Trump Trumps the TPP
It is easy to see that the United States has invested in a global economy. When we look at the clothing we wear, the cars we drive, or the food we eat, products made solely in the US are becoming a rarity. Many American run stores and businesses rely on the backs of workers and specific goods from other countries, as our national economy is already extremely intertwined with the economies of other nations. For the past eight years, the Obama administration has focused on improving our relations and economic ties with other countries. Former president Barack Obama once stated, “We know that the nation that goes all- in on innovation to will own the global economy tomorrow… This is an edge America cannot surrender.”
One of the most debated topics between politicians is whether the United States should sign onto the Trans Pacific Partnership: a laissez faire multinational trade agreement furthering economic ties between the United States and eleven other countries. Each country is required to remove thousands of protective tariffs and taxes that impose on the imports and exports of the countries involved. It is the single largest trade deal ever proposed in history, and promotes worldwide competition over isolationism. According to the Obama administration, the trade agreement hopes to “promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in the signatories’ countries; and promote transparency, good governance, and enhanced labor and environmental protections.”
According to Forbes, the economic success of the United States has been falling drastically since 1960. From 1960 to 2014, America’s GDP has fallen from 40% of the world’s to only 20%. This fall has been attributed to the decline of American industry. Strict humanitarian standards and minimum wage regulations have caused many businesses to demand services from countries that will manufacture goods for cheaper prices despite protective tariffs.
The Trans Pacific Partnership allows the United States to have a trade alliance with Pacific rim countries that are taking away from American industry. They are responsible for creating approximately 40 percent of the world’s GDP. Although this trade alliance will support labor being done overseas, it will also expand US markets. In addition, it allows us to freely have access to the goods and services of other countries without the imposition of costly tariffs and taxes.
In addition, our engagement in emerging trade deals could act as a beacon of hope to other countries involved. If we are able to dominate the global economy while promoting humanitarian rights at home and abroad, other countries may follow the path we create. However, this would be nearly impossible to enforce economically as the TPP deal allows countries to sue opposing governments in foreign tribunals if they infringe on the success of their imports and exports.
However, President Donald Trump has stressed his concerns regarding globalization, and has pushed an “America First” agenda. Within his first week of office, President Trump signed a contentious executive order pulling the United States out of negotiations regarding the TPP with hopes to strengthen employment within America. Many politicians and working class Americans fear that the lack of protective tariffs and regulations will force working class Americans to directly compete with the working classes of other countries that are notorious for having lower minimum wages, environmental protection regulations, and humanitarian standards.
Many progressives fear that the Trans Pacific Partnership will further incentive unethical wages, low working standards, a lack of environmental protections, and even child labor in order to keep prices low. Although promoting free enterprising is a major ideal in the United States, America’s core values align with democracy and equal opportunity. Is it ethical for us Americans to fight for high living standards and democratic values at home while simultaneously incentivizing the destruction of these values over seas?
Progressives also fear that the TPP will increase income inequality. As more labor based jobs are shipped overseas, US factory workers would lose their main source of income. As the lower class would sink further into poverty, the trade deal would expand economic opportunity for middle and upper class. Although TPP has an annual GDP of approximately 28 trillion, most of that money would go directly to the wealthiest corporations within the United States. In order to truly benefit, the US would need to shift away from labor based jobs, and move towards jobs that require ideas and innovation. This is where the US can truly compete against other countries.
Although it is impossible to know how US involvement in the TPP would have played out, President Donald Trump has promised to make one on one trade deals with new countries. In addition, he’s reopening the negotiation process with smaller free trade deals such as the North American Free Trade Agreement. The effect of these trade agreements will be similar, except on a smaller scale. An additional goal of these trade deals will be to stimulate employment within the US. President Trump stated ‘We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed.”
However, President Trump is receiving hate from both Obama-loving democrats, and traditional republicans. For instance, John McCain referred to Trump’s action as a “huge mistake”. McCain continued to say, “It will send a troubling signal of American disengagement to the Asia- Pacific region at a time where we can least afford it.” Despite having a republican run congress, Trump has already signed over twenty executive orders since his inauguration. The excessive use of executive orders has caused governmental decisions to be less representative of US residents. The terms and conditions of the Trans Pacific Partnership are still being negotiated and developed by remaining countries, however, Trumps disengagement with the negotiation process disincentived countries involved to shift the terms of the deal to appeal to American values. Due to its controversy, it was possible for the TPP to get rejected in congress. In order to guarantee congressional support, included countries may have revised aspects of the trade alliance in order to keep the US involved. Trump’s dissociation with the deal has made it impossible for the TPP to develop into a trade deal that supports and preserves American values abroad.
In addition, this gives China leeway room to replace the role of the United States if they are invited into the TPP. The original deal excluded China in order to put a cap on their regional influence. China currently represents approximately 17.75% of the world’s GDP, and they could easily dominate over other participating countries. Not only would they gather significant revenue over the US, but they could potentially set standards for trade agreements in the future. Similar to other countries in the Pacific Rim, China’s humanitarian standards and environmental protections are unethical, especially when compared to those enforced in the United States.
Unfortunately, we will never be able to see a TPP with United States leadership. However, as the US continues to immerse itself into a global economy, similar, small scale trade deals are sure to arise. Hopefully, under the Trump administration, we will be able to bring jobs back into the United States while maintaining our influence abroad.
Baker, Peter. “Trump Abandons Trans-Pacific Partnership, Obama’s Signature Trade Deal.” New York Times, New York Times Company, 23 Jan. 2017, www.nytimes.com/2017/01/23/us/politics/tpp-trump-trade-nafta.html?_r=1. Accessed 2 Apr. 2017.
“Global Economy.” US News, US News and World Report L.E., www.usnews.com/topics/subjects/global-economy. Accessed 2 Apr. 2017.
Granville, Kevin. “What Is TPP? Behind the Trade Deal That Died.” New York Times, New York Times Company, 23 Jan. 2017, www.nytimes.com/interactive/2016/business/tpp-explained-what-is-trans-pacific-partnership.html?_r=1. Accessed 3 Apr. 2017.
Patton, Mike. “U.S. Role in Global Economy Declines Nearly 50%.” Forbes, B.C. Forbes Publishing Company, 29 Feb. 2016, www.forbes.com/sites/mikepatton/2016/02/29/u-s-role-in-global-economy-declines-nearly-50/#f8792065e9e7. Accessed 2 Apr. 2017.
“Summary of the Trans- Pacific Partnership Trade Agreement.” USTR, Office of the United States Trade Representative, ustr.gov/about-us/policy-offices/press-office/press-releases/2015/october/summary-trans-pacific-partnership. Accessed 2 Apr. 2017.
“Trans-Pacific Partnership (TPP): Expanded Corporate Power, Lower Wages, Unsafe Food Imports.” Public Citizen, 2017 Public Citizen, www.citizen.org/TPP. Accessed 2 Apr. 2017.
Yuhas, Alan. “Congress Will Abandon Trans-Pacific Partnership Deal, White House Concedes.” The Guardian, Guardian News and Media Limitted, 12 Nov. 2016, www.theguardian.com/business/2016/nov/12/tpp-trade-deal-congress-obama. Accessed 2 Apr. 2017.