A Game of Trade – the TPP as America's Trans Pacific Pivot



As the world’s largest trade deal in the past 20 years, The Trans Pacific Partnership (TPP) promises huge benefits to its members. But domestic debates amongst the signing countries have focussed so far on issues like investor-state dispute settlement and intellectual property rules. We should be looking instead at the effects of the TPP on our region more broadly. It is from this vantage point that we can consider the TPP a symbol of the U.S. involvement in the Indo Pacific in the 21st century.

The TPP currently includes 12 countries, having grown from an original 4 and with the potential to grow further. It took over 7 years to negotiate the deal that was signed in 2016. It covers 37.5%, or $27.75 trillion USD of global GDP and 11.2% of the world’s population. Comprising large economies such as the U.S., Japan and Canada, as well as smaller economies such as Brunei and Peru, it is certainly diverse. The TPP can only come into effect if 6 countries ratify it, representing at least 85% of the TPP members’ combined GDP. This means that the U.S. will essentially need to ratify the agreement before it can enter into force.

Traditionally, trade deals have focussed on lowering tariffs, but the TPP goes a step further. As the vanguard of the next generation trade deals, it is the first to comprehensively address domestic regulations such as the environment and labour, and their impacts on trade. This is above and beyond the more traditional measures that have previously been addressed through the GATT and the WTO. In this sense, the TPP is potentially the most invasive of any previous trade deal. The purportedly invasive nature of the TPP is what has most angered its critics, but it is this comprehensiveness that most allows the TPP to transcend trade and represent geopolitics more broadly.

China, the largest economy not invited to this party, is the elephant in the room. China’s exclusion isn’t abnormal, having had a delayed ascension to the WTO in 2001 as it met global standards, set by the U.S., among others. However, China is fundamental to any debate about the TPP, with the perspective of the U.S. foreign policy establishment being that “the TPP represents a choice for the United States…between leading the world…or standing back and allowing others – most likely China – to write the rules of the road for Asia in the 21st century”.

A recent letter from 8 previous Secretaries of Defense of the United States highlights the security components embedded in the TPP. For the Secretaries, the TPP “is an important step in the process of furthering peace and increasing prosperity here in America and around the globe. The TPP will deepen relationships with allies in the Asia-Pacific region…and contribute to a safer world for ourselves.” For the security establishment in Washington, the TPP offers another avenue through which American power can be extended, and maintained, throughout the region.

America’s ‘Pivot’ to Asia is the vehicle through which this is being expressed. Launched by Obama in 2010, it is a ‘rebalancing’ towards the Indo Pacific that envisages a “larger and long term [U.S.] role in the region”. With three components - political, security and economic – the first two have garnered more press. The economic component is just as significant, though rarely discussed. One of the main authors of the Pivot, and the TPP for that matter, was Hillary Clinton back in 2010 as Secretary of State. Both of these policies seem to fit with Clinton’s more hawkish view on foreign policy.

So why is Clinton currently against the TPP? The short answer is Sanders and Trump who both pursue a particularly anti-trade agenda. For Clinton, two conditions could make her reconsider the TPP in the future – the future being after the election. Firstly, and most discussed, is the impact on American jobs. Secondly, and most relevant here, is advancing national security. It is here where we could see Clinton justifiably back-track on her current position, but only if she becomes President. A backtrack could be seen as mirroring President Kennedy’s approach to trade in that “the success of our foreign policy depends in large measure upon the success of our foreign trade”. This would be recognising the TPP as a crucial part of the U.S. Pivot.

Trade matters. In a globalised world with extensive supply chains, it matters even more. The U.S. Secretaries have it right, “engagement and leadership on international trade are fundamental to U.S. national security.” As one of the United States’ greatest allies, it’s in Australia’s best interests for the TPP to be ratified.

George Threadgold is an undergraduate BA student at the University of Melbourne, majoring in International Relations. He is currently on exchange at Georgetown University in Washington D.C.

This article can be republished with attribution under a Creative Commons Licence. Please email publications@youngausint.org.au with any questions or for more information.

Image Credit: Gobierno de Chile (Flickr: Creative Commons).

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