and time again that globalization (as in free markets) is good. Anything that fosters barrier-free trade in goods and services is good. Yet, politicians manage to screw this up time and time again. Worse. They do it on purpose and in such a manner that it seems that they are fostering free trade when in reality they are fostering trade agreements. Big difference. Gigantic difference. Mega-Super-Giga difference.
Glad you asked grasshopper.
Look, this is not complicated. If you want to trade freely, all you have to do is to…well… trade freely. We know. We know. This is quite an advanced concept in a world where the "normal" and the "standard" are trade barriers. But stay with us.
Globalization means just that, that trade becomes global. It simply means that there are no more regions in the world where idiots and con artists who claim to "represent" voters get to decide "what is best" for them. You know. The usual scammers.
Yet, what do we get in this upside down era? We get "regulated" free markets. Huh? What the hell is a "regulated" free market? By definition a free market is… well… free! If somebody claiming authority "regulates" a free market this person or persons (as they say in criminal courts) are simply placing restrictions on what people may or may not trade. That, by definition, is most definitively not a free market!
Therefore, if there is a "trade agreement" that affects all the peoples in one or several regions, this simply means that the conditions of the "trade agreement" have been imposed on all those people…whether they want it or not.
In other words, restrictions have been imposed on trade and, as we have seen above, once we impose restriction on trade, markets are no longer free.
Thus, the difference between globalization and trade agreements is the same as between free markets and manipulated markets. We are all for the former and against the latter.
The reasons why restrictions exist in "trade agreements" is not to create a plain playing field (free markets do so automatically) but to provide unfair advantage to specific economic sectors, typically big corporations.
Now remember, corporations are in the business of making money. If they can ensure artificial monopolies through "trade agreements", you can bet your underwear (or panty as the case may be) that they will do so. It is not in the nature of corporations to be "kind" and "helpful". What makes the ultimate greed of corporations to provide us with higher standards of living is precisely free markets. Without free markets we are yummy, yummy snacks for corporations. We have explained this much in several articles (if you have the stamina, you could review this one, for example: Companies – Our Cuddly Friends).
And why is this important? Glad you are still asking questions. To the answer!
A PRACTICAL EXAMPLE
The incompetents in "charge" of Mexico have decided to sign the TPP (Trans-Pacific-Partnership), which is a "trade agreement" (yeah… the bad stuff). As a consequence of this "enlightened" step the newspaper El Universal - Mexico published the article "Pharmaceutical [companies] may go broke due to TPP" (or its Spanish version, for that matter).
This is an interesting article because it actually gets is right (most of the time) but then they royally screw-up the necessary "Corrective And Preventive Actions" (or CAPA as they say in the Pharma environment). Let's take a look.
The Mexican Association of Generics (AMEGI) has complained that the pressure of multinational phara companies has no counterbalance due to the TPP… and they absolutely are right. A few of the "good" effects of this "wonderful" "trade agreement":
- It forces Mexican pharma company to seek new, foreign markets and niches for which they are not prepared.
- Many smaller labs will either merge, be sold or go bankrupt.
- Multinational corps will demand damages from the government for "delays" in regulatory approvals… damages which will be counted in billions of USD and will de-facto extend patents beyond 20 years.
- It has become increasingly difficult to manufacture generics because multinationals employ multiple patent strategies on each medication, so that sometimes they are 10 or 15 of them on a single drug.
- In Mexico, the generics industry manufactures 80% of the medications sold in the internal market and the brand name 20%. However, when it comes to money, brand name corporations make 80% of the profit and generics only 20%. What this means is that with the irrevocable annihilation of Mexican generics, that 80% of consumer who rely on them to produce inexpensive medications are screwed!
Now allow us to ask you this. Do you believe that any of these effects are good for Mexican consumers? Of course not! But if this is the case, why sign the TPP? Because of political pressure. The TPP is exceedingly good for keeping politicians employed while they screw over their so-called "represented" people. How is this possible? Simple. The very same corporations that benefit from the imposition of the TPP are the very same corporations that provide large political donations to politicians. Always remember, blackmail to be efficient must be basic and crude with no way out, and what can be more basic and crude than the following threat:
Either sign the TPP or you won't see a dime. Worse. We will found your political opponent who will sign the TPP.
And so the TPP, a "trade agreement" goes on.
And why is the TPP so damaging?
Because as with any other "trade agreement" it imposes artificial monopolies. In the case of pharma, the artificial monopoly appears as extended patents and payments for "damages".
Of course, the politically correct "solution" (i.e. the one that will achieve nothing) is the one that the AMEGI is gunning for; this is, so-called "legal" protection or counterbalance. Good luck with that. This gets to show how thoroughly twisted, brainwashed and mind bent people are. Think!
The AMEGI is complaining to those who signed the TPP that they have lost some of the freedom they still had left in the free markets. Does this make any sense? At all? Don't they know that those who signed the TPP already performed their political calculations and realized that opposing the TPP is political suicide? Don't they realize that for politicians staying in their cushy political positions is everything? Don't they know that the deepest pocket always wins? How can they possibly be so, so stupid?
In a word?
As we mentioned before, when the game is rigged the only winning game is not to play. In this case as the political game is rigged, the only winning game is to get rid of all politicians. But will this solve this problem? Sure.
Once politicians are gone so are "trade agremments" and "patents" and "artificial monopolies" and "damages". What this means is that in Mexico any company would be able to manufacture anything without delays from regulations, without the fear of being sued into extinction for patent breach or without having to gamble with the very real possibility of not receiving a medication "licence" from the government.
In a purely free market generics and brand names alike must all compete for the lowest price at the highest quality with the best efficiency. There is no escape. The consumer is king, jury, judge and executioner. Provide "good stuff" at a price "we" can afford or go broke. Simple. Brutal. Efficient… but in our favour!
Every time you see a "trade agreement" you would be wise to think "trade restriction". And yet, not everything is black and white. Sometimes "trade agreements" are actually good in the sense that they open barriers. If a country is isolated, then it is better to have a "trade agreement" than to have nothing. Sure. The medicine is harsh, but eventually it will work in their favour as people begin to demand more and more freedom to trade as they see fit. In ultimate analysis the question is not if a "trade agreement" is evil, but whether or not will it increase true free trade. If it does, then it is good. If it doesn't (which is what most of them do), then it is evil (or at least it will conspire to lower your standards of living).
And so, next time you look at a "trade agreement", be suspicious. Be very suspicious. Because chances are, they are designed to screw you over. Now be a good boy (or girl) and go say thank you to your representative who is working so, but so hard, not to loose their job. After all, it's all "for the greater good" (theirs…not yours).
Note: please see the Glossary if you are unfamiliar with certain words.