Wednesday, March 25, 2015

Why the geopolitical argument for the TPP is really stupid

President Obama can't argue the Trans-Pacific Partnership (TPP) would create jobs (no one believes him), so he's arguing the deal would improve the U.S. geopolitical position with China.

People aren't buying that, either.

Don Lee reported earlier this month in the Los Angeles Times,
In recent weeks, one Obama official after another has hammered away at the same line of argument: It’s crucial that Congress supports the TPP — including passing a related trade-promotion bill that would strengthen the president’s negotiating hand — because the alternative is that China, not the U.S., will write the rules of global trade...
Opponents of the TPP say that pulling out the China card at this stage represents an act of desperation in the face of persistent congressional uneasiness about Obama's trade agenda. 
The article was titled, "China is Obama's trump card in push for Pacific Rim trade pact."

Some trump card.

Most people grasp that weakening the U.S. manufacturing base by sending more U.S. jobs overseas (which is what happens with these trade deals) will not make the United States stronger. Especially when we're letting China equip our military and build crucial components.

Alan Beattie, writing in the Financial Times, makes another important point: trade deals don't have much strategic impact:
...quickly scanning the two main bilateral trade deals the US has signed over the past decade in the region, Australia and South Korea, it is hard to see much strategic impact. In both nations, belief in the US’s economic power and future superpower status have either stagnated or declined over the past decade. Other geopolitical issues, such as America’s ability to serve as a military counterweight to Chinese or North Korean belligerence, are surely far more important. 
Beattie also notes U.S. trade partners aren't always happy with the deals we make with them.
And rather than blithely assuming that a consenting trade partner is a happy trade partner, the US might also look at whether the content of TPP is conducive to future good relations... 
It’s not clear that a country’s affection for the US will increase after being required to rewrite its patent and copyright law every few years on a model dictated by, respectively, the Pharmaceutical Research and Manufacturers of America and the Recording Industry Association of America. The US itself does not offer much liberalisation. It is highly unlikely to substantially dismantle its agricultural subsidy and protection regime to allow Australian and New Zealand farmers abundant access to its dairy market or stop its rice subsidies disadvantaging Vietnamese rice exports in world markets. America’s trading partners are thus on a permanent treadmill of enforced policy change in order to keep their trade access to the US... 
Meanwhile, he argues, China is doing trade better than we are:
Chinese trade deals tend to ask less liberalisation from (and offer less liberalisation to) their negotiating partners. Instead, Beijing presses on with a highly attractive proposition to regional emerging markets: cheap money from the Asian Infrastructure Investment Bank... 
Beattie concludes: "Washington should not delude itself that trade deals which inflict political pain on the US’s negotiating partners will necessarily function as durable and positive elements of a wider diplomatic relationship."