The American Brexit Is Coming
Why rejecting the Trans-Pacific Partnership would be a colossal mistake.
At a recent White House meeting, President Barack Obama assembled an eclectic cast of characters: the CEO of IBM, one of the largest corporations in the world; a trio of serving politicians from both parties comprising the mayor of Atlanta and governors of Louisiana and Ohio; a former secretary of the Treasury; a recent mayor of New York City, and the dean of a graduate school of international relations and former supreme allied commander (that’s me). Despite wildly divergent backgrounds and political affiliations, everyone in the room agreed on one thing: the value of free trade globally, with particular urgency on the need for the Trans-Pacific Partnership (TPP).
The president was measured, analytical, and pragmatic. In describing his recent trip to Asia, he kept reflecting on the constant refrain from our allies, friends, and partners: The United States was absolutely needed in the region. Washington has spent seven years negotiating this massive agreement (some 6,000 pages and 30 chapters) signed in February that would level the playing field in terms of trade, working conditions, and the flow of goods among a dozen nations — all good allies and partners to the United States. China, he said, was seen increasingly as a bully, using a combination of economic statecraft, hard-power moves in the volatile South China Sea, and territorial claims around the region to coerce behavior.
The deal on the table has one last chance of passing — the lame-duck congressional session after the November election. With both presidential candidates vowing to either reject or completely renegotiate the agreement over domestic competitiveness concerns, the moment is shaping up to be the American version of a Brexit from the Pacific region. Indeed, it’s impossible to not hear echoes of this summer’s surprise popular referendum, in which the United Kingdom decided to walk away from the vast European free-market trading zone over a combination of immigration concerns, fairness arguments about protected domestic industries, and irritation over imposed regulatory regimes. It was a serious geopolitical mistake for Britain to walk away from the European Union, and it would be equally serious for the United States to leave the TPP on the table and effectively walk away from a leadership position in Asia.
The case for the TPP is economically strong, but the geopolitical logic is even more compelling. The deal is one that China will have great difficulty accepting, as it would put Beijing outside a virtuous circle of allies, partners, and friends on both sides of the Pacific. Frankly, that is a good place to keep China from the perspective of the United States, and the treaty thus brings together not only Japan, Australia, Malaysia, Vietnam, and other Asian partners, but also Chile, Mexico, Canada, and Peru. The obvious missing member from Asia is South Korea, but indications are clear that over time South Koreans will want to be part of the agreement. This will be relatively easy to facilitate as South Korea already has a robust bilateral trade agreement with the United States.
The free-trade debate will continue to be part of the presidential election cycle as both candidates disavow the pact and seek to maximize votes in states that have been hit by job losses. While most economists point to the broader economic good engendered by free trade generally, the individual pockets of pain caused by heightened overseas competition become strong drivers in an election season. But in time, free trade grows the entire economy and creates a net increase in employment. The answer for individual segments of society that are disadvantaged is additional education and training that allows a pivot into new jobs. Broadly speaking, that has been the trajectory of previous trade agreements both here in the United States and abroad.
What is particularly compelling about the TPP, however, is the geopolitical argument in its favor. Three key points are especially salient:
China is on the march in Asia. Beijing intends to claim essentially the entire South China Sea as its territorial waters, based on preposterous historical arguments soundly rejected by international courts. It continues to build artificial islands, destroy reefs, and practice hybrid maritime warfare with unmarked sailors in “fishing boats” intruding aggressively into Japanese, Philippine, and Vietnamese waters. China clearly intends to be the dominant actor in East Asia, and absent a strong U.S. presence, it will succeed. An Asia dominated by China does not serve U.S. interests for a host of reasons, especially given the economic vitality of the region.
This is a moment of real vulnerability for many Asian nations. The unpredictable Philippine President Rodrigo Duterte is watching this potential U.S. Brexit from Asia and already talking about increasing military ties with China. Vietnam, historically wary of its massive neighbor to the north, frequently discusses its vulnerability with U.S. leaders. Japan is rattled by Chinese activity around the Senkaku Islands, and even South Korea — which maintains strong ties with China — is worried about Beijing’s seeming reluctance to rein in the behavior of its client state, North Korea. A U.S. failure to maintain a strong economic presence in the region — highlighted by the TPP — will have significant negative effects on our political and diplomatic position over time.
Sending U.S. aircraft carriers is not enough. Some would argue that the United States can exert all the influence it needs to by simply sending enough Carrier Strike Groups sailing through the western Pacific. That kind of simplistic “show the flag” argument doesn’t work in the 21st century; we are more than 100 years on from Teddy Roosevelt’s Great White Fleet. A nation’s influence is the composition of its military, cultural, political, and — above all — economic influence. As the leader of what would be the largest free-trade zone in the world, the United States would continue to exert real leadership in this crucial region.
While China is outside the TPP, membership in this exclusive club will only increase in value over the coming decade. Although China may bridle initially were the deal to come to fruition, the incentive to be included should have an ameliorating effect on its behavior over time, and provide a path to build a bridge to what will soon be the largest single-nation economy in the world.
Over 2,500 years ago, during the Zhou dynasty, the philosopher-warrior Sun Tzu wrote the compelling study of conflict The Art of War. There is much wisdom in that slim volume, including this quote: “The supreme art of war is to subdue the enemy without fighting.” The United States can avoid conflict best in East Asia by using a robust combination of national tools — with the TPP at the top of the list. Looking across the Atlantic to the Brexit debacle, we must avoid repeating the mistake in the Pacific.
The clear winner if the United States rejects the Trans-Pacific Partnership will be China, and an increasingly authoritarian and regionally dominant President Xi Jinping will be cheering the loudest.
Photo credit: OLIVIER DOULIERY/Getty Images