To TPP or Not to TPP: That Is the Question
July 27, 2021
The Biden-Harris administration continues to wrestle not only with the ghost of the Trans-Pacific Partnership (TPP) but with its reincarnation in the form of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The TPP was not originally an American idea. It began with New Zealand and several other countries in the region during the George W. Bush administration. The United States was invited to join the negotiations, and the Obama administration eventually decided to do so, after far more agonizing than the decision deserved or needed.
For Obama, the point was never about improved market access. Of course it would be nice to sell Japan more pork, but the real reason to join was to demonstrate the United States’ commitment to the Pacific region and its determination to maintain an economic presence there. U.S. policy since the end of World War II has been to prevent single power dominance in the Pacific, and simply being there—economically, militarily, and diplomatically—has been an essential part of its strategy. For Southeast Asian nations in particular, long used to be being bullied by China, the U.S. presence is both comforting and necessary to allow them to avoid falling entirely into China’s orbit.
President Trump’s decision to abandon TPP and replace it with nothing effectively torpedoed that strategy for the past four years, and it now falls to President Biden to find a way to convince nervous countries in the region that the United States is not abandoning them at the very moment when China is flexing its muscles.
The obvious answer, which Biden’s advisers know perfectly well, is to return to TPP or CPTPP. (There are differences, but for today’s purposes I’ll treat them as the same.) Unfortunately, those same advisers, mostly veterans of the Obama administration, like the president himself, remember TPP as a toxic issue among Democrats and have no desire to reopen old wounds.
There they make the mistake of fighting the last war instead of the next one, something we Americans are good at. There has been little polling on this issue over the past four years, but my sense is that, while opposition remains, it has receded significantly because of the far more serious challenge China presents today than it did five years ago. The bottom has fallen out of Americans’ support for China—73 percent view it unfavorably —and there is a better appreciation of the need for a strong U.S. presence in the Pacific. In other words, Obama had it right, and most people are coming to understand that.
Rather than fight that good fight, however, the administration is searching for alternatives that allow them to have their cake and eat it too—restore the U.S. presence in Asia without a messy domestic political battle. The alternative they appear to be gravitating toward is proposing a regional digital trade agreement. That would be a mistake for several reasons.
First, while there is nothing wrong in theory with a digital trade agreement in Asia, or anywhere else for that matter, it is a distant plan B to the far more comprehensive strategy of joining CPTPP. Digital trade is growing rapidly, but it is still only part of our overall economic relationship.
More important, it may ironically be more difficult to achieve than joining CPTPP. While China was initially suspicious of the latter (when it was TPP), it is now openly talking about joining it. That may or may not ever happen, but it makes it hard to characterize the agreement as anti-China or aimed at China, and U.S. participation in it would not be viewed as attacking China. A U.S.-led digital trade agreement, however, from which China will certainly be excluded, can only be construed as an effort to isolate China. That would force Asian nations to do exactly what the Biden-Harris administration has said it would not do—make them choose—and in that situation, most will decline to do so. We might pick off a country or two, but a regional agreement is very unlikely. That suggests that while joining CPTPP might be controversial in the United States, pursuing a digital trade agreement would be controversial in Asia and is not likely to succeed.
And, of course, there is also the issue of now-expired trade promotion authority. While an agreement technically would not need to be submitted to Congress if it did not require any changes in U.S. law, members of Congress in both parties were not happy at the Trump administration’s use of that loophole, and if the Biden administration employed it, it would seriously damage its relationship with Congress.
The better path, fraught though it may be, is to go back to plan A and negotiate membership in CPTPP. Fortunately, there is a time-tested Democratic strategy for doing that, used by Clinton on the North American Free Trade Agreement, Obama on the U.S.-Korea Free Trade Agreement, and Pelosi on the U.S.-Mexico Canada Agreement: declare the existing agreement inadequate (Biden has already done that for TPP); announce you are going to fix it; undertake a negotiation to do so; make some changes; pronounce it fixed; and join.
Of course, it’s not that simple. Changes that the United States wants to make might not be acceptable to the other 11 parties, and the other parties will certainly demand concessions from us. In other words, there would be an actual negotiation, and it would likely take longer than expected. All the more reason to get started now. This is yet another policy that no longer needs to be “under review.”
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
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