- By Mark R. KennedyMark R. Kennedy is president of the University of North Dakota, author of "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.
While some were celebrating that, after years of negotiations, the United States and 11 other nations had finally reached an agreement on the Tran-Pacific Partnership (TPP), Republican presidential candidate Donald Trump took to Twitter to malign the trade pact as a “terrible deal.” The move was further proof, for those who still need it, that Trump is rich in negative bluster and bankrupt on positive ideas. If Congress heeds his populist pandering on TPP, it would weaken America, abandon our allies, harm American workers, and escalate tension with China. By supporting TPP, Jeb Bush and Marco Rubio reflect their prioritizing sound policy over demagoguery.
No deal negotiated amongst 12 nations will be exactly what any one of them would have chosen, had they been allowed to set the terms. Some industries are happier with the deal than others. The challenge of agreeing to international accords was highlighted again on Tuesday by the European Court of Justice upending a 15-year-old data transfer pact. Each of us can find something in the TPP final agreement that we oppose. However, in its entirety, the TPP is a profoundly positive geopolitical and economic step forward for America.
Opposing the TPP is tantamount to the following:
Weakening America economically. Instead of the TPP, whose high standards play to America’s strengths, China would prefer that the Regional Comprehensive Economic Partnership (RCEP) be the centerpiece for Asian trade. RCEP includes 16 Asian countries, but not the United States. There are few things more determinative of American youth’s economic future than whether they are on the inside of a Pacific trade agreement that represents 40 percent of the world’s economy or on the outside of an Asian trade agreement that excludes the United States.
Abandoning our allies. Japanese Prime Minister Shinzo Abe took a great risk to lead Japan into entering the TPP. He also recently led a highly controversial move to approve deploying its military overseas, making Japan a more capable ally. Approving the TPP would do more than just boost the American economy. It would also help Abe advance reforms to revitalize Japan’s economy and make it an even stronger partner. Rejecting it would undercut a loyal friend.
Giving American workers “a punch in the gut.” There is not one opponent of the TPP (including Trump and Mike Huckabee) that does not maintain that America is more open than other countries. This is largely true and is precisely why trade agreements that lower barriers enhance opportunities for American workers to benefit from their hard work and innovation. The TPP eliminates more than 18,000 taxes that various countries put on our products.
The emerging middle class in Asia is hungry for the high quality goods and services that are America’s hallmark. Lowering barriers would clear the path to selling Asia more of what America produces. Rejecting the TPP would forego these opportunities for America’s middle class.
Escalating tensions with China. There are two paths for the relationship between China and America — one that leads to more tension (rejecting the TPP) and one that provides the hope those tensions can be reduced (approving the TPP).
As I outlined in January:
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 that surround 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.
If we add rejection of the TPP to our inaction on China’s provocations of building islands in the Pacific and cyber-theft, we will appear even weaker and give our allies less confidence. Weakness begets conflict.
A successful TPP would be a sign of American strength. The size of the market it represents would be attractive for China to join. China should be welcomed to join the TPP on the same terms as other countries, including its rules for state-owned enterprises and a free and open Internet. China’s eventual inclusion in the TPP would strengthen the region’s institutional bias towards an open, rules-based regime. That would lessen the likelihood of conflict.
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. TPP is America’s ultimate geopolitical and economic trump card. Donald Trump suggesting that we discard it confirms that he knows little about the art of the deal.
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