The TPP comprises 12 nations and includes Japan but not China. Representing 26% of world trade and 30% of global GDP, it serves as the cornerstone of Obama’s “Pivot to Asia.” But as both major US presidential candidates vow to renege or at least renegotiate the TPP and the Obama administration has mere months left in office, what are the chances that the agreement could stall indefinitely?
With the WTO in seemingly terminal disarray, the global trading order is gradually decomposing as states are negotiating agreements on the basis of preferential market access rather than multilateral principles of most favored nation. The United States has taken the lead in this process as it has sought to construct “mega-regional” deep free trade agreements with the EU and Asian allies.
A Trump victory in November would certainly lead to a long period of uncertainty with respect to US trade policy—and much else. However, assuming that a lame-duck ratification of the TPP cannot be achieved, a Clinton win would likely lead to new efforts to revive it in 2017 after the dust has settled. The trade promotion authority granted by Congress in 2015 does not expire until July 2018.
Notwithstanding campaign rhetoric, Clinton herself clearly favors the TPP and can be expected to restart the process by making cosmetic changes. By contrast, leading Democratic senators who have opposed the TPP, including Bernie Sanders and Elizabeth Warren are calling for re-negotiation based on stronger labor protections and rules preventing “currency manipulation.” Thus, a Clinton victory would probably lead to protracted new negotiations within Congress, followed by equally contentious negotiations with the eleven other signatories of the TPP under the specter of a nascent, Chinese-led RCEP.
Having obtained “fast-track” authorization from Congress in 2015 with Republican support, Obama still hopes to pass the TPP in a “lame duck” session of Congress after the election on November 8. However, few observers now believe this is possible. Republican Senate majority leader Mitch McConnell, whose support is essential, has declared that trade is a “politically toxic” subject.
Although no US president has ever failed to secure congressional ratification of a trade agreement, the prospect of ratifying the TPP has dimmed in the context of the turbulent US presidential campaign. Notwithstanding the central role that the TPP is projected to play in the attempt to contain China, Donald Trump has called it a “catastrophe.” As Secretary of State, Hillary Clinton praised the TPP as the “gold standard” of trade agreements but then was compelled to reverse her position as a result of growing opposition to trade liberalization from Bernie Sanders and Donald Trump.
The failure to ratify the TPP would deliver a significant blow to American global power and prestige. It would encourage Asian and Pacific nations including Japan, India, and South Korea to enhance their integration with China through their membership in an alternative, Chinese-sponsored Regional Comprehensive Economic Partnership (RCEP), which excludes the United States and is currently completing its 15th round of negotiations in Tianjin. It would, in Obama’s words, enable China to “carve up some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk.”
Currently, both the TTIP and TPP are encountering massive resistance arising not only from fears of outsourcing of labor, but also grassroots opposition to neoliberal, “behind the border” policies that decrease the regulatory capacity of states in favor of corporations. Although the TTIP appears to have stalled before a final agreement can be reached, largely as a result of European popular opposition, negotiations will probably be revived in 2017 and it is likely that an agreement in some form will eventually be concluded. By contrast, a TPP agreement has already been reached, but still requires ratification by a number of signatories including the United States.
Taken together, the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) would account for 65% of global GDP and exports, 80% of weapons-related spending, and 90% of weapons-related research and development. These pending agreements lie at the heart of US efforts to contain China's rise and consolidate its global hegemony in the 21st century. The TPP would facilitate the deepening of Asian and Pacific economic integration with the United States on American terms and compel China to reform and liberalize its economy in ways that would benefit US banks and corporations. As Obama has stated, the TPP “allows America – and not countries like China – to write the rules of the road in the 21st century.”
