That’s Plenty Peculiar

As promised, this week our President withdrew the United States from the TPP.

International trade is an incredibly complex subject, and arguably not even the experts know all the consequences of such an action. I’m not a trade expert, but this topic is so full of peculiar ironies I can’t help but jot some of them down. “Peculiar” is a word which here means, “the result of a maddening phenomenon in which people’s brains urge them to do things contrary to their own self-interest.”

As you probably know, the TPP is (was) a trade agreement between several American and East Asian countries. One of its central tenets was to strengthen IP law across the Pacific, such as to lower the risk American companies face when outsourcing services to those countries. When examining historical precedents it is helpful to think of the TPP as something similar to NAFTA, but affecting the services industry rather than agriculture and manufacturing. Just as NAFTA routed American jobs in manufacturing and agriculture, so too would the TPP have crushed certain service sectors (nursing and software are oft cited) in the States.

(Irony #1) Given that I work as a software engineer, the decision by Trump to strike this thing down benefits me tremendously in the short/medium term. You think it’s easy to export manufacturing… how about when your raw materials can be sent over a wire? I still anticipate many more jobs in my industry are outsourced in the long term, but Trump’s move yesterday may have staved that off by some time. So thanks Donald.

As with many things, the TPP might have been nice if we did things properly around here. Generally speaking, getting services for cheaper is good for the economy. And bang for your buck, I can’t compete with a Vietnamese coder. Not even close. So if everyone in the United States got their software from Vietnam, most of us would pay less for the same software. Our standard of living would collectively rise a little… while mine would fall drastically. But had the United States implemented stronger measures for redistributing the wealth generated by such trade deals, everyone in our country would come out ahead. And then folks with the most to lose wouldn’t bang on about joblessness or elect strongmen to allay their fears.

(Irony #2) So while everyone is cheering Donald for his decision, we need to remember the only reason the TPP was a “terrible deal” is because our country literally doesn’t know how to handle all the wealth the rest of the world is throwing at us.

China. China. China. China. China. China. China. Another intent of this trade deal was to position American companies more competitively in the fastest growing markets in the world. Growth across the Atlantic has slowed considerably and will remain low for the foreseeable future, so a turn East is inevitable (or… not). The TPP would have made large American inroads into the Chinese economic sphere of influence. In short, even if it wasn’t going to help the American workers in the services industry, it was going to help American corporations stay ahead of China on the international stage.

(Irony #3) For all of Trump’s talk of China, the absence of a TPP weakens American corporations with respect to Chinese corporations.

The people who gain the most in the short term from this decision are the services workers and the urban and suburban economies they support, so…Hillary voters. Those least affected and even hurt slightly are those people who don’t work in services, particularly those people whose jobs have already left the building and whose service prices are now not getting any cheaper. They live in areas where population is too sparse to support a robust services industry, so… Trump voters. (Maybe too sweeping a generalization?)

(Irony #3) Short term, Donald’s decision to strike down the TPP helps urbanites and slightly hurts rural folk.

Don’t anticipate that the TPP stays dead. Trump has every incentive to renegotiate a trade deal with southeast Asia. Watch for it. It will likely be very similar to the TPP; naturally he’ll call it something different (“AFP”?). He thinks he can get a better deal for the American corporations involved. Given he’s a madman, this is probably true. Unfortunately until we resolve Irony #1, no trade deal is going to help the American people. So yes Mr. President, I’m waiting on the infrastructure jobs package you promised.

Irony #4 is yet to come… but it will probably be called something like “America First Partnership”. And his supporters are gonna love it.

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