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Lack of U.S. vision hurts TPP

by Michael Sutton

Special To The Japan Times

In 2009 during Golden Week, I visited the small town of Hino on the edge of Lake Biwa in Shiga Prefecture. The people of Hino put on a splendid festival rich in local traditions. There were a number of elaborately decorated festival floats at the entrance to the local shrine. The atmosphere was what you expect from local festivals — drums and flutes, ritual and protocol, families chatting, everyone in festival garments, sake and local delicacies.

It was surprising, therefore, that U.S. President Barack Obama was also in attendance. Obama had assumed the most honorable place in a festival — atop one of the festival floats surrounded by signs that read “Yes We Can!”

The more familiar heroes from ancient myth and legend sat politely on their respective floats, but they must have just as puzzled as I was. The people of Hino had crafted, quite respectfully, a life-sized and lifelike Obama to show their enthusiasm for the president as he assumed his first term in office.

Obama was a breath of fresh air to the stifling staleness of the Bush years. It wasn’t just the invasion of Iraq, or the greed-infused global financial crisis, but the lost opportunities.

Bush was a passive reactionary and didn’t lead unless pushed. His legacy was a broken economy and a divided nation, social and political chaos in the Middle East, deep distrust of the United States and its ambitions and the absence of humility that is normally a byproduct of global power and influence.

Many presidents prior to Bush viewed their tenure as a unique gift, an opportunity to actively and positively transform the world through the U.S.

Obama is now in his second term and is actively searching for legacies. This is not surprising because it has been difficult for him to escape the specters of the past — the consequences of the global financial crisis and deep-rooted cynicism toward Washington.

In this context, Obama’s controversial health care reforms were promoted to bring compassion to many marginalized in a free market health care system.

Due to the many specters of the past, Obama cannot afford to be a visionary and must be a consolidating president. For example, the “war on terror” continued behind the scenes, culminating in the death of Osama bin Laden.

The same has been true of trade policy. Bush did little to advance U.S. trade interests globally, aside from the negotiation of a few trade agreements. He was preoccupied by war and basked in the economic benefits of what was called in those days the “peaceful rise” of China. Bush however ignored the political and economic consequences of failing to revitalise talks in the WTO and failed to prepare the U.S. for some of the political and strategic consequences of a more confident and ambitious China.

Obama’s trade policy in the region centers on the so-called Trans-Pacific Partnership. The TPP is not an American proposal. If Obama had proposed it, it would have never been supported.

Since the late 1980s, U.S. overtures to create a Pacific free trade agreement were resisted in favor of global trade talks. Asia countries were fearful of U.S. ambitions in 1994 and in response supported what was called “open regionalism” which basically meant “back off America!” The TPP began at the end of the century with small countries such as Singapore, New Zealand and Chile, which felt that the world trading system had collapsed and the only recourse for economic security and protection from the vagaries of global uncertainty was to find refuge in a free trade agreement.

Since then, more and more countries have joined the negotiations, most notably the U.S. and more recently Japan.

U.S. interest in the TPP is usually presented as proof of leadership — the desire to lead the region toward the free trade nirvana. The reality is quite different. The TPP is proof of how far the U.S. has fallen, that the U.S. can only join a negotiation but not initiate it. The authors of the TPP are the smallest in the region.

Domestically, Obama faces a number of hurdles. To negotiate and ratify the TPP, Obama needs to appease the protectionists in the U.S. agricultural sector by allowing the settlement of the controversial U.S. Farm Bill currently being negotiated by Congress. Obama also has no “fast track” negotiating authority to negotiate free trade agreements on behalf of Congress. It is not essential but trade Congressional approval will be more difficult especially if China or India join the TPP.

Insisting that Japan liberalize agricultural trade barriers for the sake of an opaque “strategic” future is hollow and has no place in trade negotiations based on the principle of reciprocity. U.S. negotiators will insist that “free trade” in the TPP should not deviate in the slightest from U.S. priorities so it will be good for U.S. jobs, the U.S. economy and for Obama.

Other countries have the right to insist that the TPP also reflect their priorities. Curiously, TPP participants expressed at the recent APEC summit an intention to wrap up negotiations by the end of 2013. This suggests that some want all the TPP rules set in stone just in case China expresses an interest to join in the future.

If Obama is really legacy-shopping, then he should widen his gaze and look to the global stage. As we learned from Bush, it is relatively easy to start a war, but it is far more difficult to initiate and lead trade negotiations. That’s where real leadership is made.

The TPP should be open to anyone who wants to join. By all means continue with it, but reach out to China and India, look to the European Union and the developing world and revisit the problems of the World Trade Organization.

There is no need to rush the TPP. Many of the issues need careful reflection and deliberation. No agreement is far better than a bad agreement.

Obama also presented himself as the defender of the poor and the vulnerable in his health care reforms. These reforms did not celebrate the free market or “free trade” — quite the opposite. But, vulnerability does not stop at the U.S. border. One is not worthy of compassion simply because one is an American citizen. In the age of American decline, true leadership needs to go beyond the rhetoric of free trade toward seeking a more compassionate and inclusive world trading system.

Dr. Michael Sutton is a visiting fellow to the WTO Research Center in Tokyo.

  • zer0_0zor0

    The criticism is good, but doesn’t go quite far enough.

    These regional scenarios detract from hammering out the difficult issues in the broader context of the WTO and GATT.

    They amount to a waste of public resources and basically present an opportunity for otherwise useless political operatives to make it look like they have achieved some sort of gain in the short term, while the long term is neglected and the problems swept under the rug. And there is a domino effect in that one regional pact leads to another region negotiating a separate pact in competition.

    Maybe I’m too cynical and a more realistic assessment would see these pacts as producing an incremental form of progress that is better than nothing and might enable countries to deal with sensitive political issues on the domestic front, like the farm subsidies bill mentioned by the author? Wait a minute, didn’t he say Obama was going to have to sign off on that in order to push the TPP through?

    I’m confused.