A Very Considerate Moment on the TPP

The Something to Consider forum has had two powerful discussions on the Trans Pacific Partnership trade deal that President Obama has fast-track approval for. One has focused on the impact on workers/wages, and the other on foreign policy / US-Pacific relations.

Each has been a model of conversation according to the Considerates' Pledge, but one conversation in particular stood out as user Xsess and other users puzzled out some of the potential misunderstandings behind what's going on with the TPP. 

The summary below comes from the conclusion of the TPP Foreign Policy thread, both to add some clarity to what's going on in the deal and also to show the power of being able to change one's mind as one's understanding of facts changes. This was an inspiring example for a lot of us here at STC and we hope you get a lot out of it, too.

Xsess' Summary

Ok, with a little more research on my end, here's a somewhat more detailed explanation why I changed my position on the TPP, and how this thread influenced it.

My prior position on TPP
That it is generally a bad thing. The negotiations for it were being kept unduly secretive from the public. I had read about "fast track" authority, which would allow the congress a simple up/down vote on whether the TPP in its current form would pass. Additionally, I was under the impression that, even after passing of the TPP, the related negotiation documents would be kept secret from the public for 4 years. This seemed like a terrible lack of transparency.

Additionally, I thought that the parts that were leaking seemed nasty. There were tribunals that would allow multinationals to take sovereign governments to “court” if they pursued policies that had the potential damage investments or profits. IP protection, especially for drug companies, seemed to be egregiously long, and potentially damaging to consumer health at the expense of corporations. To add insult to injury, drafts of the TPP were highly protected even from some US representatives, while corporations were by comparison participating in the negotiating process. The insidious interpretation here is that the public will suffer at large to benefit a small minority [Note: this is largely the "reddit"/"liberal"/"bernie sanders"/"elizabeth warren") interpretation of it. Note also that for the sake of understanding the environment that might influence/bias my own opinion: I currently live in Berkeley California).

How this post encouraged me to reconsider my position

  • rekkenmark pointed out, contrary to my previously held thought that turned out to be incorrect, that only the negotiating documents are kept secret for 4 years after passage. Not the terms of the agreement itself. You may think: this was a pretty big slip up on my part to miss this detail. And you would be correct. It is an example of how a misunderstanding of even a tiny detail in policy procedure can lead to a gross misinterpretation of the purposes of that policy. This points to the usefulness of a purposefully emotionless forum like this one.
  • When rekkenmark made me aware of this, I became alarmed that I had missed such an important distinction about this debate led.  This led me to realize that plenty of others probably had been as well. I then became worried that much of the news I had been reading about it may be from sources resulting in an effective echo chamber. I then began to doubt the strength of my prior position, and decided that I really had to start from scratch, and question all my other prior assumptions as well.
  • In addition to questioning my prior assumptions, I was turned onto a new way to interpret the framework in which to even think about the agreement. Previously, I had thought of it primarily from an economic perspective, which is consistent with a lot American media discussion (even non-mainstream sources). However, in the past 10 months or so, I've taken a greater interest in foreign policy, and a major area of interest/research is how economic policy can influence world events to benefit another country while forsaking military conflict. This led me to contemplate the TPP not only from a domestic economic perspective (with a focus on jobs and economic competitiveness), but also from the perspective of "grand strategy," or global security in a world with a new rising superpower.
  • With this in mind, I started to look for sources that discussed both: TPP as it relates to foreign policy and maintaining security in the pacific & with China, and global/domestic economic benefits. I figured a good place to start would be FP papers/articles that look at the relationship between trade and security, and the effects of other recent trade agreements such as NAFTA.

What I found

  • The regional order of Southeast Asia is not analogous to that of Europe. It is much more like the balance of power system that dominated much of 19th century Europe, whereas Europe+America make up another regional order structured by shared ideology. An example Kissinger uses is the European order structured by Metternich after the Napoleonic wars. The Quadruple Alliance (GB + Prussia + Russia + Austria), in the west kept France in check by balancing it's relatively superior (at the time) forces. The Holy Alliance (Prussia + Russia + Austria), in the east, maintained stability and restrained domestic uprisings with the shared ideology of "legitimacy," or the right of the monarchs to rule and a general preference to conservative governments. SE Asia more closely resembles the Quadruple Alliance, rather than the Holy Alliance, and therefore, requires a different policy than that crafted with western allies (such as Europe).  Without a shared ideology, Asian countries (likely excluding Japan) will be more inclined to shift relationships from the West to China, or against one another, compared to our European allies.
  • Some sort of world order that incorporates China's rise to power is necessary. Part of finding that solution will require re-engaging with that part of the world, preferably in a non-military way. The TTP is seen by many as a means to establish a US presence in a part of the world that has recently lost its attention (due to the middle east), and for which China has been seen to be pushing out into whenever afforded the space. This is NOT to say that the goal of the TPP should be containment, since China was invited to join in the trade talks. Rather, it provides a way for the US to show leadership in a part of the world where each state still holds a swing vote.
  • China, however, declined to participate in the TPP due to Western insistence on human rights protections, which China generally sees as a Western excuse to meddle in its domestic affairs (see: Opium wars up through US-China Entante in the 1970's. Kissinger's "On China" provides a great overview of this history.)
  • NAFTA had outcomes that are difficult to parse and therefore hard to fully understand the causal relationships with prior events. The "reddit" perspective is: NAFTA incontrovertibly shipped jobs overseas, was bad for the average American, and gave corporations more power than they had. It's not obvious that this is correct. While some claim that unemployment may have increased slightly in the US, there was actually only a moderate increase, that could have either been non-structural unemployment or simply attributable to other economic factors.
  • Additionally, economic gains to the US due to trade were slight, since at the time net exports from Canada and Mexico made up a very small % of total US GDP. This made me doubt some of the sensationalist "reddit" style commentary on how the TPP would destroy the US job market.

·         While cash outflows to both Mexico and Canada increased, and imports from these countries to the US also increased, net imports didn't increase that much, since US exports also increased. Further, a large percentage of imports from both Mexico and Canada were found to have a US origin.

·         While net exports didn't change that much, foreign direct investment did. NAFTA is believed to have led to a substantial increase in US direct investment in both Mexico and Canada. This makes those economies more dependent on a strong relationship with us than with another major power, and seemed to lend more credence to the "grand strategy" framework.

The source for most of this information can be found here, here, and here.

  • Despite my incorrect prior assumption that the TPP process was unduly secretive, there are nonetheless some legitimate contentions about secrecy surrounding the TPP. They just happened to be different than the ones that I thought were correct (which weren't).
  • "Trade Promotion Authority" or "Fast Pass" isn't some new, wily congressional tactic. It's been used for prior trade agreements - such as NAFTA - as a way to force an up/down vote on a potential agreement. This is not to "circumvent democracy," but rather to eliminate that the threat of a congressional mangling that could scare other parties away from participating in the negotiations in the first place. This "one-text" approach is a tactic described in the popular book "Getting to Yes", and with a better understanding of its purpose seems less egregious.
  • Multi-national systems - like the much despised tribunals in the TPP - are normal in most trade agreements. The point is to ensure that everyone is playing by the rules they agreed on, and sovereign governments face a penalty for broaching those rules. That does not mean that all conflict resolution systems are created equal. 
  • Provisions in the TPP would actually decrease tariffs on US exports to other TPP countries, which could provide for growth in the US domestic export industry and create new jobs.

My current position on TPP
It is an imperfect agreement, but a net positive one. Unfortunately, this is usually the result of an agreement with multiple parties participating: an agreement that sort of accomplishes the purpose, but leaves most parties somewhat unsatisfied.

That said, a lot of the terms around medical IP still seem draconian, and the tribunals do still seem to step on the toes of national sovereignty, which isn’t exactly a good thing. At the same time, we can't afford to lose our leadership position in the Pacific while a rising Pacific Power grows and potentially acquires the power to challenge the global order that’s largely maintained peace and eliminated international conflict for decades.

Currently, many pacific countries still lean our way, and together they present a formidable balance to China's strength. However, if the wrong consortium of countries begins to creep towards the Chinese economic system, the risk of a conflict will increase. Japan would see itself at greater risk, increase military spending (which it is already doing), and let nationalist fervor lead it to protective war rhetoric. China may, based on its history of invasion by Japan, see this rhetoric as representing the true will of Japanese citizens, and therefore a threat. Japan would still have the US alliance, but how willing would the US really be to provide material military support in a conflict with China? This is the 800 pound gorilla in the room in the Asia Pacific-West story.

It is much better to build a new order with China not as a result of military force, but with a coalition of countries that derive benefit from a liberal economic system. Over time, these countries may become more progressive societies, that could join the US+Europe order of shared ideologies. Until then we need to provide them with economic benefits to maintain our presence in that part of the world.

This is not to say that China should be "contained," but that multi-lateral agreements like this are frequently effective, non-violent ways to move the world from one global order to another. History shows us that disintegration of regional or global orders are usually accompanied by unimaginable violence and chaos (such as the middle east now, the communist revolutions, or the boxer rebellion in China). China's growth makes the need for a new world order obvious to anyone paying attention, and since this is the time we find ourselves in, we need to do our best to find a way to incorporate it into a global system that's as peaceful as possible. I believe that the TPP would be better if China were a member. But the TPP does not explicitly exclude China.  China opted out. The TPP is, however, a way to engage China’s neighbors in a way that encourages regional stability and interdependence with the west, thereby decreasing the chance of conflict.

This, to me, seems like a net positive. I hope I've explained my new position clearly, but if I haven't, feel free to ask follow ups.