The TPP: more than a trade agreement

US Secretary of Defence Ashton Carter has called the Trans-Pacific Partnership (TPP) the equivalent of a ‘second aircraft carrier’. Secretary of State John Kerry has warned that ‘We cannot withdraw from TPP and still be viewed as a central player in the Pacific Rim and an undisputed force for peace and prosperity across the globe’. The remarks of these Obama Administration officials were seconded by Republican Senator John McCain, who said: ‘If TPP fails, American leadership in the Asia Pacific may very well fail with it’.

These statements underscore the reality that a nation’s trade policy intersects its diplomatic and security strategies and its broad economic goals. With the exception of multilateral negotiations in the WTO, which deal exclusively with trade issues, bilateral, sub-regional, and regional trade agreements are influenced and guided by competing national priorities. A review of the history of US decision-making from the 1980s, when it first embarked on bilateral and regional trade projects, demonstrates this geopolitical overlay to trade policy.

In 1991 US Secretary of State James Baker, in response to a Japanese plan to create an exclusive Asian trade architecture, famously proclaimed that the United States would oppose any ‘plan that drew a line down the middle of the Pacific’ between the United States and Asian nations. Baker stated later that while there was no immediate challenge to US hegemony, he wanted to put down a marker tying US economic interests closely to its political and security goals.

Similarly, in defending the North American Free Trade Agreement and a proposed regional trade pact with Latin America, the Clinton administration closely linked trade initiatives with the political goal of advancing democratic norms and institutions in Central and South America.

Under former president George Bush the United States negotiated trade agreements with 17 nations and the administration publicly set forth the criteria for US trading partners. In a number of speeches and congressional hearings, US Trade Representative Robert Zoellick bluntly affirmed that in choosing free trade agreement partners the United States would expect ‘cooperation — or better — on foreign and security policy’. The United States placed Australia at the front of the line in return for supporting the Iraq invasion.

Though President Barack Obama publicly eschewed many of the foreign policy tenets of the Bush administration, he ultimately accepted the inextricable entwining of US international trade policy with its diplomatic and security policy. His decision to back TPP negotiations in late 2009 was rooted both in the sage advice of his economic advisers and in urgent pleas by his State and Defence departments for a US response to the deteriorating situation in Asia. This situation included China’s reversal of its ‘peaceful rise’ mantra and the increasingly erratic and dangerous provocations by North Korea under Kim Jong-un.

With great fanfare, Obama and Secretary of State Hillary Clinton announced the US ‘pivot’ (later ‘rebalance’) to Asia. In a number of speeches and statements in Asian fora, the president repeatedly reaffirmed that ‘The United States is a Pacific power and we are here to stay’.

From the outset, East Asian nations and observers around the world identified the TPP as the central symbol of current and future US leadership in the region. TPP negotiations are now concluded and the intricate and voluminous terms of the agreement are in the public arena. While not perfect, the results are generally quite positive — certainly from the perspective of US priorities and goals. Yet anti-globalist and anti-trade voices in the US have mounted a sustained and vitriolic campaign against the TPP. Its fate in Congress is highly uncertain, and possibly dire.

Meanwhile, East Asia’s diplomatic and security environment is becoming increasingly fraught. North Korea seems to be moving inexorably closer to greater nuclear arms power and acquiring the means to deliver its weapons. At the same time, Chinese obduracy and belligerency in the South and East China Seas is increasing under President Xi Jinping. The Chinese are at the forefront of constructing an economic architecture that excludes the United States. In trade this includes the Regional Comprehensive Economic Partnership and, in development, the Asian Infrastructure Investment Bank.

In the long-term there can be no doubt that the economic consequences of failing to secure the benefits of regional integration in the world’s fastest growing region will be costly for the United States and its 11 TPP partners. But even more costly for the United States will be failing to pass the TPP and fulfill Obama’s vow that ‘In the Asia Pacific in the 21st century, the United States of America is all in’. As Singaporean Prime Minister Lee Hsien Loong has warned, ‘If you don’t finish TPP, you are giving the game away [to China]’.

One can only hope that the observation allegedly made by Winston Churchill that, ‘You can always count on the Americans to do the right thing, after they have exhausted all other possibilities’, comes true.

Claude Barfield is a Resident Scholar at the American Enterprise Institute.