America Turns Its Back on TPP

Although free trade was once the natural response by states to the globalisation of economies, many are now stepping backwards and re-weighing its benefits. The United States has taken a leading role in the creation of free trade agreements (FTAs) globally since the beginning of the 21st century and is now on the verge of entering into one of the largest multilateral trade agreements in 20 years, but there is new strength in domestic opposition to the deal. American middle class workers and big banks alike have all found points of contention with the deal than may spur its downfall. However, if the deal were to be thwarted by the US government, it would be a large failure of American foreign policy in the Asian Pacific region.

Image courtesy of Backbone Campaign © 2016, some rights reserved.
Image courtesy of Backbone Campaign © 2016, some rights reserved.

The Trans Pacific Partnership (TPP) is a free trade agreement between 12 countries bordering the Pacific Ocean from different parts of Southeast Asia, both South and North America, and Australia. If put into effect, it would establish the world’s largest free trade zone between 12 states that cumulatively account for about 26% of world trade and 40% of the world GDP. It will affect 18,000 tariffs, the majority being removed completely, and lay out a new set of standards and regulations for labour and environmental protection. These standards show that the scope of this deal has manoeuvred itself into a point of jurisdiction over many domestic issues, reflecting a globalised set of values and principles.

The TPP is seen as the catalyst in the shift towards global free trade, as many believe the TTIP (Transatlantic Trade and Investment Partnership) would logically be the next to follow. Though the negotiations for the TPP have been underway for about 7 years (the majority of Barack Obama’s presidential term) and a vote last fall finalised the agreement, there surge of disapproval from both major political parties in the United States may be enough to prevent its ratification.

The rise in bipartisan consensus within the United States against the TPP is seen in both of the presidential candidates and their supporters. Donald Trump has made his reasoning for being anti-TPP clear; his commitment to putting ‘America first’ makes protectionist thinking a logical outcome. Hillary Clinton on the other hand has a history of not only supporting the trade deal, but stated that the agreement ‘sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field’, during her time as Secretary of State in 2012. Yet now, she opposes the TPP for its loopholes and lack of ability to stop currency manipulation by countries involved.

The United States’ initiative in creating and solidifying this trade agreement is twofold; determined by both economic and international strategy. The content of the TPP and its implications for American workers is undeniably controversial. These problems are valid and should be addressed. However, the implications for US foreign policy of a failed TPP are disadvantageous. As we have seen, China poses a great threat to the US’s immense hold over power dispersal and global influence.

The United States has been able to set standards in the agreement that highly correspond with their own values and norms. In a sense, this means that the countries involved are going to have to align their behaviour more closely with American values. Many speculate that China has not joined the agreement yet in attempt to steer clear of these standards, which they would not want to uphold. The US is, with complete admission, trying to write the rules of global trade exactly how they want to before any other country does. The TPP is the first step in ensuring American leadership in the expansion of global trade with their values intact. The White house has been very clear about the aim of the TPP, stated that it allows America to ‘rewrite the rules of trade to benefit America’s middle class. Because if we don’t, competitors who don’t share our values, like China, will step in to fill that void’.

Additionally, the Trans Pacific Partnership is a representation of the US commitment to many Southeast Asian nations, including Singapore, Malaysia, and Taiwan. If it pulls out now, this could be seen as a lack of interest in the region, creating both a rift in relations and an avenue for China to step in. Many other trade agreements have been emerging in the Southeast Asian region. China has spearheaded the launch of a two-year study into the Free Trade Agreement of the Asian Pacific, encompassing many of the countries involved in TPP. If TPP fails, America made lose its window of opportunity to influence the values and standards of developing economies across the region.

If it is not passed, it is more than likely that that will be the end to the TPP. The chances of further negotiations after a seven-year process is highly unlikely. Yet, it is undeniable that new bilateral or multilateral trade negotiations will have to re-emerge, only potentially excluding American influence. Though many will choose to argue that the TPP’s disadvantages may outweigh the risk America faces in taking steps back from the Pacific region, the magnitude of the foreign policy implications at risk is large. Turning away from this deal will put American international influence and dominance over global trade at risk. As China continues to grow as a great power, the US should value this deal highly in order to maintain its status within the international system.

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