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Judge TPP on Reality of the Age…but Cautiously

— April 20, 2015

As former President, George W. Bush once infamously stated, “fool me once, shame on you; fool me twice…well… you can’t get fooled again.” That is how I feel when I analyze the Trans-Pacific Partnership (TPP), an enormously entangling trade agreement between several North American and Asian nations that account for 40 percent of the world’s economic output. On Thursday, April 16th, key legislators gave President Obama “Fast-Track” Trade Promotion Authority (TPA), giving him the right to negotiate the terms of the agreement on behalf of the U.S. TPA also allows Congress to pass the terms of the finalized agreement on an up-or-down vote with no amendments. It is unclear at the moment, whether or not the agreement would pass a congressional vote, but as sides prepare to do battle, the fight will certainly will be intense. As full disclosure, most of my academic career focused on these sorts of agreements. The TPP fight takes me back to college, where my undergraduate thesis was about the effects of the South American trade pact, MERCOSUR, on modernizing its member countries, and then as a grad student, where I helped research and write a seminal case study regarding the fight to fast-track normalized trade relations with China in 1999.

Despite my expertise on the subject though, the past week’s emergence of TPP as a national issue blindsided me, and as with many critics, the secretive nature of these negotiations has raised alarm bells. I had mildly supported trade agreements like NAFTA, GATT, APEC, etc… during my college days, but upon 15 years of reflection, I now strongly feel that they have been used primarily to devalue the U.S. labor market much more than they have brought increased benefit to U.S. citizens. The opposite side of that coin, however, is why I am willing to make the case that TPP could be an improvement over the current state of the global economic landscape. While filled with many of the things that have turned labor, environmental, and human rights groups against “free trade,” TPP offers some degree of evolution from the trade pacts of the previous generation.

When both the Cato Institute and Public Citizen are against something, you know that it isn’t going to be easy to defend it. At the same time, most of their criticisms are based on the results of the prior deals, especially the similar 1994 NAFTA agreement. Unlike many of the prior trade pacts, however, TPP appears to have much more enforceable mechanisms in place, especially with regards to environmental and labor standards. Under current agreements, these issues that have been primarily dealt with by NGO’s and advocacy groups who can raise awareness, but cannot enforce disciplinary measures. Using a supranational dispute resolution procedure similar to that of the World Trade Organization (WTO), the TPP should have the ability to crack down on labor and environmental violations in tangible manners.

Perhaps most importantly, and as the case that President Obama has tried to make to Congress and other opponents, TPP gives the U.S. a larger say in Asian-Pacific economic strategy, therefore preventing regional powerhouse, China from “writing the rules of trade” in the 21st century. I strongly agree with this point based on my 1999 case-study. While the rhetoric appeared to be beneficial for both countries at the time, China has gained much more than the U.S. from the deal. This bill gives the U.S. a chance to regain some of the leverage it gave up in order to help keep China engaged in the modern world, and away from a more threatening adversarial relationship. Even with a moderate level of disputes, the U.S. and China are now much more allies than they are enemies, and that has been a prime result of normalized trade. The TPP agreement will likely strengthen the ties between the two countries economically and diplomatically.

This article merely serves as a summary analysis of TPP’s possible benefits. The vast amount of detail in the agreement, and its long-reaching tentacles will take months, if not years to fully grasp. Legal Reader will be following the issue in depth moving forward, both from a legal and from a policy perspective. But, before the literature on the subject regarding the massive popular objection to another trade pact overwhelms the case arguing its merits, I want to remind readers of the world we currently live in, with the current global imbalance of trade, the lack of enforceable mechanisms in current trade agreements, as well as the establishment of China as a permanent economic powerhouse. As White House blogger Jeffery Zients writes, “Here’s the bottom line: 95 percent of the world’s consumers live outside of our borders. We can’t afford to close ourselves off from those opportunities.” So with both skeptical eyes wide open, I aim to at least have the wisdom of the former president. While I see the potential for the TPP to be a realistic improvement to the outdated and unbalanced trade agreements of my college days, there is definitely more than shame at stake in being fooled again.



New York Times – Jonathan Weisman

Vox – Timothy B. Lee

White House Blog – Jeffery Zients

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