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Bucknell Institute for Public Policy: The death of the Trans-Pacific Partnership

Zach Krivine, Contributing Writer

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Trade was one of the hallmark issues of President Donald Trump’s ascension to the White House. From his candidacy announcement, to the many primary and general election debates, to his inaugural address, Trump continually lamented the so-called “theft” of our jobs by overseas nations as a result of poorly negotiated trade deals. If one was forced to imagine what “Making America Great Again” might look like, one need only visit Detroit or Youngstown, Ohio circa the 1950s and 1960s, when the United States was the world’s industrial powerhouse. Clearly, it is Trump’s desire to once again bring about these economic conditions for much of the United States.

On Jan. 23, Trump took what he sees as the first step to realizing this vision for America by signing an executive order that officially withdrew the United States from the Trans-Pacific Partnership (TPP). This does not come as a surprise; Trump repeatedly stated along the campaign trail that such a deal was bad for the United States as it did not favor the American worker. But is this the case? The answer is no. It is of course infinitely more complicated than our current Commander in Chief understands it. On a number of levels, he made a grave mistake.

For one, the narrative of trade deals causing harm to American labor markets is misconceived. Consider China, a frequent target of the president. Economists estimate that more than five million jobs have been lost in our manufacturing sector, and the Economic Policy Institute cites 2.4 million of these jobs were lost or displaced by trade with China between 2001 and 2013. The loss of the remaining jobs can be attributed to technological advancements. In reality, trade has helped sustain much of the American economy, as the export of goods and services has supported an estimated 12.3 million American jobs as of June 2016.

Withdrawal from the TPP will also prove to be a global strategic mistake. A perusal of the 12 nations included in the TPP yields a curious finding; the world’s second largest economy and the United States’ largest trading partner, the aforementioned China, is not one of these nations. This is of course on purpose. As its economy continues to grow, albeit at a smaller rate in recent years, China has made aggressive moves to attain greater influence throughout Southeast Asia via projects such as the Asian Infrastructure Investment Bank, which many view as the Chinese answer to the International Monetary Fund and the World Bank. The TPP allows the United States to foster relationships with Southeast Asian countries—relationships that are crucial if we want to maintain our influence in the world, which we do.

Trump may not realize it, but the TPP does not fit into his convenient narrative of trade deals as lopsidedly favoring the nation with which we are doing business. One of the cornerstones of the TPP was that it would not only open more markets to U.S. consumers and goods, but also create a more uniform set of rules for doing business across these countries.

On the issue of copyright and intellectual property theft, for example, provisions in the TPP would allow U.S. businesses to file complaints and/or lawsuits against those in participating countries. This aims to crack down on everything from fake North Face jackets to patented technologies. There were even myriad environmental provisions to ensure that the continued industrialization of these economies was done so with their ecosystems in mind.

However, the decision has been made. The United States has withdrawn from the TPP, and any American participation in sweeping trade deals like this is unlikely, at least for the next four years. But who are the real winners from free trade? The United States has of course lost many manufacturing jobs overseas, and American multi-nationals have doubtlessly cashed in due to lower labor costs in these nations.

But what about the fact that free trade has lowered the cost of living around the world, primarily for the poor? What about the fact that the transfer of jobs to developing nations has lifted tens of millions around the world out of poverty? There is also the moral aspect of free trade that our newly-minted president has not considered.

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Bucknell Institute for Public Policy: The death of the Trans-Pacific Partnership