It took seven years to negotiate.
Now, it looks like it is dead in the water.
U.S. President-elect Donald J. Trump has said that, in his first days in office, he will withdraw from the Trans-Pacific Partnership (TPP) and replace it with “fair, bilateral free-trade deals.”
The as-yet-unratified, 12-member economic bloc, which would unite Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam into the world’s largest commercial pact, would account for about 40 percent of global trade, with a combined GDP of $28 trillion.
The deal would lower tariff and nontariff barriers on more than 18,000 internationally traded goods and services, while facilitating commerce on all levels by creating clear-cut and uniform norms and regulations among member countries on matters such as the environment, safety and labor.
It would also provide guarantees for intellectual properties and ease out agricultural and other quotas.
But short of the United States, the Trans-Pacific Partnership (TPP) is a no-go.
As Japanese Prime Minister Shinzo Abe put it: “TPP without the United States is meaningless.”
Although Abe was the first head of state to officially meet with the future U.S. president back in November, he later said that he was confident that he could “build a trusting relationship” with the former reality show star.
He did, however, make no mention of TPP. (That’s Japanese diplo-speak for “ain’t gonna happen.”)
But while Trump — and, for that matter, Hillary Clinton — spent most of their presidential campaigns bashing TPP, dropping out of the pact is potentially one of the worst prospects for U.S. trade and economic growth.
As I said last October (see “Why the United States Needs TPP,” which ran in this space on Oct. 21), despite the nonstop spiel being spouted by protectionist naysayers and anti-globalization fearmongers, passing TPP is not only a positive step for Washington, but a necessary one.
TPP act as a counterbalance against China’s ever-expanding dominance over global trade as supplier of manufactured goods to the world, and it would reaffirm the United States’ role as a major commercial force to be dealt with.
In the last decade, the United States’ international economic clout has been severely eroded as China and India rev their marketing engines and new trade blocs take shape around the world.
Meanwhile, U.S. monetary policy has been stretched to the limit, and fiscal policies are bridled by debt and reluctance to spend.
The United States needs to reignite the spark of trade to fuel economic growth.
And the TPP is precisely the way to get that done.
Rather than eliminating jobs in the United States (and other member nations), TPP would force participating countries to increase workers’ wages and better regulate harmful pollution.
More importantly, it would form a commercial and economic bond between the signatory nations.
The Trans-Pacific Partnership would be a win-win for all its members.
Trump needs to rethink his phobia of trade pacts and get TPP passed.
The economic future of his country — and the rest of the would-be members — hangs in the balance.
Certainly, there are issues of TPP that may need to be tweaked, especially with a new presidential mandate, and bringing in a fresh team of financial and economic specialists to review details of the agreement is a coherent rational and decision.
But preordaining the treaty to be quashed simply on the grounds that it might open the door to possible job losses or increased imports is to ignore its potential merits.
Trump has called TPP a “disaster,” but the real disaster would be for the Trans-Pacific Partnership to be stillborn before it even sees the light of day.
Thérèse Margolis can be reached at [email protected].