12 nations, including Japan and the U.S. have agreed the Trans-Pacific Partnership trade deal (TPP). Commentators will now be picking through the agreement to explore the details of one of the most complicated deals ever negotiated, but in the meantime, a few points stand out.
First and foremost, the TPP undercuts much of the rhetoric we’ve been hearing about the BRICS and the ability of emerging powers to reshape the world system. At its heart, this is an agreement by two status quo powers (the U.S. and Japan) and their closest allies (like Australia and Canada) to sidestep forums like the WTO in which BRICS and other strong minded emerging economies can block deals they don’t like. This, like the parallel effort for an EU-U.S. trade deal, is an elaborate workaround in which the “old” economic powers are taking advantage of their immense markets and fiscal clout to set the rules for the 21st century. If countries like China and Brazil want to get “into” these new clubs, they will have only a limited ability to renegotiate rules that all the existing members have already bought into.
Second, the TPP is a huge win for Japan in its contest with China. China wants to lay down the rules for Asian development and trade, but in this deal Japan has worked with its American and other allies to create a system without Chinese participation.
Third, the Middle East is once again largely absent when the global rules of the road are being written—and that may not be a good thing for anybody in the long run. The existence of deep trade integration between the Pacific Rim and North America isn’t going to make it any easier to promote rapid industrialization and job creation in countries like Egypt, and the Middle East is arguably the part of the world where a failure to generate steady, wealth-creating, job-promoting growth has contributed the most to international instability. Are the Europeans, the Americans, and others really being smart when they develop global economic rules that don’t accommodate the need for some kind of special treatment for a troubled part of the world?
Finally, trade deals like TPP expose the contradictions at the heart of the modern American left. The unions and the left generally will denounce this deal, as they’ve denounced all trade deals for the last generation. They will say that the TPP is a cynical corporate giveaway that creates inequality by facilitating the outsourcing of American jobs. Obviously that rhetoric points to a real problem, and outsourcing, immigration, and automation are indeed eating away at the industrial working class in rich countries like the United States. But, globally, these trade agreements tend to reduce inequality between countries even if they and related developments can promote inequality within some countries. These deals allow desperately poor people in other countries to escape lives of rural poverty, tenant farming, or utter urban destitution for factory jobs. And however poorly paid these jobs may initially be, and however polluting and dangerous the factories may be, they do give the global poor a chance to get a foot on the bottom rung of the economic ladder.
That’s not a problem for nationalist right-wingers. America first isolationists can ignore the plight of poor people overseas in order to protect high-wage union jobs in the United States. One might not agree with the values of America firsters or with the long-term strategic efficacy of their program, but protectionism and nationalism go hand-in-hand. However, that’s not the case with any serious form of leftist, cosmopolitan political thinking, for the essence of the left is its claim to speak for poor people globally. A true global left movement might sacrifice the living standards of American car workers to help Bangladeshis get basic incomes just as easily as the global green movement would be willing to slash living standards in first world countries in order to allow poor people in the developing world to get ahead.
However, this kind of consistent left-wing position, one that prioritizes the needs of poor people overseas to those of the American middle class, is political rat poison in the U.S. And there’s the bind. We will see a lot of rhetorical dodges and fancy footwork, but there is nothing less cosmopolitan and universal than industrial protectionism. Even a flawed trade agreement that helps workers in countries like Vietnam deserves the support of people who seriously care about the global poor.
The new trade agreement faces a difficult ratification process in the United States and in several other countries where it is contentious. Parts of the deal will be controversial, and rightly so. But bringing this agreement this far may ultimately be remembered as the Obama administration’s most significant contribution to American prosperity and to world peace. Certainly, the defeat of this trade deal in Congress would be, if anything, a more crushing blow to the Obama Administration than the defeat of the Iran nuclear deal would have been.