Tales of the South Pacific
I was underwhelmed about President Obama’s announcement in November that the United States would think about joining the Trans Pacific Partnership (TPP), a free trade agreement that counts Singapore, Brunei, Chile and New Zealand as current members. But a paper released in December (I’m catching up on my reading) by the American Enterprise Institute (not known as friends of the President) has me rethinking my stance. The authors of “Tales of the South Pacific“, Claude Barfield and Philip Levy, make a good case that joining and growing TPP may be the best option for the United States to build trade across the Pacific. They acknowledge the somnolent reactions that I and others had: “At first blush, the TPP is remarkable mostly for its small size and its redundancy with existing U.S. agreements” – exactly the points I made in my earlier post.
Barfield and Levy cogently review the alphabet soup of trade agreements in Asia and across the Pacific, worthwhile reading for those like me who can’t keep it all straight. They then look at the available options for the United States. Bilateral FTAs, while they can be helpful, require that others wish to negotiate and that the Congress is in a mood to approve them (neither is a given). We have three negotiated FTAs (with Panama, Colombia and South Korea) that have been hung up in Washington for years, two stillborn negotiations (Thailand and Malaysia) that might be re-opened, and for anything else we start from scratch. Another option is to push for a single FTA for the entire region, perhaps the long-talked about but never started Free Trade Area of the Asia-Pacific (FTAAP), which might take as long or longer than the Doha Round to complete.
Current TPP members (green), those talking about it (orange)
The Trans Pacific Partnership, they argue, is the best option. TPP is a comprehensive agreement, covering most areas of trade policy, not just customs duties. It is open to new members whenever they are ready to join. And it has the added benefit, though Barfield and Levy don’t say this, that it is not something created or proposed by the United States. I spent enough time in Asia during the old “Asian values” debate to realize that it is an asset for something not to be proposed by the superpower. This applies to recent trade proposals by China and Japan, too. If a superpower proposes it, it is dead meat from the beginning.
OK, I still have my doubts. So do the authors: “The TPP could shape the debate about the future U.S. role in Asia and offer prospects for a new bottom-up approach to striking global trade deals. The agreement could be significant for an administration with a strategic vision for Asia and sufficient enthusiasm for trade as a vehicle to achieve that vision. Without such enthusiasm, though, the TPP is just a mostly redundant agreement among a small group of small nations.“ With the same caveat, I can get behind this. Let’s go for TPP.
