A month before the US presidential election, it is clear that the Trans-Pacific Partnership (TPP) -- history’s most comprehensive free-trade deal -- will not be approved anytime soon in its country of origin.
Both the major-party presidential candidates and the Republican-dominated Congress have adopted a protectionist stance reflecting the mood of the voters, a vast number of whom believe such international deals drain away jobs and undercut production in the US.
Outgoing President Barack Obama, who initiated the TPP two years ago and has championed it during his overseas travels, has little time left to swing public or legislative opinion, and his successor is unlikely to try, at least not soon and not without a damaging reversal of policy.
As many as 12 nations have been earnestly negotiating TPP terms with US trade representatives, and they will now wait for the new president to settle into office in the vague hope that there might be a ground shift in the approach of the new president.
Either Donald Trump or Hillary Clinton will have to come to grips with the pact during their first year in office. Despite their stated opposition to the TPP, they are well aware that scrapping the negotiations would harm the influence of the US in the world, and that they must be heedful of the International Monetary Fund’s warning this week that rising protectionism will hamper the global economy’s recovery.
People in the US, for the most, do not seem to understand why their government has been pushing for more free trade with Asia. Understandably, mistrustful of Washington and big business and weary of costly foreign adventures, they do not perceive any benefit in expanding access to Asian markets, even if this is currently the world’s most dynamic region economically and even if more jobs might be created in the US as a result. Sensing the isolationist shift in public opinion, opportunistic politicos have convinced the people in the US that the fiscal malaise they are enduring is a foreign import, stemming from ill-advised trade agreements with the likes of China.
People in the US, in fact, should be reassured that free-trade arrangements are good for them and their country, and mutually beneficial for all partners -- but there is no one on the leadership horizon willing to challenge voter suspicions and offer that assurance.
For Asians at least, the uncertainty surrounding the TPP buoys the chances of the Regional Comprehensive Economic Partnership (RCEP) being approved under the auspices of the Association of Southeast Asian Nations. Thus far, the regional pact has made inadequate progress because key Asian economies have been less than cooperative. Recently, however, India has become more enthusiastic in the negotiations, a marked change from its previous protectionist attitude on goods and services.
With the TTP faltering, this would be the ideal time for China to take the lead in forging a pan-Asian deal, but Beijing is currently at political loggerheads with Japan, so a breakthrough seems impossible for the moment. In the meantime, China is keen to strike partnerships with Asean and its member-countries, thrusting Southeast Asia into the trade spotlight.
Four Asean member-nations -- Singapore, Malaysia, Brunei and Vietnam – are negotiating over the TPP, obviously confident that their economic conditions can cope with broader overseas trade. As such, they should be more open to the RCEP and assist fellow Asean members in making it a reality.
These are testing times, with an increasing number of countries looking inward, fretting over physical and economic security. However, the world is also increasingly interconnected, and no country can exist in isolation. Only through overseas engagement can we find solutions to inequality and discontent. We must be generous in spirit and pursue goals of mutual benefit.
