Monthly Archives: January 2017

Ditching TPP

President Trump wasted no time in ditching the Trans-Pacific Partnership trade deal. Trump’s move brought rare praise from Bernie Sanders and labor leaders. Anger about the impact of trade deals on workers in rust belt states likely played a role in Trump’s electoral college victory.

The TPP was no doubt flawed. It should have been more inclusive (including China and India), less intrusive (focusing on lower trade barriers rather than forcing states to harmonize regulatory standards on matters such as intellectual property), more transparent (less secrecy and more public input during negotiations) and less tilted in favor of corporate interests (the infamous investor-state dispute mechanism that bypassed national courts). Still, the TPP agreement would have brought modest gains from trade for participating countries and did include labor and environmental provisions that improved upon past trade deals.

By acting unilaterally without consulting other parties to the negotiations, Trump has undercut America’s standing as a good-faith negotiating partner. Moreover, without any attempt to renegotiate the agreement or to envision alternatives, many of the countries that signed the TPP will instead gravitate to the Chinese-led Regional Comprehensive Economic Partnership, which offers a no-frills trade deal that excludes requirements for improving labor or environmental standards.

The TPP stood at the center of the Obama Administration’s Asian pivot as an answer to China’s rise and more assertive behavior in the region. Without the trade deal, America’s rebalancing efforts will rely more heavily upon military means – assuming, of course, that the US continues to seek a major role in Asia under President Trump. Missing an economic leg, America’s leadership in Asia will be imbalanced and its tools for managing China less effective. Beijing has already begun to position itself as a champion of globalization and a rallying point for those states that fear a protectionist tide (but see Elizabeth Economy’s counterpoint).

The Obama Administration was perhaps mistaken in their approach to a trade deal that would further economic integration across the Pacific Rim. A different type of agreement would have been less divisive within Asia and at home. But to negotiate and subsequently abandon the TPP agreement was certainly the worst outcome. The deal itself antagonized China and may have swung the presidential election to Trump while its’ final rejection has now undermined American leadership throughout Asia and beyond.

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