The Guardian view on the Trans-Pacific Partnership: not a good deal
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Version 0 of 1. In tone and substance Donald Trump is a divider, not a unifier. His grating bombast at last Friday’s inauguration presaged a few days of overbearing, preening speeches that have alienated sceptics and enthralled supporters. The new US president is intent on pressing the buttons of his electoral base by peddling crude nationalism. He’s not building bridges, but walls. Such sentiments lace President Trump’s pronouncements on trade in which he – and his advisers – appear to hold pungent views, infused with a distinctly late-19th-century scent of economic nationalist politics. It’s often forgotten that the Republican party discarded what remained of its anti-slavery and free-trade roots to become the party of protectionism in the 1880s. But not by Mr Trump. Like his predecessors of yesteryear the president views the world as being at perpetual war – whether economically with other nations or militarily with “radical Islam” – and espouses a doctrine that combines protectionism with coercive foreign market expansion to secure regionalised economic integration. Yet on one narrow issue, President Trump is right. Withdrawing the United States from the 12-nation Trans-Pacific Partnership is a good move. Conventional thinking is that trade allows nations to gain by doing what they do best and importing the rest. However, recent decades of US-championed globalisation have left a country with record weak productivity and ballooning wealth inequalities, with one in eight working-age men outside the labour force. President Trump stokes and taps this rage at the machine. Barack Obama did make efforts to make elements of trade justice – such as fairer labour and environmental rights – part of the Asian trade pact. But this was undone in the TPP by giving the right to corporates to sue often poorly financed governments in private international tribunals when they believe government regulations, including environmental ones, contravene the pact’s terms. Trade agreements must balance the needs of an increasingly interconnected economy with the protection of communities, worker standards and the environment. Instead, we have seen trade rules, opaquely devised in a context where those in industry have a bigger voice than consumers and workers, become rigged in favour of foreign investors. The result is a justifiable suspicion that corporate profits globally have increased at the expense of employees. President Trump, whose first act in office was to gut funding for healthcare coverage for 32 million Americans, is unlikely to reverse this trend. Neither will he be upfront about trade’s downsides. Instead, he’s looking to use the TPP’s dissolution to refashion America’s geopolitical role: no longer a guarantor of a rules-based system but a self-serving seeker of regionalised, closed-door relationships where it would be the dominant player. This may suit others. China could step into the void left in Asia, though the lack of rule of law within its own borders makes that a hard sell. What’s missing is understanding what makes for unfair trade: low wages in poor countries that do not reflect low productivity but stem from rights violations; currency manipulation and trade imbalances by mercantilist rivals; and job losses devastating communities. Mr Trump won’t tackle any of these issues – but he will use the arguments to make the world worse than it already is. |