Long live the Trans Pacific Parnership! or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership! Better and different. Well different in that they were able to pull out all of the clauses that the United States insisted they needed but everyone else hated. So much for President Trump declaring we got screwed…well we didn’t until he pulled us out of it.
I have had this post percolating in my head for months but never got around to doing the research and getting it down in black and white. And all of the nonsense I was thinking probably wouldn’t fit here tonight anyway. But Bernie was wrong. Hillary was wrong. Donald was wrong. Elizabeth was wrong. Robert was wrong. And another thing candidate Trump kept spouting on the campaign trail about the TPP being a big gift to China was wrong. The major advantage of the old TPP and the new TPP is China isn’t in it.
Well anyway, this news actually seems to have disappeared from the main news feeds. But the other eleven Pacific Rim nations that worked on the TPP for something like five years, signed a new version without the United States. And as I said above, without some of the ‘nonsense clauses’ (in their opinion) that we insisted upon. The market will be far smaller than it could have been, should have been, but it is still the third largest trade market in the world now.
What are we missing? Favorable trade with a lot of our closest allies. Favorable trade with some of our closest neighbors. And favorable trade with some of the future economic powerhouses around the Pacific who were looking to us for leadership and a world class market partner that wasn’t China. Earlier I mentioned Viet Nam as one of those potential partners.
And it certainly wouldn’t hurt us to have closer trade relationships with our other friends and neighbors. Japan and Australia were the main proponents who stepped up to get this done after the United States pulled out.
Would the TPP have cost the number of jobs that the president claimed? Probably not but it certainly would have cost some manufacturing jobs. But we would very likely have grown jobs in other sectors to make up for it, agriculture in particular.
One place that could lose jobs under TPP is China. It is very easy to see international conglomerates moving production from China to Viet Nam or Latin America if they have better trade arrangements. Or be physically closer to their new major markets. Or closer to raw materials. Want to reduce US trade deficits with China? Improve your trade with China’s neighbors and help them grow their economies while exporting American made goods under ideal circumstances.
And President Trump says we can better deals one on one in bilateral agreements. How much effort would that take? And how do you manage and audit 11 different deals? And how do you do multi-nation trade in a scenario like that? He just doesn’t have the mental acuity to go beyond bilateral deals…just sayin’.
And now that they are new trading partners in the TPP, do Mexico and Canada need NAFTA if our president gets too unrealistic in his demands? shrug!
Let me leave you with this from the article linked above:
“The signing is a significant moment for open markets, free trade and the rules-based international system,” Australian Trade Minister Steven Ciobo said in a statement heralding Thursday’s signing. “It sends an important message to the world that prosperity is achieved through breaking down trade barriers, not building them.”
The Trump administration “thinks they have more leverage than they do, and they are overplaying their hand,” Antonio Ortiz-Mena, a former Mexican trade negotiator, told Foreign Policy. “Mexico does have other options — they may not be ideal, but they’re options that weren’t available 25 years ago.”