The TPP Isn't Just a Trade Deal
The Trans-Pacific Partnership, a multilateral trade deal involving the U.S. and many countries on the Pacific Rim, has become something of a bugaboo for those both on the left and the right. Republican nominee Donald Trump has denounced TPP, declaring it a sop to China, even though China isn't included in the agreement. Bernie Sanders is against it as well. President Barack Obama and Democratic vice presidential nominee Tim Kaine are for it, while Hillary Clinton, who helped negotiate the deal, has now turned against it. It’s not clear what Americans in general actually think about the treaty -- polls indicate lukewarm support, and Americans tend to view foreign trade as an opportunity rather than a threat. But it’s obvious that there are very vocal, committed minorities in both parties who are adamantly opposed to the deal, and both nominees appear to be giving them what they want.
QuickTake Free Trade Feud
That’s odd, because the TPP is pretty innocuous and incremental stuff. Since trade barriers in the countries that are parties to the treaty aren’t that high to begin with, there are only small gains to be made from dropping them. By the same token, it also means that few American jobs are in danger of being lost. Most importantly, the main TPP countries are all rich, developed nations, which means that the deal has essentially no chance of producing the kind of industrial hollowing-out in rich nations that happened after China joined the World Trade Organization in 2001.
The most problematic part of the deal concerns intellectual property, but I doubt that any significant fraction of the people opposed to TPP actually care about IP issues. Instead, I see the TPP as a scapegoat for people who are -- justifiably -- angry about the China trade explosion that happened a decade ago. Killing TPP wouldn’t bring back any of the jobs that the U.S. lost in the 2000s, but it would be a stinging public rebuke to internationalists like Clinton and Obama -- a message that Americans are fed up with technocratic meddling done in the name of economic efficiency.
That in and of itself isn't too worrying. Killing the TPP won’t do much economic harm. And with the countries showing little willingness to do big global trade deals, the free-trade agenda has mostly already ground to a halt all on its own. Also, I agree with the idea that technocrats have been too blasé about ignoring the distributional issues that arise from policies like free trade.
However, when we think about economic policy, it’s important to realize that there’s often more at stake than economic concerns or popular anger. The TPP isn’t just a trade pact -- in fact, its main purpose probably isn't economic, but geopolitical, and part of the effort to cement U.S. alliances in Asia against growing Chinese power.
Trade agreements aren’t just about opening foreign markets or providing cheap imports for domestic consumers. They’re also part of the complex, delicate dance of international diplomacy. Political scientist have long studied the link between trade deals and political alliances between nations. One example I know of is Paul Poast, a political science professor at the University of Chicago, who in a series of papers found that trade deals do in fact make military alliances more durable.
This fits with the conventional wisdom about the postwar era. The U.S. opened its markets to allies in Europe and East Asia -- Japan, Germany, France, Taiwan and others -- even though these allies didn’t always reciprocate. But the resulting trade linkages, we are often told, helped keep those countries in the Western camp during the Cold War.
A similar, if less tense, rivalry exists between the U.S. and China in East Asia today. That country’s meteoric rise is allowing it to press territorial claims against U.S. allies in the South China Sea and the East China Sea. But its economic might also makes it very hard for countries in the region not to cooperate with China. There is thus a tug-of-war for influence in the region, and trade agreements are part of that contest.
China is pushing its own version of the TPP, called the Regional Comprehensive Economic Partnership. That deal, which includes many Asian countries but excludes the U.S., would cement Chinese influence and help make the U.S. less economically important to countries in the region. The TPP is America’s natural counter to that effort.
Obama even talks about China and the TPP in very China-centric terms. In May, Obama warned:
Increasing trade in this area of the world…give us a leg up on our economic competitors, including one we hear a lot about on the campaign trail these days: China…China is negotiating a trade deal that would carve up some of the fastest-growing markets in the world at our expense.
Though he doesn’t explicitly mention the military angle, everyone in the international relations world knows that this is a big part of what’s going on.
So while it might be tempting to sacrifice the TPP to appease trade opponents on the right and left, the geopolitical and strategic dimensions of the deal shouldn’t be forgotten. As a trade accord, TPP isn't a game-changer. But it’s probably an important way to preserve the strength and unity of the U.S.’s democratic allies in Asia. Giving up on that effort would be a step toward isolationism.
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