By Hirak Mukhopadhyay
The TPP trade deal has started an interesting uproar in Washington. The Obama Administration has found support to “fast-track” it (pass the TPA) from Ted Cruz, Dianne Feinstein, Mitch McConnell, and Claire McCaskill, with opposition from Bernie Sanders, Elizabeth Warren, Rand Paul, Harry Reid, and Joe Manchin. Interesting groups to say the least1, 2. For the sake of simplicity, I will discuss the TPP (which is linked with the TPA), not the TTIP and TAA. I’m very aware that Democrats have turned on President Obama due to many negatives that this deal would have both nationally and internationally. But I have a very different perspective on this deal, and I do not think its overblown faults should block such a great opportunity. Here are my reasons for firmly standing by the TPP.
With Vietnam being a country in the TPP agreement, it puts their economy in a position to make serious economic reforms, which would give Vietnam a market economy. If the TPP gets rid of trade barriers such as non-market economy (NME) designation, the United States and Vietnam can successfully integrate their markets, which increases competition3. Economic competition creates more economic growth [FN1].
Japanese Prime Minister Shinzo Abe has called the TPP “awesome”. He believes that the TPP is not only good for economic benefit but also for their security in world relevance. The TPP is also coming at a great time for Japan: it is going through sweeping agricultural reforms, establishing female empowerment, regulations in energy, medicine, and finance, with Japanese corporations increasing share dividends, fluctuating the Nikkei index to above 20,000. Japan is at the brink of economic boom4.
A country often ignored in East Asia, Malaysia actually has a waterway connecting the Indian Ocean to the Pacific Ocean known as the Strait of Malacca. Think of it as the “Panama Canal of East Asia”. 85% of China’s imported oil went through this strait, and 60% of China’s oil supply is foreign. However, 60% of international trade passes the South China Sea. Malaysia is worried that China is bullying others in the South China Sea, taking waters claimed by themselves, Brunei, Vietnam, Indonesia, and Taiwan [FN2]. With strong U.S.-Malaysia ties however, the Strait of Malacca can be used instead of the SCS, nullifying China’s nautical control. The TPP loses much of its value without the Malaysia aspect; it is vital that this agreement is a success so that Malaysia can provide an alternative to the SCS and sticks it to China. Malaysia becomes economically/politically powerful through the TPP.
This potential move along with the rest of the TPP is really about countering China’s influence and economic monopoly in the region. China has shown concern for the pact and feels threatened because their rivals can gain production jobs handed off to them by the U.S., another rival of China. Surprisingly, as the deal looks more and more probable, China has expressed possible interest in joining the TPP for economic growth as well, although they are already engaged in the Silk Road Initiative in Central Asia. While America is trying to stifle China, they are open to China possibly joining the TPP eventually, along with South Korea 5, 6. That way it becomes an even more powerful trade pact with even more players and more economic growth. We will see later on whether or not China ends up joining.
Brunei, New Zealand, Canada, Mexico, Chile and Peru are also part of the TPP free trade agreement. They can also economically benefit or gain political importance by being a part of the pact6, 7.
Nike will create up to 10,000 new jobs in the United States, under the condition that the TPP is approved. President Obama even went to Nike headquarters to show his commitment to the deal while rejecting criticism from Democrats8.
Agricultural Output will increase due to access to more markets, with more goods being sold. There will now be increases of production in cereals (1%), dairy products (0.5%), and meat (0.4%) 9.
The United States maintainsgood international relations when it goes ahead and tries to help the economies of other nations. When the U.S. makes it clear they will make an effort, it makes the United States more popular abroad and diplomacy brings in mutual benefits. Being on good terms with nations across the globe is always a good thing, economically, militarily, and diplomatically. The more friends the merrier. With the TPP in place, it gives reason to respect the United States, and to do more business with them in the future.
America’s Grip of Power:
The TPP deal solidifies America’s role as a powerful voice in world affairs. It shows that when it comes to international trade, the U.S. has control over what goes on. America is the boss. Along with the EU, America is the nation that tells everyone else what to do10. It is very important that America continues that role, especially with China and Korea potentially jumping in.
Besides showing good will to other nations, it is important America also learns how to form international coalitions with a variety of different nations and be a good multilateralist. It is imperative that the U.S. can get along and work together on global issues that go past borders and hopefully find solutions that help all nations involved. If the TPP does not make it, it is not like China will stop playing diplomat. They already have their own place at the UN, their own development bank, involvement in the Asian Development Bank, and is part of the Shanghai Cooperation Organization (SCO) that just met in July11 [FN3]. America must also have someone to lean on, and vice versa.
An under-reported asset of the TPP is to tighten the existence of NAFTA. With Mexico and Canada both in the TPP, the TPP is really making the NAFTA relationship stronger by throwing in more benefits to those two countries. Making NAFTA stronger is staying consistent with the commitment President Clinton made when he signed NAFTA into law, instead of pulling out of that deal6. Being flaky is not going to build credibility. It is very impressive when Presidents keep agreements going and follow precedents of past presidents. It shows that President Clinton’s decisions are taken into account, and his efforts do not go in vain in the long haul. The U.S. and their commitment to Canada and Mexico is active for now.
For the first time in 6 years, President Obama has finally been able to reach across the aisle and get solid bipartisan support on a bill. Even though many Democrats oppose the measure, some have supported the President, and without the few Democrats, this wouldn’t have passed. It is also great news to see that people who loath the President like Ted Cruz and Mitch McConnell were able to put their differences aside with Obama and vote for this1. Washington has been extremely idle and unproductive lately, I’m glad that finally something has been done. It feels nice. See, Republicans really can agree with the Kenyan Socialist Muslim on an issue! Especially when his plan is free market capitalism at its finest. It shows that maybe, just maybe, Congress can still get along to do bipartisan efforts like these. Votes are votes at the end of the day, no matter which aisle they come from.
Sounds great! But what about……….
An excellent concern to have. As I say often say, climate change and the environment has to be one of our main concerns if not the most important one, no matter what uninformed liberals or conservatives think. There is a very convincing, comprehensive report mainly authored by the Sierra Club saying that the TPP is making countries de-regulate or loosen themselves from international environmental laws (even when these countries are already environmentally destructive and overfishing with these laws already intact)12. That is a scary thought, and let us assume it is true. So what does the Sierra Club propose, that we stop this trade deal because of the environment? I would agree to that, if China would follow suit and pull out of the SCO, their stake in the AIIB, or give up its quest for world domination. Whether we go through with the TPP or not, China will continue to do all of those things. America staying home because of environmental fears will put us behind, while China keeps advancing. This is a dangerous consequence. The TPP gives China competition.
I am a staunch supporter of human rights, often more than anyone else. And I sadly admit, Malaysia is involved in human trafficking/slavery. But there are times where there is nothing that can be done to stop abuse. There are people who will like that statement, like those who are blissfully ignorant enough to think developed nations like America, Australia, France, and Great Britain would always put economic advancement over human rights advancement. But they are incorrect beyond measure. In an earlier paper, I actually defended President Clinton’s trade opening with China despite human rights violations because there was the aspect of diplomatic relations that had to be considered [FN4]. Just like then, there are exigent political (not economic) circumstances in the TPP trade agreement which cannot be ignored or buried due to human rights. China is coming. If China had no power over the South China Sea, I would reject this deal and beg President Obama not to downplay Malaysia’s human rights status like many other Democrats and Republicans already have in recent weeks13. There is a lot of work to be done in Malaysia. We need broader and stricter human rights laws that are actually enforced. But I also have a theory that economic development that derives from policies like the TPP may help lessen the severity of human rights violations [FN5].
Like I have before, I would say that bringing up western nations’ economic goals as justification for human rights violations is painfully stupid. It is not the U.S. Trade Representative’s concern what human rights activity is going on in another country. It is up to the United Nations, the corporations, foreign ministries and U.S. State Department’s human rights section, as well as domestic governments to clean up this mess. This is not only about economic advancement. If it was, I would say America should never get dollars by climbing on the backs of the abused. This is about world powers and staying in the game. What is more important than that?
If things could always be right, simple, easy, and everybody won, then anyone would be a politician. Sometimes all the coins cannot fall in the pot. At this current time, the environment and human rights have to pushed aside for the real danger, which is giving China no limits in their ambitions. An ambitious China will take no prisoners. In 1994, Clinton made the right decision because international relations with China were at stake. In 2015, unparalleled power is within China’s reach. America should not just hand China the throne. America has built an empire, and while it is crumbling, it must hold its position. It took decades to build America. In a few years, it can be completely annihilated if it does not maintain.
So in 1994 and 2015, free trade is the right call. But those Democrats who are aware of human rights violations have a fair concern. So do the environmental groups. Their concerns are dutifully noted. If this deal was to be renewed/expanded in 10 years or a similar deal was to be made down the road, I do not know if I would support it then. I may oppose China joining the TPP because it gives them an unfair amount of benefits when they do not need them. I may also see it as an excellent profit for all parties. I do not know. I may view the environmental or human rights problems far too severe, regardless of economic/political implications. The outsourcing should probably be capped by 2025. I may reject the deal just like many Democrats did this time around. As much as I would have liked to join their fierce opposition, my evaluations are holding me back. After observing and considering all the details, facts, and changing circumstances, I am left with no choice but to back the TPP. But unlike those who have this black and white, nihilist, and indifferent naiveté which leads them to thinking political stances are set in stone forever (see “America, Australia, France, and Great Britain would always put economic advancement over human rights advancement”), I know better. And priorities change. That’s why my personal beliefs that prioritize the environment and human rights didn’t affect the forming of my opinion here. And my position here will not stop me from forming a different position (if necessary) in a future trade agreement in 2025 or 2030.
The TPP is a part of Obama’s brilliant China policy
My theory is that the TPP is something much greater than just an opening of products flowing into Japan, Malaysia, Chile, and the United States. It is a key component of President Obama’s China plan. The TPP as mentioned before, is a clever way of keeping China from getting all the industrial production the world wants, by assigning that production elsewhere into Vietnam, Malaysia, South America, and others. It is a reminder to the rest of the world that these countries have labor as well. Why does America care? Because China is America’s rival and this is America’s way of putting a stop sign in China’s face. As Harvard Law School Professor Noah Feldman argues in The Cool War: The Future of Global Competition (2013), America and China are rivals, although not as fierce or cliquey as the Soviet Union-United States tension of the Cold War. Here, instead of forming power blocs to show influence, China and America compete to convince states to trade with them, so they can build their own economies. They have conflicting views over Taiwan. China tries to dodge human rights questions. America has morals. They have too much to lose economically if they decide to go to war. So it becomes a competitive rivalry with a touch of occasional collaboration, when needed. China is pragmatic now, like the United States. They don’t have a one size fits all answer like I continuously criticize. Which is why China and America trade together. They are friends14. President Obama has probably accepted the fact that China is extremely powerful economically, so you might as well be friendly and leave the door open for China to one day join the TPP. If you cannot beat them, join them.
But at the same time, the TPP is curbing that Chinese power, since America will not embargo and continue trade with China. In addition to that curb, the Obama Administration also teamed up with China to help cut carbon emissions in a joint clean energy plan, the first CO2 action ever taken by China15. And it is done in association with the U.S., of all people! Fighting climate change hand in hand is not only environmentally smart, but warms American-Sino relations as well. But that is not all! The Iran Nuclear Deal has overshadowed the U.S.-China Nuclear Agreement extension which is currently taking place as well, where the U.S. will extend the current nuclear framework. There are American-made nuclear reactors in China right now, and China is the one who wants to have the most Nuclear reactors in the entire world. While China is hard at work building them, they are currently selling power reactors to Pakistan, and is under contract with Romania and Argentina. The renewal makes sure the production of nuclear technology is safe and the technology transfers are regulated (U.S. sanctions Chinese corporations and individuals for illegally transferring them). There are serious concerns such as China possibly sending too many nuclear materials to Pakistan and supplying Iran and North Korea WMD materials, but is is up to Congress to read the paperwork16. Overall, it is certainly a good start. Both sides are looking for a renewal, which does not always happen or have to happen.
It appears President Obama lets China ravage the world economy (even America’s) and take in the spoils, but keeps China in check with the TPP, climate change deals, and nuclear cooperation. Obama continues to keep contact with the Chinese. This is certainly quite brilliant considering that everyone thinks Obama has a weak foreign policy. I would say his China policy may not be as great as President Nixon’s “Ping-Pong Diplomacy”, but is certainly memorable.
Hirak Mukhopadhyay is a rising junior at the University of Delaware, studying political science, economics, and philosophy. He is also the Director of Club Development for the University of Delaware Chapter of the College Democrats. Follow him on Twitter @Mookie_H
Some may have wondered while reading what NME designation is when I mentioned it earlier. NME (Non-Market Economy) designation is used to determine whether or not to impose antidumping duties (fees) on imports from Vietnam. The NME, according to the Cato Institute works as follows: “instead of comparing a product’s U.S. price with the price for the same or similar product in Vietnam, U.S. authorities compare it with a fictitious price constructed using surrogate values from third countries.”3. Now the Cato Institute calling the NME a trade barrier makes sense because right there in that definition, the NME sounds very stupid. There are U.S. laws regulating the designation, but are not reviewable through any court, so it has no oversight. I do agree with Cato that it is unacceptable to continue the NME designation, and Vietnam is certainly opposed to NME treatment3. It just does not seem very fair to me. To make the TPP a success, the U.S. should drop the NME immediately. One may shake their head at whatever Koch-backed, libertarian, conservative think-tank Cato Institute has to say, but the WTO has already banned the NME methodology3. So why does the U.S. not follow along with the World Trade Organization? In my view, it is ignorant and draconian for the United States to still use NME. I hope President Obama and the U.S. Trade Representative do something about abolishing the NME once and for all.
I also want to point out that some may wonder how a Democrat, liberal, and socialist like myself can cite a source like the Cato institute. Though I am certainly a Democrat and a liberal, I am also a pragmatic, and I find there are way too many positive benefits from this deal to pass it up, even though the TPP is a conservative policy. For those circles who may consider me a Marxist, I see myself sliding more to the center-right when it comes to economic ideology, and I proudly admit I support free-market economics and laissez-faire. I want to remind my liberal friends that America is and should be a capitalist society, although I contend hints of socialist or Marxist policies should be in our system as well. I view myself as an economic and civil libertarian, with sanity. While I believe government should sometimes let the market play out, I completely disagree with conservative/libertarian views on gun control, the environment, and limited government. I generally support the work of the American Civil Liberties Union (ACLU). I would say I’m socially very liberal, economically centrist.
The South China Sea is more than just a body of water. China desperately wants control over it for many reasons. But one notable reason is that underneath the SCS lies unclaimed minerals, oil, gas, and fisheries. Getting a hold of those and storing them away is a smart insurance policy for China’s economy. It gives China economic power17. If they can get control of it, the SCS is China’s golden ticket.
For those wondering what the Shanghai Cooperation Organization (SCO) is, it is an international coalition, emphasizing security and economic benefits. Members of the SCO include China, Kazakhstan, Kyrgyzstan, Uzbekistan, Russia, Turkmenistan, India, and Pakistan. It is very comparable to NATO, and a solid international effort. So solid, that there is talks of merging the Eurasian Economic Union (EEU) with the Silk Road (see “Silk Road Initiative” above). But don’t be fooled. Russia does not have the upper hand; China is the leader of the pack, and has the majority of assets in the Asian Infrastructure Investment Bank (AIIB) (not to be confused with the Asian Development Bank), Russia does not11. So it is very clear, that China is a world power.
Here is the paper I was referencing as my earlier work. Reading this may make my position on human rights more clear.
My last bit about having more useful human rights laws and economic development to help combat human abuse stems from a debate between University of Chicago Law School Professor Eric Posner and Human Rights Watch Executive Director Kenneth Roth. In this debate, I partly agree with Posner’s claim that foreign aid and economic development can help fight human rights issues, but fully agree with Roth that we need human rights laws to fight the abuse. I have enclosed the debate here:
1“Trade Act of 2015 (H.R. 1314).” GovTrack.us. GovTrack.us, n.d. Web. 05 Aug. 2015. <https://www.govtrack.us/congress/bills/114/hr1314#>.
2“H.R. 1314: Trade Act of 2015 — Senate Vote #193 — May 22, 2015.” GovTrack.us. GovTrack.us, n.d. Web. 05 Aug. 2015. <https://www.govtrack.us/congress/votes/114-2015/s193>.
3Watson, K. William. “How Will the TPP Impact Vietnam’s “Nonmarket Economy” Designation?” Cato.org. Cato Institute, 31 Mar. 2015. Web. 05 Aug. 2015. <http://www.cato.org/blog/how-will-tpp-impact-vietnams-nonmarket-economy-designation>.
4Chung, Evelyn. “Japan’s Abe to Congress: Trade Deal Is ‘awesome'” CNBC.com. CNBC, 29 Apr. 2015. Web. 05 Aug. 2015. <http://www.cnbc.com/2015/04/29/japans-abe-to-congress-tpps-value-is-awesome.html>.
5Ahmed, Akbar Shahid. “Why Is The U.S. Desperate To OK Slavery In Malaysia?” The Huffington Post. TheHuffingtonPost.com, 26 May 2015. Web. 05 Aug. 2015. <http://www.huffingtonpost.com/2015/05/26/tpp-malaysia-slavery_n_7444978.html>.
6Granville, Kevin. “The Trans-Pacific Partnership Trade Deal Explained.” Nytimes.com. The New York Times, 11 May 2015. Web. 05 Aug. 2015. <http://www.nytimes.com/2015/05/12/business/unpacking-the-trans-pacific-partnership-trade-deal.html?_r=0>.
7O’Neil, Shannon K. “What Does the TPP Mean for Latin America?” CFR.org. Council on Foreign Relations, 19 May 2015. Web. 05 Aug. 2015. <http://www.cfr.org/latin-america-and-the-caribbean/does-tpp-mean-latin-america/p36556>.
8Baker, Peter. “Obama Scolds Democrats on Trade Pact Stance.” Nytimes.com. The New York Times, 08 May 2015. Web. 05 Aug. 2015. <http://www.nytimes.com/2015/05/09/business/nike-to-create-jobs-if-trans-pacific-partnership-is-approved.html>.
9Burfisher, Mary E., John Dyck, Birgit Meade, Lorraine Mitchell, John Waino, Steven Zahniser, Shawn Arita, and Jayson Beckman. Agriculture in the TransPacific Partnership. Rep. N.p.: n.p., 2014. USDA. Web. 5 Aug. 2015. <http://www.ers.usda.gov/media/1692500/err176_summary.pdf>.
10Alden, Edward. “With TPP and TTIP, United States and EU Reassert Control Over Rules of Global Trade.” CFR.org. Council on Foreign Relations, 19 Dec. 2013. Web. 05 Aug. 2015. <http://www.cfr.org/trade/tpp-ttip-united-states-eu-reassert-control-over-rules-global-trade/p32103>.
11Piekos, William. “The Risks and Rewards of SCO Expansion.” CFR.org. Council on Foreign Relations, 08 July 2015. Web. 05 Aug. 2015. <http://www.cfr.org/international-organizations-and-alliances/risks-rewards-sco-expansion/p36761>.
12Wikileaks. Analysis of Leaked Environment Chapter Consolidated Text. Rep. N.p.: Sierra Club, WWF, NRDC, 2014. Web. 5 Aug. 2015. <http://action.sierraclub.org/site/DocServer/TPP_Enviro_Analysis.pdf?docID=14842>.
13Carter, Zach. “Obama Shrugs Off Global Slavery To Protect Trade Deal.” Huffingtonpost.com. Huffington Post, 27 July 2015. Web. 5 Aug. 2015. <http://www.huffingtonpost.com/entry/malaysia-human-trafficking-tpp_55b66521e4b0224d8832fe28?>.
14“After You.” Economist.com. The Economist, 15 June 2013. Web. 05 Aug. 2015. <http://www.economist.com/news/books-and-arts/21579430-will-bipolar-world-be-peaceful-after-you>.
15The White House. Office of the Press Secretary. FACT SHEET: U.S.-China Joint Announcement on Climate Change and Clean Energy Cooperation. Whitehouse.gov. The White House, 11 Nov. 2015. Web. 5 Aug. 2015. <https://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-
16Squassoni, Sharon. “Nuclear Cooperation with China.” CSIS.org. CSIS|Center for Strategic and International Studies, 16 July 2015. Web. 05 Aug. 2015. <http://csis.org/publication/nuclear-cooperation-china>.
17 French, Howard W. “What’s behind Beijing’s Drive to Control the South China Sea?” Theguardian.com. Theguardian, 28 July 2015. Web. 5 Aug. 2015. <http://www.theguardian.com/world/2015/jul/28/whats-behind-beijings-drive-control-south-china-sea-hainan?CMP=twt_gu>.