TPP’s death knell should help US change its China tack
US President-elect Donald Trump, 2016 Democratic presidential nominee Hillary Clinton and many Chinese may have one thing in common. None of them is fond of the Trans-Pacific Partnership (TPP) trade agreement, but for vastly different reasons.
Clinton, when secretary of state, called TPP the “gold standard”, but she opposed it during the campaign in order to win more union voters.
Trump seems more consistent. He announced on Nov 21 that a top priority for his administration is to withdraw from the 12-nation TPP, which he has repeatedly called “a potential disaster for our country”.
For many Chinese, the death knell sounded by Trump is welcome news because they finally don’t have to listen to President Barack Obama say: “The United States, not countries like China, should write trade rules.”
Such words sound not only humiliating to many Chinese, but also ridiculous and hypocritical.
Why on earth would anyone think China, with a fifth of the world’s population, should not be represented in writing global trade rules or any global rules? For Obama to think like that is akin to wishing that all the red states in the US should be banned from voting in the Nov 8 election.
Excluding China from making global rules and norms reveals a zero-sum and anti-democratic mindset, not to mention that China, rather than the US, is now the world’s largest trading nation.
The fact that Obama has constantly used TPP as a US foreign policy tool in its rebalance-to-Asia strategy altered the true meaning of the free trade agreement. The TPP before the Obama administration was never meant to be a geopolitical game.
TPP’s economic benefits are controversial to say the least. Some US economists who studied the documents carefully concluded that the economic benefits to the US are quite limited, in contrast to the praise heaped on it by US officials in lobbying Congress and the US public in the past year.
Some multinational corporations may be the winners from TPP, but many US workers and communities vulnerable to free trade agreements are likely to suffer. Over the years, the US government has done a poor job to help them, and Obama has not successfully assured them this time.
The opposition to TPP among Americans is so strong that at a rally on Nov 17 by Vermont Senator Bernie Sanders and his supporters near Capitol Hill, many held anti-TPP plaques and claimed that it was Sanders’ movement that brought an end to TPP.
In the past week, some in the US have made a last-ditch effort for TPP by arguing that the death of the treaty will give China an opportunity to advance its influence, and more specifically the Regional Comprehensive Economic Partnership (RCEP), reflecting the same zero-sum approach Obama had in selling TPP.
At the 27th China-US Joint Commission on Commerce and Trade in Washington last week, Vice-Premier Wang Yang, US Commerce Secretary Penny Pritzker, US Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack and other officials all talked about the rapid growth of bilateral trade and investment relations and more importantly, the huge potential ahead.
With such a prospect, there is no reason for China and the US not to pursue a win-win game that will benefit their peoples, but instead try to exclude the other in pushing forward their own multilateral trade deal as the Obama administration exhibited in TPP.
People close to Trump, such as former CIA director James Woolsey Jr, have indicated that the next US administration might join the Asian Infrastructure Investment Bank (AIIB) and even the One Belt One Road initiative.
Though nothing is sure, this is an encouraging signal, suggesting that the Trump administration may pursue more win-win cooperation with China instead of politicizing a trade agreement, a regional infrastructure investment bank and efforts to build connectivity whenever they are initiated by China.
Indeed, ditching the zerosum mentality and pursuing win-win cooperation is the only right choice for both China and the US.