By John Ubaldi
Contributor, In Homeland Security
In keeping with his campaign promise, Donald Trump released a video in which he stated that during his first 100 days in office, he would pull the U.S. out of the controversial Trans-Pacific Partnership (TPP) trade deal.
This announcement was widely anticipated ever since Trump won the election. It’s a position on which he vigorously campaigned. But it also sent shock waves to U.S. allies and trading partners throughout the Pacific Rim, with China as the potential beneficiary.
TPP’s Background
The TPP was the signature issue of President Obama’s “pivot” toward Asia. The TPP was signed by 12 countries that account for more than 40% of the world’s economy. The TPP nations besides the United States are Japan, Malaysia, Brunei, Singapore, Vietnam, Australia, New Zealand, Canada, Mexico, Peru and Chile.
The agreement was signed in 2015. However, the individual member countries have not officially ratified the TPP.
Throughout the TPP negotiations, President Obama made it clear to the participating nations that China was excluded from this partnership. The exclusion would prevent Beijing from writing the rules of the road regarding international trade in the 21st century.
Obama staked his foreign policy legacy on the passage of this massive and controversial trade agreement to bolster the United States’ strength in the Asia-Pacific arena. It would also signal Washington’s commitment to the region and further promote American values.
TPP Criticized During Recent Presidential Campaign
During the 2016 presidential campaign, Republican Donald Trump and Democrats Bernie Sanders and Hillary Clinton all attacked TPP.
Clinton found herself in a precarious situation. In a November 2012 speech to Techport Australia, while she was Secretary of State, Clinton said, “This TPP 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. And when negotiated, this agreement will cover 40 percent of the world’s total trade and build in strong protections for workers and the environment.”
While Clinton was on the campaign trial, she was forced to disavow her support for TPP because her challenger for the Democratic presidential nomination, Vermont Senator Bernie Sanders, was a fervent opponent of TPP.
Clinton had to defend her comments regarding TPP. She also had to defend the actions of her husband, former President Bill Clinton, who signed the North American Free Trade Agreement (NAFTA) in 1994 over the objection of many people in his own party.
Today, the Democratic Party has taken a far more progressive turn toward the left. The Democrats oppose free trade because of its perceived impact on American workers, especially union workers who make up a large portion of the base of the Democratic Party.
In August, Singapore’s Prime Minister Lee Hsien Loong issued a warning regarding TPP when he visited the United States. He noted that America’s “reputation is on the line” throughout the Asia-Pacific area.
Each TPP nation, according to Lee, “has overcome some domestic political objections, some sensitivity, some political cost to come to the table and make this [TPP] deal.”
Reversing the pro-TPP U.S. position allows China to fill the power vacuum.
China Reaches Out to Neighboring Nations for Trade Deals
China’s President Xi Jinping has reached out to other leaders in the Asia-Pacific region. China has proposed its own trade deals such as the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia Pacific (FTAAP).
On Monday, the Chinese president signed a trade deal with Peru to boost its own exports in the face of protectionist sentiments from the United States and the West.
The BBC reported that Trump’s TPP announcement goes to the heart of the enormous uncertainty about U.S. intentions under a Trump presidency. Does the U.S. still intend to champion a fair and inclusive rules-based system? Or does Trump’s “America first” mean replacing the commitment to co-operative internationalism with a narrower interpretation of U.S. national interest, one based on competition?
Trump’s announcement leaves other areas open for concern such as security. Can our Asia-Pacific allies effectively rely on the U.S. as a bulwark against a rising China? The statements made by Trump during the campaign leave many U.S. citizens uneasy at this prospect. Just the need to ask this question makes China a big winner.
In his announcement, Trump did not call China a currency manipulator. He said nothing about placing tariffs on Chinese goods, as he did during the campaign.
The debate in Washington and on the campaign trail has been over trade and the trade imbalance. But as Derek Scissors of the conservative American Enterprise Institute wrote in an April 2016 white paper Fixing US-China Trade and Investment, “Diagnosing the wrong ills will lead to the wrong cures. The U.S. should not try to balance the trade deficit or sanction China for having the wrong currency policy. Instead, the U.S. should sanction Chinese firms that benefit from stolen intellectual property, postpone a bilateral investment treaty and refuse to grant market economy status until China becomes a much better partner.”
One has to be careful with regard to international trade. Trying to cure the wrong illness and appeasing a segment of the U.S. population that relies on manufacturing for employment could have serious negative consequences on the U.S. economy and on those people whose jobs Trump is trying to save.