In his robust defense this week of the Trans-Pacific Partnership, President Barack Obama has reason on his side. But allaying anxiety, economic or otherwise, requires not so much reason as reassurance. ADVERTISING In his robust defense this week of the
In his robust defense this week of the Trans-Pacific Partnership, President Barack Obama has reason on his side. But allaying anxiety, economic or otherwise, requires not so much reason as reassurance.
The challenge for Obama and other supporters of the deal is to overcome the country’s anti-trade mood without reopening the complex and hard-fought agreement, which would surely collapse in the attempt.
For starters, he could build on his budget’s “wage insurance” proposal to create a more sophisticated program to deal with trade’s economic dislocations. He should also put forward a detailed plan for how U.S. agencies will enforce the TPP’s groundbreaking provisions on labor rights and the environment.
To reassure those worried by other controversial provisions — notably the mechanism for resolving fights between foreign investors and states — the U.S. should ask its fellow TPP signers to agree to review the pact’s provisions after three years, to make sure that they are working as intended.
Of course, it’s also worth reiterating the case for this deal in particular — and free trade in general. The U.S. will be the TPP’s largest economic beneficiary in absolute terms. Its provisions have the potential to advance long-standing progressive goals on labor and the environment, dismantle a thicket of protectionist regulations, and reignite global trade liberalization largely on U.S. terms. The deal will also reinforce U.S. strategic interests in the world’s most dynamic region.
Moreover, the cost of walking away from the TPP will be measured in more than economic terms. As Singapore’s visiting Prime Minister Lee Hsien Loong said this week, the TPP is a test of U.S. “credibility and seriousness of purpose.” In the face of growing Chinese assertiveness, a U.S. failure to approve the pact will undermine not only its regional alliances but its ability to set the terms of global trade.
One of the core tenets of economics is that free trade makes economies more efficient by increasing competition and thus innovation; consumers benefit by gaining access to better goods at lower prices.
The impact of any single trade deal on employment is hard to gauge, but in the long run, workers do better in a more productive and competitive economy.
Yet such benefits have been overshadowed by campaign rhetoric that seeks to exploit economic insecurity. While Donald Trump promises to protect workers by building walls and starting trade wars, Hillary Clinton has abjured a trade deal she once supported.
Political expedience is a powerful force, and it would be naive to argue that free trade is a popular issue this year. But at least one of those candidates knows better.
— Bloomberg View
