- By Mark R. KennedyMark R. Kennedy is president of the University of North Dakota, author of the forthcoming book "Shapeholders: Business Success in the Age of Activism," a member of the Council on Foreign Relations, and chairman of the Economic Club of Minnesota. He previously served three terms in the U.S. House of Representatives, was senior vice president and treasurer of Federated Department Stores (now Macy's), was a member of the Advisory Committee on Trade Policy and Negotiation under Presidents George W. Bush and Barack Obama, and led George Washington University’s Graduate School of Political Management.
When surveying the global landscape, there are many reasons for concern. At least two countries — China and Russia — show signs of seeking regional hegemony. Whether your foreign-policy goals are to balance power, strengthen global institutions, or advance our ideals, the emergence of an authoritarian regional hegemon should be highly disturbing. At the same time, America’s key allies — Europe and Japan — struggle with anemic economies.
Pending trade agreements in both the Pacific and Europe offer the opportunity to strengthen each region’s commitment to the global order and boost our allies’ economic prospects, all while also enhancing America’s economic growth and job creation. That is why advancing trade agreements should be the United States’ top geopolitical priority in 2015.
Chinese President Xi Jinping’s desire for a “new model of great power relations” appears to seek to have America’s regional influence wane as China’s advances. China seems to be striving to undermine our allies’ confidence in our resolve to protect them from rising Chinese power. China’s strategy to deny U.S. forces access to waters surrounding Taiwan and reach out to Japan and the Philippines, in part a play for resources, serves this end. By pressing our allies on disputed islands where America has no clear interest, China hopes that just as its neighbors are more eager for U.S. support, we will be less willing to risk open conflict with China by providing it.
Finalizing the Trans-Pacific Partnership (TPP) would help prevent our rivalry with China either leaving us behind or stumbling into conflict in three ways.
It strengthens America economically and geopolitically. Few things are more important to America’s economic health than being on the inside of a Pacific trade agreement rather than being on the outside looking in on an Asian trade agreement. Developing closer relationships with Asian countries newly invigorated by the TPP would strengthen America’s geopolitical hand. China would be dwarfed by the economic power of the TPP countries harnessed together.
The TPP also strengthens America’s key Asian ally: Japan. Newly reaffirmed Prime Minister Shinzo Abe needs to shoot the third arrow of his reform package — structural reform of key economic sectors — to strengthen Japan. Abe continues to see the TPP as both “forcing coddled industries to become more competitive” and as an opportunity to positively offset disruptions caused by such reform.
Lastly, it makes global order more attractive to China. A successful TPP would make it more attractive for China to join. It should be welcomed to join TPP on the same terms as other countries, including its rules for state-owned enterprises. China’s eventual inclusion in TPP would strengthen the region’s institutional bias towards an open, rules-based regime.
Russia is more openly challenging the writ of the West with its annexation of Crimea, continued provocation in Eastern Ukraine, and steadfast support of the regime of Bashar al-Assad in Syria. Russia’s lack of progress towards meeting its World Trade Organization commitments adds to its pattern of flaunting global norms. Falling oil prices increase the risk of Russian President Vladimir Putin choosing confrontation to bolster domestic support.
The European Union’s economy risks returning to crisis status, which complicates its ability to take a firm stand against Russian belligerence. The EU’s new Trade Commissioner, Cecilia Malmstrom, reaffirmed the importance of the Transatlantic Trade and Investment Partnership (T-TIP) because of “what it can bring when it comes to jobs and growth, on both sides of the Atlantic … and to reconfirm our strong partnership across the Atlantic as well.” Including Turkey in T-TIP would bolster our relationship with an ally pivotal in successfully blunting Russian mischief.
Both President Barack Obama and incoming Senate Finance Committee Chairman Orrin Hatch have expressed a willingness to work together to advance Trade Promotion Authority (TPA), or fast track, that is an essential predecessor to completion of both TPP and T-TIP. Other negotiating countries cannot be expected to put their best offer on the table unless the president has the ability to submit any agreement for an up or down vote.
Joining the traditional opponents of trade liberalization — the unions — are some Tea Party Republicans. The angst over executive overreach by President Obama fuels these reservations from the right. Yet the geopolitical imperative to strengthen ties with key allies while mutually bolstering each other’s economies should mitigate these concerns.
Promoting prosperity and peace by championing a level playing field and the expansion of trade has long been one of America’s strongest cards to play. Its impact would be magnified by the bipartisan cooperation that would be required to do so. Passing the TPA should therefore be at the top of Washington’s New Year’s resolutions.
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