Is the TPP Dead or Merely Comatose?
Trump might repackage it as the Trump Pacific Partnership
Two weeks after his victory, US President-elect Donald Trump posted a video on YouTube in which he declared that on his first day in office, “I am going to issue a notification of intent to withdraw from the TPP, a potential disaster for our country. Instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores.”
However, if not on Day One after taking office, very soon into his administration Trump will have to deal with the real world of economic and strategic relationships. He has already backed off much of his campaign rhetoric and he likely will have to rethink his stance on the TPP as well. The CEOs of American corporations are queuing up to educate the new administration and Congress on the opportunities the pact offers to increase US exports of goods and services embodying our most competitive technologies. They’ll warn also that restricting imports of low-tech consumer goods will disproportionately push up the cost of living for poorer Americans.
NAFTA and other trade pacts remade America’s economic landscape, to be sure. Still, the troubles of the millions who’ve lost industrial jobs and fallen out of the American middle class can’t be blamed on an absence of alternative work opportunities. The “new economy” has created demand for plenty of skilled jobs.
At the same time that employment in coal mining has fallen, for example, the natural gas industry has boomed, exploiting the new fracking technology. The US’s problem lies in failing to retrain veteran workers in new skills. Washington and the free market economists on which it relies were oblivious to the political consequences of a profound structural shift in the American in our economy. Neither Reagan, nor Clinton, nor either Bush nor Obama evidenced particular interest in retraining blue collar workers made redundant by pacts like NAFTA. A smart Trump administration would step up to that challenge.
Moreover, what is President Trump going to tell our prospective partners in the TPP? Japan just this week has ratified it and several other Asian nations are considering doing the same thing. It’s one thing to blow off Vietnam or Brunei, another to stiff Japan or Australia, Singapore or South Korea. Trump says he wants our allies to spend more on their own defense. They’re unlikely to do much to oblige him if Trump, meanwhile, is taking the TPP off the table.
Trump could surely figure out how to pull off a cosmetic renegotiation of the TPP. At the end of the day, after a few consensual tweaks, he could declare victory. He could say that his negotiators had undone provisions that served only multinationals at the expense of the American working class. And then, if he’s smart, he’ll push training programs that address the widening gap between rich and poor back home.
Back in May, I explained to the readers of Ba Sàm, Vietnam’s leading dissident blog, that “My country struggles to live up to an admirable set of national values. It always has…In this election year, we are especially distracted by our internal arguments. Thoughtful people worry that US politics have become hopelessly dysfunctional, that the center has hollowed out and constructive compromise has become almost impossible.
“In 2016, centrist Democrat Hillary Clinton is still the likely victor. We have worked thru socio-political upheavals before, and ultimately our institutions have adapted to new realities. . . . What’s different this time is that too many citizens of all sorts are underequipped to thrive in our 21st century economy. They struggle to avoid falling out of the middle class. Addressing their needs must also be high on the next president’s agenda.”
As election day neared, I was worried by Clinton’s offhand dismissal of Trump supporters as “a basket of deplorables.” I lamented her inability to speak to the anger her opponent was stoking. Her act wasn’t playing well where I live, the reddest part of a very blue state. Still, I was sure that the coarse, narcissistic, ignorant Donald Trump could not be elected to the nation’s highest office.
In June, when Vietnamese friends waxed euphoric over Obama’s brilliantly executed visit to Hanoi and Ho Chi Minh City. I cautioned that the TPP was not popular in the US. Further, the US remained mired and muddled in the Middle East, however important that redeploying naval strength to ensure stable relations and shared growth in the Asia-Pacific is to our own security and welfare. I’d added that perception of Vietnam as a rigidly totalitarian police state put very real limits on the American public’s willingness to imagine intervening on Hanoi’s side in a showdown with China in the South China Sea.
In the gray dawn of Nov. 9, however, contemplating the prospective Trump administration, I wondered if I or any American still had standing to lecture other nations, on the blessings of democracy.
In the next few days, messages arrived from Vietnamese friends. How would Trump’s election impact on their nation’s maturing partnership with the United States? Was the Transpacific Partnership (TPP) trade pact now dead on arrival?
From the Institute of Southeast Asian Studies in Singapore, Lê Hồng Hiệp sent me a link to a video clip of Trump’s references to Vietnam during the campaign. In it, the president-elect reels off a list of countries that are “taking our jobs, taking our wealth,” ending with an incredulous “even Vietnam!” The TPP is “the greatest danger yet,” Trump insisted. It “would force American workers to compete directly against workers from Vietnam, one of the lowest wage countries on earth.”
Yes, bashing the TPP has been popular. Democrat hopeful Bernie Sanders’ supporters hated it too. Hillary Clinton, perhaps judging the TPP just too hard to explain, abandoned it after early support. Lost in a torrent of sound bites was hope of rational discussion of an imperfect but nonetheless important effort to codify 21st century rules for managing business among nations.
Now, with the election decided, that discussion has to take place. Iowa Gov.Terry Branstad’s agreement to serve as Trump’s US Ambassador to China may be a signal that the new president is willing to ease trade tensions between the US and China. In four terms as Iowa’s chief executive, Branstad invested a lot of energy in building good markets for Iowa farm products there – and indeed, his friendship with Premier and Communist Party boss Xi Jinping dates back to 1985, when Xi was an obscure Hubei province official.
The true litmus test of Trump’s commitment to trade — whether bashing or building – will be his choice of his US Trade Representative, that is, his chief negotiator. Washington bloggers say Trump is considering both free trader Charles Boustany, who as a Republican congressman from Louisiana co-founded a “Friends of the TPP” caucus, and tough as nails executive Dan DiMicco, the “deep trade skeptic” who from 2000 to 2012 led Nucor, America’s largest and most competitive steel company.
David Brown is a retired US diplomat and expert on Vietnam who writes regularly for Asia Sentinel