In one week, Trump attacked NAFTA and the immigration policy, shut down the Trans-Pacific Partnership, started dismantling the Affordable Care Act and began building the wall. Say whatever you want of Trump’s first days in office, but one of these moves shouldn’t be lumped in with the others. The Trans-Pacific Partnership was doomed to a similar fate had almost any other nominee won the past election, and for good reason.
The Trans-Pacific Partnership was negotiated as an extension of an agreement made in 2005 called the Trans-Pacific Strategic Economic Partnership Agreement, which already involved Brunei, New Zealand, Singapore and Chile. In 2008, the aforementioned countries joined the United States, Australia, Peru and Vietnam in TPP negotiations. As the years went by, Malaysia, Mexico, Canada and Japan joined negotiations as well.
The plan was to strengthen economic ties between all nations involved by cutting import and export tariffs and emphasizing freer trade. As a supposed bonus, nations would be held to new regulation standards including environmental protection and workers’ rights. Countries’ GDP would likely rise over the long term. Progressives and those who work in the financial sector tend to back the partnership.
On the other hand, “freer trade” isn’t always better. Bring down tariffs, and it’s easier to import and export goods. If it’s easier to import goods, American manufacturers that create import-competitive goods receive less demand. Less demand means less money, and less money means lower wages and fewer workers. This is obviously a big issue with labor unions and their allies, who have already seen the domestic consequences of a growing global economy.
For those who weren’t sold on the last issue, currency manipulation was enough to make them oppose the partnership. The TPP, as it exists now, would still allow countries to artificially depreciate their currencies. A country sells their currency, usually against dollars, to keep exchange rates low. This raises the price of their imports, subsidizes their exports, and allows them a larger trade surplus. The country’s labor and domestic production grows while the United States and others suffer in return. Some estimate that the United States’ trade deficit is hundreds of billion dollars larger and that millions of jobs were lost during the Great Recession thanks to this protectionist policy.
Senator Bernie Sanders argues that trades should be made only when they benefit the American worker, something TPP does not accomplish. Hillary Clinton, who said during Obama’s presidency that she hoped TPP would become the next “gold standard,” later opposed TPP, saying it didn’t reach her “standards for more new, good jobs for Americans, for raising wages for Americans…And I want to make sure that I can look into the eyes of any middle-class American and say, ‘This will help raise your wages.’” Trump’s opinions of the partnership is already well-known. If TPP was bad for American workers, why was it signed?
Former president Obama, one of TPP’s greatest proponents, saw the deal as much more than an economic deal. In a statement, Obama said, “I understand the skepticism people have about trade agreements, particularly in communities where the effects of automation and globalization have hit workers and families the hardest. But building walls to isolate ourselves from the global economy would only isolate us from the incredible opportunities it provides. Instead, America should write the rules. America should call the shots. Other countries should play by the rules that America and our partners set, and not the other way around…The world has changed. The rules are changing with it. The United States, not countries like China, should write them.” Although I agree with the former president’s long term planning, patriotism and global vision, I also agree with other politicians who say that America has been too willing to compromise to get what it wants. If we want better security, better alliances and to write the rules with our global partners, we should keep working towards that goal. TPP, however, is one step forward, two steps back. America shouldn’t leave its own workers in the dust to move forward globally.