Why We Need a Moratorium on Trade Deals Like the TPP

[cali]

POLITICO Magazine

It is time for what the Japanese call hansei (reflection over one’s mistakes) among the Davos crowd—the corporate chieftains, business lobbyists, policy wonks and journalists who sold Washington and other world capitals on the glories of free-trade deals over the past few decades. Of all the messages emanating from the American electorate in the 2016 campaign, popular hostility toward trade agreements is one of the most resounding. It is also perhaps the only grievance that unites left and right.

Donald Trump’s success in storming his way toward the Republican presidential nomination is due in no small part to the derision he routinely heaps on trade deals the United States has struck with other countries. Likewise, Bernie Sanders’ attacks on trade agreements help fuel his populist insurgency, forcing Hillary Clinton to back away from the Trans-Pacific Partnership, the pact among 12 Pacific Rim countries that she once championed as secretary of state.

In response, many Davos men and women will be tempted to do what they’ve done in the past: Hunker down. Wait out the election and hope for a return to business as usual—negotiating more complex bilateral or regional free-trade accords. Presidential campaigns often feature a candidate or two who seizes the spotlight and soars in the polls for a while by railing against trade agreements—notable examples including Ross Perot in 1992, Pat Buchanan in 1996 and John Edwards in 2004. Sometimes even the victors stake out moderately anti-trade positions, as Barack Obama did in 2008 when he vowed to revamp the North American Free Trade Agreement.

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Much more:

http://www.politico.com/magazine/story/2016/06/trade-deals-tpp-moratorium-213975

[pampango]

1. Good article. Anything that keeps Donald from reeking havoc deserves attention.

The WTO is the current embodiment of the system established after World War II to prevent a reversion to the mutually destructive trade conflict of the 1930s. Because countries take their trade disputes to independent WTO tribunals, they refrain from tit-for-tat retaliation that can turn into trade wars. And they abide by their commitments to keep lids on their trade barriers, knowing that failure to do so would result in WTO-applied sanctions.

But a host of troubles are besetting the Geneva-based trade body. The failure of WTO-sponsored global trade talks, known as the Doha Round, has dealt a serious blow to the organization’s credibility. Moreover, the WTO’s centrality to the global trading system is in doubt thanks to the proliferation of bilateral and regional trade agreements. Hundreds of these have been negotiated in the past 25 years, ranging from the big and well known (such as NAFTA) to the small and ridiculous (such as the Singapore-Jordan free trade agreement). Partly that is because trade negotiators prefer striking smaller, easier deals to the long, hard slog involved in thrashing out an accord at the multilateral level.

To all this, the most vociferous trade critics might say, so what? Trump in particular shows no sign of caring about the WTO, or even understanding its basic principles. His threats to slap 45 percent tariffs on Chinese goods, and 35 percent tariffs on Mexican goods, would grossly violate the rules that the U.S., as a member, has pledged to uphold. Such tariffs would do nothing to bring U.S. jobs back home anyway, because American multinationals would simply move their Chinese and Mexican operations to other low-wage countries.

As for the TPP, it may help induce China (which is excluded) to come to the negotiating table and change some of its most problematic practices. But henceforth, U.S. trade negotiators should devote their energies to enhancing the resilience of the WTO and drop new attempts at bilateral or regional trade deals. Otherwise in the future, the Davos crowd will find itself up against anti-trade candidates who are more formidable than Trump and Sanders.

[cali]

2. I agree. It's a balanced article.

But China and currency manipulation, are not the only problems with the TPP. And I don't buy that the TPP will shift power from China.

[pampango]

3. Agreed. In the long run China is 4 times the size of the US and will be an economic powerhouse

unless it implodes somehow, which would not be good for their 1/4 of the world's population - and maybe for the rest of us, too.

Obama may think it somehow will restrain the rise of China and the way it does business but that may be wishful thinking, in the long run.

[cali]

5. Exactly. There is no stopping of that train- unless, as you say, it implodes somehow

and we better damn well hope not.

Of course China's influence in the region, and beyond, will continue to grow. How to harmonize with that, is the big question.

[joshcryer]

4. Rec'd for that reason.

[midnight]

6. Love this article-especially the first paragraph...

"Of all the messages emanating from the American electorate in the 2016 campaign, popular hostility toward trade agreements is one of the most resounding." It really makes you wonder why the Democratic Platform commettie members are keeping this horrid deal going?