The US Bidin’ its Time on the Trans-Pacific Partnership

In the current geopolitical scenario, the importance of bilateral, regional, and international alliances is indisputable. Alliances need not always be conventional military pacts but may also take the shape of trade deals, agreements, and summits. Without these, neither the US nor China stands any chance at contesting for global hegemony. The Trans-Pacific Partnership (TPP) is one such integral alliance that the US wouldn’t want to estrange itself from – in checking China’s attempt at becoming the global hegemon. The ubiquity of such treaties, trade deals, agreements and summits, forces states to prioritise ones which serve their interests the best over the rest. Surprisingly, the TPP despite its features, didn’t fall under the Trump administration’s list of best alliances for America. This article looks closely at the TPP and highlights its importance as a key US alliance. It also glances over the US policy decisions that led to the making and breaking of the TPP. Lastly, it provides a succinct commentary on the TPP’s strategic role and its increased importance in lieu of the latest developments in Australia-China relations and the election of a Democrat administration to the White House.

Economics of Benefit

The Trans-Pacific Partnership was the largest regional trade accord in history and included the US along with 11 other Pacific Rim countries. These included Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The group accounted for over 40% of world GDP and about one-third of global trade. In over thirty chapters, this comprehensive deal covered a variety of topics such as tariffs on goods and services, intellectual property rights, labour reforms, environmental standards, e-commerce rules, dispute resolution mechanisms, etc. The goal was to create an integrated economic area with established rules for global trade that would benefit all parties involved. The trade network under the TPP would have been larger than that under NAFTA (currently the biggest FTA in the world). TPP would have been beneficial for all as it would have provided increased access to large Asian markets. Moreover, the positive labour and environmental reforms, protection of intellectual property, reduction of tariffs, and liberalisation of trade services would have led to the establishment and development of integrated supply chains and supported the developing economies in the agreement greatly. The trade would have also benefitted the US as the reduced tariffs and increased market access allow for more cross-border investment, reduction of prices, boost in US exports. The developing markets would’ve been more efficient – increasing surplus and fostering positive growth. As a cherry on the top, TPP had the potential to seriously hurt China’s market share in the Indo-Pacific and tip the scales in the US’ favour. Nevertheless, despite these attractive numbers, the jury was still divided in the US regarding the deal’s usefulness. While the supporters celebrated it as a “boon for all the nations involved”, the opposition said that it was nothing but a give-away deal to business outside the US.

A Prudent Partnership

The deal was negotiated by the Obama administration as a part of their “pivot to Asia” policy to increase the US influence in the Southeast Asian and Pacific region. Signed by all 12 signatories in 2016, TPP was soon caught in the cross-fire in the US presidential elections of 2016. Both the candidates made it a point of their campaign to reject and withdraw from the deal when elected to the White House. Resultantly, under the Trump administration, the US Trade Representative issued a letter to all the signatories stating US’ withdrawal from the TPP. Simultaneously, it stressed upon the US’ commitment to free and fair trade and called on states to engage in bilateral discussions on trade agreements. This was seen as a move under the Trump administration’s “America First” policy. The US did receive some backlash globally over its decision – for not looking at the long-term benefits of the deal which would have led to both US’ and other states’ economic development. Nevertheless, the remaining 11 members, now known as the TPP-11 held up this prudent partnership with the aim of salvaging a pact without the US. Finally, they signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. CPTPP wasn’t much different from the TPP barring amendment of certain clauses that the US had earlier included against the will of a majority of the parties involved.

Not Just Another Trade Deal

The TPP is of great geostrategic importance to the US in Asia. The exclusion of China from the agreement gives the US a golden opportunity to regain its influence in Asia that was severely weakened post 2008, with the rise of the Chinese Wolf Warrior. By having a closer look at the geographic location of the member states of the TPP, its importance becomes far clearer. TPP single-handedly would provide the US access to places closer to the Chinese mainland and important ports in the South China Sea, including the Hainan Naval Base, housing several Chinese nuclear submarines. Moreover, the TPP would also play a key role in setting the trade norms in the region. The establishment of norms in line with the ‘western idea’ of trade and free market could be an invaluable embellishment for the US which would further consolidate its position in the region. Lastly, the deal could also help the US win back the ASEAN nations which have been drifting away from it ever since the 1997 Asian Crisis. The TPP provides enumerable opportunities to stand up to China and reverse its ascendency in the region. It will not be wrong to compare the TPP with an aircraft carrier. It would give the US an important strategic edge and position of power in the region – one which it clearly lacks in contrast to the pro-Chinese fervour amongst most of the neighbouring states.

The recent developments between Australia and China stand testimonial to the fact that China is not willing to lose its control in Asia. Asia plays a key role in China’s path to global dominance and fulfilling its megalomaniac endeavours. For that, China is employing its principle of shā jī xià hóu or kill the chicken to scare the monkey. By taking a very harsh approach to Australia and issuing a very problematic statement with the 14-contentions, China is trying to send a message to the rest of the world to stay in line. This immediately makes an alliance like the TPP, which includes Australia and significant Southeast Asian nations, absolutely necessary to empower those who stand up to China. The winner in this tussle gets to enjoy a mostly unilateral power in the South China Sea and the Indo-Pacific. Maybe, Xi Jinping was wrong when he said the Pacific is big enough to host both the US and China.

Conclusion

The purpose of this article was never to present a solution to the great power conundrum, simply because the situation on-ground changes on a daily basis owing to the dynamic interests of the nations. However, it was to illuminate the central role TPP could play in the US policy in Asia. With the change in leadership at the White House, some shift towards the TPP is surely expected. The Biden-Harris campaign also mentioned their intention to re-enter the TPP after some negotiations, which is better than abandoning it altogether. Clearly, the deal is a win-win for all parties involved on several fronts. It serves economic benefits to both the developed and the developing economies involved. At the same time is also of great strategic (tactical and diplomatic) importance to the US policy. In conclusion, it will be very interesting to see how much time will the Biden administration bide, before taking the TPP seriously.

Deepanshu Singal is an undergraduate student at Ashoka University with a keen interest in Economics and International Relations.

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