The United States badly overplayed its hand in one of the most important trade agreements, which did face bipartisan criticism but mostly from Donald Trump and the GOP, that never happened. The Trans-Pacific Partnership (TPP) accord was proposed among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States, signed in February in 2016 and repudiated by Donald Trump in January of 2017. It promptly fell apart, but the remaining TPP countries then negotiated a new trade agreement called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which incorporates most of the provisions of the TPP and which entered into force on December 30, 2018. And obviously excluded the United States.
Those nations that signed the new agreement provided preferential trade terms and obligations among and between themselves. The Trump trade war with China and this new CPTPP signed without the US played a very significant role in slamming our agricultural exports, giving other nations preferential treatment for their agricultural and other exports. Despite some temporary subsidy money to impacted American soybean farmers because of that trade war, they were ultimately locked out, perhaps permanently, from being that major part of China’s import agricultural supply chain.
Make no mistake, I truly mistrust China at almost every level. The original TPP would have benefitted the United States while completely excluding China. The replacement CPTPP benefitted that China by completely excluding the US. To date, the Biden administration’s Pacific Rim trade posture is pretty much a continuation of that of Donald Trump. China is in the mix, whether we like it or not. Now, we are on the outside looking in.
Writing for the November 10th Bloomberg, Philip J. Heijmans presents this overview of Biden’s Asia-Pacific strategy… beyond the confrontation with China over the militarization of the South China Sea (regarding the Spratly build-up) and the saber rattling over Taiwan: “President Biden has pledged to step up U.S. engagement in Asia after years of ceding influence to China, donating tens of millions of COVID vaccine doses and shoring up military commitments. But when it comes to the Pacific region’s economy, he’s stuck in neutral…
“[T]he Biden administration is still struggling to articulate its economic vision for the region nearly five years after Donald Trump withdrew from an 11-nation Pacific trade deal. Although Biden announced [in early November] the U.S. was exploring a new Indo-Pacific economic framework, he gave few details on how it would work.
“China has sought to take advantage, pushing to join agreements once heralded as vehicles the U.S. could use to set rules for the region. In September, China put in a formal request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — the deal Trump abandoned. And last month President Xi Jinping said China would also apply to join a digital economy pact that includes U.S. partners Singapore, Chile and New Zealand.
“‘For the U.S., which is really weakly anchored on the economic side in the region, they are falling behind,’ said Deborah Elms of Asian Trade Center, a Singaporean group with extensive contacts with companies and governments in the region. ‘You have an administration again that is putting ‘America First’ using different language.’
“For China, entry into the CPTPP would help Beijing counter perceptions that it won’t play by the rules after several well-publicized cases of imports being blocked during geopolitical disputes, including with Australia in recent years. Beijing’s leaders also want to block Taiwan from joining the CPTPP and paint the U.S. as an aggressor after it agreed along with the United Kingdom to provide nuclear submarine technology to Australia.
“Biden and Xi are scheduled to hold a virtual summit next week, although no date has been set yet, according to people familiar with the matter. Relations between the world’s biggest economies have quietly improved in recent months even as they compete for influence in Asia and spar on issues such as Taiwan and Beijing’s expanding nuclear arsenal.
“In the meantime, Southeast Asia has become more dependent on China, which accounted for 18% of trade in goods, including electrical machinery and raw materials, for the 10-member Assn. of Southeast Asian Nations in 2019, up from 12% in 2010. The U.S. made up 10% of ASEAN’s trade in 2019, nearly the same as in 2010, according to the latest statistics from the bloc.”
Our unilateral, go-it-alone efforts – from trade agreements to the Afghanistan withdrawal – have gone awry. Our belief that the world would always follow our steps vaporized in the Trump administration. Our credibility, when it comes to honoring treaties, is also at stake. We face many issues that absolutely require cooperation with our foes, especially China, even beyond the November 10th COP26 side agreement between China and the US (focused on reducing methane and coal emissions). The way we continue to impose our vision of “America First” makes us “America last” in the eyes of so many in the world, including some of our traditional allies. Simply put, we look a bit like fools posturing as if we can force others to do our bidding. It’s called “diplomacy.” Repeating what does not and has not worked seems a tad insane.
I’m Peter Dekom, and as the United States continues to wallow in its internal struggles and gridlock-polarization, we need to remember that the rest of the world is watching… and reacting accordingly.
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