In New Zealand on 4 February, trade ministers from the twelve signatories to the Trans-Pacific Partnership (TPP) formally signed the pact, an important step towards lowering trade barriers and introducing new rules governing trade and investment among some of the Asia-Pacific region’s largest economies. However, while signing the agreement was an important symbolic step forward, all members still must ratify TPP within two years, or, failing that, at least six members with a combined gross domestic product (GDP) of at least 85% of the bloc’s total GDP must ratify it at some point in the future for the agreement to come into force.
With the agreement signed, it is now up to political leaders to guide TPP to implementation. In the United States, Japan, and Canada, the bloc’s largest members without which it will be virtually impossible to bring TPP into force, the agreement has been shrouded in controversy as politicians have wrangled over the likely impact on businesses and workers. The agreement has already been drawn into U.S. presidential politics, with both Democratic and Republican candidates criticizing TPP for its anticipated impact on the U.S. economy.
Absent from these debates, however, is any discussion of the role of TPP for U.S. strategy in the Asia-Pacific. This is despite Democratic frontrunner Hillary Clinton’s role in spearheading U.S. participation in TPP as part of the “pivot to Asia” strategy she articulated as secretary of state, which sought to renew the US strategic and economic commitment to Asia. “Harnessing Asia’s growth and dynamism is central to American economic and strategic interests and key priority for President Obama,” she wrote in 2011.
Other Obama administration officials have echoed this vision of the U.S. role in Asia and have stressed the importance of TPP and economic strategy more broadly for U.S. security interests in the region. For example, during the 2015 debate over whether Congress should grant the administration trade promotion authority (TPA) – whereby Congress agrees to a simple up-or-down vote on trade agreements without the opportunity to amend them – Secretary of Defense Ashton Carter argued, “passing TPP is as important to me as another aircraft carrier.” He continued, “It would deepen our alliances and partnerships abroad and underscore our lasting commitment to the Asia-Pacific.”
The argument is not that U.S. security will be directly threatened if TPP fails. Instead, the Obama administration’s argument has been that by “rebalancing” to Asia the U.S. will be able to take advantage of a historic opportunity to shape the region’s future, while also creating new economic opportunities for U.S. businesses. Failing to implement the rebalance – and, since it has become the major economic pillar of the rebalance, ratify TPP – would be a missed opportunity for the U.S. The implication is that the emergence of new middle-income countries in Asia, including China but also India and the emerging markets of Southeast Asia, is a historic shift on par with the postwar development of Japan and the Asian tigers of South Korea, Taiwan, Hong Kong, and Singapore. Just as the U.S. contributed to these countries’ development through preferential market access, development assistance, and investment during the Cold War, the Obama administration, too, wants to replicate this feat in the 21st century on a broader scale.
Of course, Washington’s rhetoric is not entirely about positive-sum gains from deepening the U.S. commitment to Asia through TPP and other initiatives. At times, the Obama administration’s argument about TPP and the rebalance to Asia more broadly has stressed the zero-sum competition between the U.S. and China to shape the region’s economic future. As President Obama said in his State of the Union address in 2015, “China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field.” While this framing overstates the extent to which China is able to create broadly legitimate regional institutions – the struggles surrounding the creation of the Asian Infrastructure Investment Bank (AIIB) suggest that Chinese-led institutions will not displace incumbent institutions anytime soon – it nevertheless speaks to the reality that if the U.S. is unwilling to invest in the region or commit significant political and economic resources to its development, China will not hesitate to fill the vacuum with infrastructure investment and trade agreements of its own. While the countries on China’s periphery appreciate the U.S. military presence as an ultimate guarantee of their sovereignty, U.S. security guarantees are no substitute for policies that speak directly to the aspirations of millions of people in emerging Asia.
The problem facing the Obama administration is that the argument that trade agreements advance U.S. strategic interests no longer carries much weight domestically. At least since August 1971, when Richard Nixon announced the end of the Bretton Woods system of fixed exchange rates and allowed the dollar to devalue at the expense of U.S. allies in Asia and Europe, it has become increasingly difficult for U.S. political leaders to support policies that place strategic considerations ahead of U.S. economic competitiveness. Subsequent developments – the hollowing out of U.S. manufacturing, trade friction with Japan in the 1980s and 1990s, the questionable benefits of freer trade with China, and growing inequality – have all reinforced doubts that the strategic benefits of trade agreements like TPP are worth the costs imposed on U.S. businesses and workers. As a result, despite the merits of the strategic argument for TPP, it is unlikely to carry the day in the U.S. Congress. The future of U.S. leadership in Asia may ultimately depend on whether Obama or his successor is able to convince lawmakers and the American public that the trade agreement enhances U.S. competitiveness and creates new opportunities for all Americans.
