My Take

The collapse of the flawed Trans-Pacific Partnership was inevitable

The trade pact typified the elitist thinking that put business first at the expense of ordinary people, and was a crude cover for the US China containment policy

PUBLISHED : Thursday, 26 January, 2017, 12:04am
UPDATED : Thursday, 26 January, 2017, 12:04am

In the summer of 2015, during a visit to the headquarters of athletic footwear giant Nike, Barack Obama made an impassioned defence of the US-led Trans-Pacific Partnership.

“If we don’t write the rules for trade around the world, guess what? China will,” he said. “And they’ll write those rules in a way that gives Chinese workers and Chinese businesses the upper hand.”

That speech, which was not widely reported at the time, offers two insights into US policy vis-à-vis China.

Why Trump’s withdrawal from the TPP is a boon for China

Firstly, despite repeated claims to the contrary, the US is pursuing a containment policy against China. Secondly, the 12-nation pact sans China was not just about eliminating quotas and tariffs but rewriting the rules of global trade as dictated, or at least heavily influenced, by Washington and its lobbyists.

A linchpin of Obama’s Asia policy, TPP is now dead in the water. Deep political divisions within the US had first left the pact unratified by Congress; now Donald Trump has officially withdrawn US membership, or rather, vital American leadership. Obama, it seems, made two fatal errors, regarding containment and globalisation.

One wonders what George Kennan, the intellectual architect of the containment policy against the Soviet Union, would make of Obama’s TPP. Kennan never thought the US and its allies could stop the Soviets from treating central Europe as their own backyard or sphere of influence.

He would likely think it futile to try to stop a rising China from treating the Pacific as a natural extension of its influence.

The Soviets were containable because they and their satellite states operated on an economic system separated from the capitalist world. China, however, has grafted its economic growth onto world trade and the global economy.

How does China’s ‘One Belt, One Road’ match up against the TPP?

Meanwhile, the TPP has always had a bad press because it typifies the kind of global elitist thinking that has led to populist anti-globalisation revolts like Brexit and Trump’s election.

Not only Trump, but Bernie Sanders and Hillary Clinton were on record against the TPP.

Its focus on protection for patents, copyright and drug prices, and enabling companies to sue sovereign states over public policy, looked suspiciously like a corporate hijack. Critics claimed lobbyists had access to the pact’s drafting denied to labour leaders.

China didn’t have to do much to see the TPP collapse under its own weight.