war on the rocks

This Asian Leader Just Made the Best Case for TPP and America’s Role in Asia

August 5, 2016

Editor’s Note: This was originally published by The Interpreter, which is published by the Lowy Institute for International Policy, an independent, nonpartisan think tank based in Sydney. War on the Rocks is proud to be publishing articles from The Interpreter weekly.

 

If you want to get a sense of how the fate of the Trans-Pacific Partnership (TPP). is being linked to fundamental questions of U.S. credibility among its allies and security and partners in Asia, watch this press conference with U.S. President Obama and Singapore’s Prime Minister Lee Hsien Loong (who was on a state visit to Washington this week).

The key segment can be watched below. In it, the prime minister makes a powerful case for the trade agreement and America’s larger role in Asia (the transcript of that segment can be found at the bottom).

Lee’s extemporized comments on Japan carry additional weight, because he is in effect talking on behalf of all of the TPP’s Asian partners, who have been led up the negotiating mountain: “Mr Abe came through and decided to commit. Why? Because he wants to help. He wants his country to benefit and to open up its markets… And you don’t do this.”

Here’s the critical bit: If the TPP fails, according to Lee,

[I]t hurts your relationship with Japan, your security agreements with Japan. And the Japanese living in an uncertain world, depending on an American nuclear umbrella, will have to say: on trade, the Americans could not follow through; if it’s life and death, whom do I have to depend upon? It’s an absolutely serious calculation, which will not be said openly, but I have no doubt will be thought.

Frankly, if that doesn’t have impact, nothing will. Regardless of TPP’s economic merits, Obama understands the credibility point. The question is whether enough members of Congress can be persuaded to ratify it by a vote in the lame duck session.

The prospects for this look at best uncertain. This piece of extraordinary commentary by the respected conservative commentator Clyde Prestowitz, calling for the TPP to be “euthanized”; gives a sense of the headwinds now blowing against free trade, and by association U.S, willingness to exert leadership in defense of the liberal international order.

Was Lee exaggerating to make a point? Possibly. But if there is a late outbreak of bipartisan statesmanship and TPP staggers over the line next January, Singapore can take a slice of the credit for reminding an American audience of what’s really at stake. The United States  has put its “reputation on the line.”

 

Dr Euan Graham is Director of the International Security Program at the Lowy Institute. Euan has been a close observer of East Asian security affairs for more than 20 years, in academia, the private sector, and for the British government.

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Transcript (Source: White House)

PRIME MINISTER LEE:  Can I say something about the TPP?  I don’t want to wade into your domestic politics, but looking at it from somebody on the other side of the Pacific who has been intimately involved and, in fact, triggered the whole process, because we started the P4, the little FTA on which the TPP formed, and has become this important initiative.

The economic arguments for the TPP in terms of trade — I think the President has presented them eloquently, what the benefits are to American companies.  It’s a deal which the countries have negotiated, each one providing market access on their side in return for gaining market access on the other side, each one committing to rules in exchange for the other side committing to rules.  It’s a hard-fought bargaining process.  The negotiators spent many trips, many nights, many dawns, and fought it out.

But actually, at the end of it, everybody must decide, is it a plus or a minus for them.  And I think in your case, Mike Froman did a very good job as USTR.  Our various trade representatives and negotiators did their best to make sure that they could bring back something which the political leaderships could stand by and support.  And it’s an achievement that all the members of the TPP, at the end of this, are still with us, and nobody has dropped out of this.  So, obviously, there is something in it for each one of us.

And I think we should also look at the other side of the economic benefit, which is not the producers — I am making, I am exporting, therefore I am earning a job — but also I am spending, I am consuming, I am importing, and because it’s freed up trade, I am getting a wider range of products, of services, of opportunities, which will improve my livelihood.  People talk about Walmart, that products come from all over Asia.  Who benefits — Walmart?  Many people in America, not just exporters, but even people living in the Rust Belt, people living in the Midwest.  These are part of your everyday invisible standard of living, and yet it’s real and it’s valuable.

So in terms of the economic benefits, the TPP is a big deal.  I think in terms of America’s engagement of the region, you have put a reputation on the line.  It is the big thing which America is doing in the Asia Pacific with the Obama administration, consistently over many, many years of hard work and pushing.  And your partners, your friends who have come to the table, who have negotiated, each one of them has overcome some domestic political objection, some sensitivity, some political cost to come to the table and make this deal.

And if, at the end, waiting at the altar, the bride doesn’t arrive, I think there are people who are going to be very hurt, not just emotionally but really damaged for a long time to come.  Mr. Abe, for example, several of his predecessors thought seriously about and decided not to participate in the TPP.  They came very close.  They prepared the ground, they walked away.  But Mr. Abe came through and decided to commit.  Why?  Because he wants to help.  He wants his country to benefit and to open up its markets, and this is one way to do it.

And you don’t do this, while it hurts Mr. Abe is one thing, but it hurts your relationship with Japan, your security agreement with Japan.  And the Japanese, living in an uncertain world, depending on an American nuclear umbrella, will have to say, on trade, the Americans could not follow through; if it’s life and death, whom do I have to depend upon? It’s an absolutely serious calculation, which will not be said openly, but I have no doubts will be thought.

I think if you go beyond that, I’d like to link up the TPP question with another question from Nicholas, which is, where do we go over the next 50 years?  And that really depends whether we go towards interdependence and therefore peaceful cooperation, or whether we go for self-sufficiency, rivalry, and therefore a higher risk of conflict.

Asia has tried both.  The world has tried both.  In the 1930s with Smoot-Hawley, with the Depression, with a very difficult international environment, you went for protectionist policies, you had a rivalry with Japan, which led to war.  After the war, because America was open, because you promoted trade, because you encouraged investments and encouraged other countries to open up, therefore the Asia Pacific has been peaceful and the Pax Americana has been a pax and not a war.

If over the next 50 years, you continue to work towards interdependence and cooperation and mutual prosperity, then 50 years from now we can say these have been peaceful years and we have made further progress together.  But if you go in the opposite direction, and you decide that this is a big Pacific but it’s big enough to split it down the middle, and one chunk is mine and the other chunk belongs to some of the Asians — China or India or Japan — I think that’s a very different world.

One of the reasons why you don’t have a — you have a manageable relationship with China now is because you have trade with them.  It’s enormous, it’s mutually beneficial; both sides want to maintain that relationship.  If you didn’t, it would be like the Soviet Union during the Cold War when you had negligible trade and while you still had to find ways to work together, but it’s much harder.

Now, the TPP doesn’t include China, although some people think it does, but the TPP points the direction towards the world, towards your whole orientation of your society.  And if you set the wrong direction, maybe in the next 50 years sometime you will turn around, but it will cost you many years and the world will have to pay quite a high price.