While I rarely use this column to go far afield from political economy, I’ll make an exception here and wade into the intersection of foreign and economic policy: the push to sell the Trans-Pacific Partnership to Congress on the basis of geopolitics and national security.
First, some background. It looks as if the Obama administration’s primary goal for its remaining few months in office is the passage of the TPP. But the presidential election has seriously altered the political landscape. Both candidates are hostile to the agreement, and President Obama would be doing Hillary Clinton no favors by pushing for the deal while she is strongly touting her opposition. So the administration’s plan is to try to pass the agreement in the few weeks after the election but before their exit, i.e., in the “lame duck” period.
As I read their arguments, they’ve largely punted on the economic case for the deal. I and many others have written that such a case was always shaky — these deals do little for overall growth or jobs (meaning a pox on both the TPP as “job-killer” and “job-savior” houses). They are instead a sweeping set of technical rules that determine whose interests are elevated in international trade, and those interests have long tilted toward investors and multinational corporations as opposed to workers. It would thus be discordant for Team Obama to try to sell the deal on the benefits of trade, which are substantial, in the midst of an election where the damage from global competition to significant groups of workers and their communities, which is also substantial, is so front and center.
Instead, the administration has shifted its emphasis to the geopolitical advantages of the deal, or more precisely, the geopolitical costs of a potential failure to ratify the 12-nation agreement. Their warnings come in two flavors, with the second more convincing than the first.
First, the administration argues that after years of difficult, complex, multilateral negotiations, if Congress fails to approve the TPP, it will be a sign to our allies that the U.S. can’t be trusted. Politically, this seems stunningly naive. Surely negotiators, both ours and theirs, knew that Congress would never rubber-stamp a deal like this. I’ve longed watched and even participated in such dealmaking and those involved are constantly recalibrating the odds of passage. Our negotiators would never have guaranteed passage; to the contrary, it is far more likely they were presenting a realistic assessment to their counterparts, who, of course, would have been doing their own homework on this as well.
So we should seriously discount this claim. If the TPP flames out, our partners will know what they already know — what anyone with access to this newspaper knows: American politics is in a highly fractious, dysfunctional state.
The second claim — that failure to pass the TPP will empower China and hurt the United States — is more serious.
Clyde Prestowitz, writing recently in the New York Times, presented a nuanced argument on this point: Yes, it is in America’s interests to try to reduce China’s global influence. But passing the TPP will be ineffectual in that regard. Regardless of the deal’s outcome, the U.S. will maintain its already sizable presence in East and Southeast Asia, while both we and China will continue trying to influence trade regimes.
That’s just globalization in action. Given the extent of existing and ever-increasing global ties between China and countries throughout Asia, the idea that we’re somehow going to wrest regional influence from China in their own backyard is not credible. For all their arguments to the contrary, both the U.S. government and our businesses recognize this, as they are increasingly ramping up their integration with China through direct investment by our multinational corporations and yes, bilateral trade deals (the U.S./China Bilateral Investment Treaty).
To call China a “threat” in this regard is misleading. What they are is an aggressive competitor for market share, and yes, they are gaining influence through their own bilateral trade agreements (many with TPP countries), foreign investment and financial ties with other nations. So we need a China strategy.
But that’s not at all what we’re talking about here. The TPP is a 12-nation agreement that consists of 6,000 pages of rules of origin for traded goods (which, not incidentally, are actually too kind to China for even my comfort), dispute settlement methods to protect investors (which a. damagingly put our skin in the game vs. that of investors themselves, and b. are now the source of financial speculation), extended patents for biologic drugs and intellectual property rights (not exactly “free trade”), and more. (And they still managed to leave out enforceable rules against currency manipulation!)
The deal’s proponents are down-weighting the costs of such a corporate-centric deal to workers and consumers here and abroad, including unenforced labor, environmental improvements and extended patents, and thus higher prices on critical medications. In this context, it’s hard to take their geopolitical calculus seriously. As Chas Freeman, a former international diplomat, recently put it: “Somehow — it’s not explained how — persuading Asians to adopt the intellectual property practices favored by Hollywood, BigPharma, and patent-trolling American lawyers will keep China at bay.”
What’s so frustrating about the administration’s sales pitch is its implication that we are somehow unable to write trade deals whose sale is not predicated on trading off workers’ and consumers’ well-being for geopolitical security. Is such a trade-off truly unavoidable?
I’m sure it’s not, and that we’re stuck here — we can have a deal that helps workers or a deal that protects our security, but not both — is another piece of evidence that our trade-negotiating regime is broken. We can and should write new rules of the road for globalization that place workers’ interests at the heart of any deal; these are the deals we should negotiate with any countries willing to do so.
Globalization won’t stop if the TPP goes down. Container ships won’t weigh anchors; trade volumes will not cease to grow. Neither will countries stop seeking geopolitical advantages, blocking potential adversaries or strengthening ties with allies. My hope is that they’ll just have to do so, for now, without a trade deal that would have made economic life harder for a group of workers and communities for whom economic life is hard enough already.
Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book “The Reconnection Agenda: Reuniting Growth and Prosperity.” He's a regular contributor to the Washington Post's PostEverything blog, where this article first appeared.