By Amy Studdart
United States Trade Representative Froman has been saber-rattling at the World Trade Organization (WTO). “Under the President’s leadership”, said Ambassador Froman, “USTR will continue working tirelessly to ensure that China and all WTO Members play by the rules so we can grow solid, middle-class jobs here in America.” And “We’re ensuring that it’s the United States that leads and defines the rules of the road.” The statements are notionally about a recently filed case concerning Chinese export subsidies. In reality, the Obama administration is using the case to drum up Congressional support for its trade agenda. However, the rest of the world – not just Congress – is also watching. The argument that humanity writ-large should play by U.S. rules in order to create solid, middle-class jobs in America amounts to a strategic misstep. It undermines the broader case the United States has been trying to make about why it – not China – should be at the center of the global trading order.
Few of the news reports on the filing have attributed the timing or the language to anything other than the White House’s desire to get trade promotion authority through Congress and ensure the passage of the Trans-Pacific Partnership (TPP) – a major free-trade deal that has been at the center of the Obama administration’s pivot to Asia. Trade deals are contentious and thus always subject to a certain amount of political theater: while there might be net job creation or higher wages, some jobs are lost; industries are shifted; compromises on standards are made. As a result, there is an understanding that part of the dance of trade negotiations involves officials branding themselves as self-interested nationalists – even where it defies the logic of free trade.
At a time when the United States is leading an effort to rewrite global trading architecture, however, describing trade agreements and the WTO as tools for enforcing U.S. rules which serve U.S. interests rather than as mutually-agreed upon frameworks which broadly serve the global good is counterproductive to the Obama administration’s trade agenda.
A large part of the TPP selling job in Asia, in the developing world, and to critics who suggested that the agreements essentially amounted to an abandonment of the fairer, multilateral (if painfully slow) process at the WTO has been that the United States is a benign leader in the global trading order, unlike some of the emerging economies – especially China – who seek to exploit the global economy to their own benefit. TPP is not being pursued just to advance U.S. interests, runs the argument, but because a freer global trading order with high standards and rules that can be fairly enforced is better for the global economy – which in turn is good for the U.S. economy. However, because TPP is an exclusive agreement, this line of argument only works if it is conceived of as step one of a longer-term strategy toward a more inclusive trading system.
Fears about being left out of this new trading order are running high – in China, sure, but also in the developing world, and Europe where there is a sense that USTR isn’t taking TTIP as seriously as TPP. As an excellent paper by the European Center for an International Political Economy explains, Europe risks being put at a disadvantage in both the U.S. market and large swathes of the Asian market if TPP goes into force. There has also been an increasing amount of attention paid to the negative effects TPP and TTIP might have on sub-Saharan Africa: see here, here and here, for instance. Publics too are skeptical about U.S. intentions: op-eds, petitions, and protests about how TTIP will allow megalomaniacal U.S. companies to suppress wages, feed people bleached chickens, undermine the policies of democratically elected governments, and exploit the sick are a dime a dozen.
In a Foreign Policy op-ed on February 17, Ambassador Froman shifted his focus to the internationalist case: “the rules-based system we have led since World War II is competing against alternative, more mercantilist models.” But more nationalist language still makes it through, despite the fact that Foreign Policy’s readership is 40 percent international: “We can lead and ensure that the global trading system reflects our values and our interests, or we can cede that role to others, which will inevitably create a less advantageous position for our workers and our businesses.”
The original impetus behind TPP for the United States was more about ensuring the continued development of an open, cooperative global economy than about shipping U.S. beef to Japan. As TPP negotiations enter into their final phase, the Obama administration needs to make sure that short term political tactics don’t undermine that longer term strategy. Ambassador Froman was right in his Foreign Policy op-ed that this is a competition. Winning will depend in part on persuading the world that the United States is willing and able to act in the global interest, not just its own.
Matthew P. Goodman is senior vice president and William E. Simon Chair in Political Economy at CSIS, with particular emphasis on Northeast Asia.