by Jamie Lee-Brown and Dominik Draxler
A Brief History of TPP
The Trans-Pacific Partnership (TPP) is, on paper, an attempt to breathe life into the biggest international trade deal seen in two decades. It has been billed as a chance to boost the world economy by $223 billion by 2025, to introduce the world to free-trade best practices and to lower tariffs between America, the economic engine of the twentieth century, and much of Asia, the economic engine of the twenty-first. These goals might seem easy to defend, but what is not so clear is whether they are being pursued for the right reasons. What is clear, however, is that this is a key implement in America’s foreign policy toolkit and its signing on the 5th of October gave the deal a fresh place in the foreign policy debate.
The pact is the brainchild of the United States and involves a club of twelve nations from East Asia and the Americas: Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile, Peru and, perhaps most importantly, — with a GDP more than double that of all the other non-US nations combined — Japan. America and Japan are “bookends” propping up either end of this deal, both geographically and in terms of their shared values and economic clout. The deal will potentially support pro-growth pre-election pledges, but, at the same time, help to calcify a global economic status quo which continues to favor those nations best served by the post-war Bretton Woods system. TPP is as much a political device as it is an attempt to liberalize international trade for the benefit of the many. Owing to the secrecy that characterized negotiations, it will be some time before the balance struck becomes common knowledge.
TPP’s China-Unfriendly Construction
What is known, is that the largest trading partner of the majority of signatories will not be in the club. The Financial Times recently quipped that eligibility criteria amounted to “anyone but China.” Any notion that the design of the treaty was without specific geopolitical implications disappeared when President Obama asserted that “we can’t let countries like China write the rules of the global economy. We should write those rules.” While the deal’s framework was constructed with future membership expansion in mind, this is unlikely to constitute a viable invitation for China to come late to the party. The very substance of TPP is based upon a system designed to support the needs of multinationals over those of state-owned or state-subsidized enterprises. In the spirit of America’s conviction that its institutions and free-market principles should apply everywhere, there are even stipulations which have pushed the likes of Vietnam to allow for non-governmental labor unions for the first time.
Increased Trade as a Pacifying Force?
There remains the question of whether the deal, without China, can achieve America’s objectives while positively impacting the Asia-Pacific region. The Diplomat recently put forward the case that in boosting the economic growth of China’s neighbors, a stronger regional economy will, without guaranteeing peace, “create conditions that make conflict less appealing… China understands that America is more inclined to intervene in situations that threaten its growing trade interests.”
To lend credence to this position is to overestimate the effects of TPP and to misunderstand China’s complex culture and identity. When assessing the value China places upon maintaining its position and “saving face” vis-á-vis making an economically rational choice, one only needs to be reminded of Chairman Mao’s 1957 declaration: “I’m not afraid of nuclear war. …China has a population of 600 million; even if half of them are killed, there are still 300 million people left. I’m not afraid of anyone.”
TTIP: The Next Super Deal
While TPP still faces ratification, EurActiv well described the implications of its signing in October: “TPP done, eyes now turn to TTIP.” The Transatlantic Trade and Investment Partnership (TTIP) is the second of America’s “super deals” aimed at bolstering world trade, this time with its traditional partner, Europe. Though its supporters preach a strengthened economy and the creation of jobs on both sides of the Atlantic, its adversaries fear the lowering of protection standards and the undermining of democratic institutions by corporate interests. While only time will tell what the economic consequences of TTIP will be, it is no less an assertive foreign policy implement than its Pacific counterpart.
While the road to ratification is likely to be long and bumpy, TTIP resembles TPP in many respects. It too has more than purely economic implications. This time, however, it is not so much China as Russia which stands to be affected by the deal. The European bloc remains Russia’s biggest trading partner, and as noted by Vicente Lopez-Ibor Mayor, former commissioner of the National Energy Commission of Spain, in a 2014 Atlantic Council article, TTIP could “grant Europe greater leverage in energy negotiations with Russia, diversify Europe’s energy supply, and help it to begin weaning off its Russian gas addiction.”
Maintaining Western Standards and Reaffirming the Transatlantic Relationship
While it will take some time before either of these deals near implementation, America stands to find itself at the center of a massive global free trade zone covering about 60% of the world’s GDP. Such a constellation led by the United States would not only reinforce an increasingly vulnerable Bretton-Woods system, but would also represent an overt counterpoise to China’s recent flirtations with the introduction of its own global trading rules, namely its loans in Africa, the founding of the Asian Investment Infrastructure Bank (AIIB) in 2015 and ongoing maneuvers to revive a trans-Asia silk road.
TTIP will not in itself contain any clauses on military issues. TTIP would therefore not replace NATO but, as American Trade Representative Michael Froman advanced, it “would complement one of the greatest alliances of all time with an equally compelling economic relationship.” In much the same way, it has been argued that increased economic involvement in the Asia-Pacific region could make American military interventions on behalf of its allies there more plausible, a parallel argument could be made in the case of Europe. While this is also likely to be an overestimation of what the lowering of trade tariffs will accomplish, that does not negate the comfort it may bring to America’s European allies. As Edward Lucas of the Centre for Transatlantic Relations recognized, these allies have become increasingly worried that NATO might not come to their aid, as the shadow of Russian-backed separatism in Ukraine looms large over the alliance’s eastern frontiers.
While TPP and TTIP undoubtedly have economic legitimacy, they should be understood within the context of the contemporary global order. Their inception has the potential to reaffirm trans-Pacific/Atlantic ties and to deepen rivalries. They have been cast as foreign policy tools and will constitute a powerful addition to America’s geopolitical toolkit. Only as their details continue to emerge will it become clear how blunt these instruments are.