Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP, Following Up, globalization, Reuters, TPP, Trade, Trans-Pacific Partnership, United Kingdom
Time to pat myself on the back. It’s on a trade issue that may seem obscure, but that’s actually an important example of how completely dishonestly pre-Trump Presidents, and their enablers in the Mainstream Media, tried to sell offshoring-friendly trade agreements and similar policies.
The agreement in question was the Trans-Pacific Partnership (TPP), pushed hard by former Presidents George W. Bush and Barack Obama, but resisted in Congress through the end of 2016 and nixed by Donald Trump two days after his first White House term began.
Any number of arguments were advanced by globalization cheerleaders in government, business, academe, and journalism alike. Some were economic (e.g., the deal would “compel” the 11 other signatory countries throughout the Pacific Basin region to abide by high standards for respecting worker rights and environment protections that would level the proverbial playing field for U.S.-based companies and workers). Some were strategic (mainly, the TPP would be a great instrument for containing the rise of Chinese power and influence in the economically crucial East Asia-Pacific area). They’ve been parroted conveniently here.
All were utter baloney. For example, as noted on RealityChek, the labor rights and environment provisions of the deal – and other parts aimed at limiting government subsidization of industries – were completely unenforceable. As for the China containment claims, they ignored the TPP rules that permitted the importation into the new free trade zone of products with lots of Made in China parts, components, and materials – meaning that Beijing would have enjoyed many key benefits of the agreement while incurring exactly none of its obligations.
But arguably the most laughable (but widely swallowed) pro-TPP talking point involved the contention that the agreement would open to U.S. exports markets representing an impressive 40 percent of the entire world’s economic output.
I put the torch to that bit of fakery in this 2015 op-ed, which pointed out that at the time, fully 62 percent of the new trade zone consisted of the U.S. economy, and that without America, the rest of the members combined added up to just slightly over 15 percent of global product.
More fun facts: Another 20 percent of the economies of the proposed free trade area was comprised by Mexico and Canada – which were already linked to the United States via the North American Free Trade Agreement (which has since been updated and improved). So the only way anyone could legitimately call the TPP a potential export bonanza for the United States was if they counted America trading with itself.
And just today, a news report came out showing that I’m still right about the minimal possibilities offered by the TPP to the United States’ domestic economy (that is, companies that make their products state-side and employ Americans). According to Reuters, the United Kingdom (UK) is planning to join the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).” That’s an effort by the other TPP countries to create a version of the former agreement without the United States.
The UK’s top trade official is making some familiar-sounding arguments: “Today we’re announcing our intent to pursue accession to CPTPP, one of the world’s largest free trading areas.” And to some extent, I can’t blame her. After all, the country’s trade opportunities will be significantly diminished by the Brexit decision to leave the European Union. So the UK clearly needs all the partial substitutes it can get.
But as Reuters’ coverage makes clear, the prize is even more underwhelming than when I quantified it five years ago, as the U.S.-less trade area right now represents only 13.5 percent of the global economy.
And by the way, as with the pre-Trump United States, London is bound to be disappointed with its new CPTPP partners in another important way: Most of them rely heavily on growing by racking up trade surpluses. That is, agreement or not, they’re unlikely to display any greater appetite for British products and services as they were for any U.S. counterparts or for any foreign products and services – they can’t create them themselves.
Since the 18th century, “Rule Britannia” has been one of the most popular British patriotic songs. Joining the CPTPP could well prompt a composer to create a modern version titled “Rue Britannia.”