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A Farewell to Globalism The New Standard for U.S. Trade Deals By Matthew Jordan
The End of the TPP Throughout his campaign, Donald Trump often criticized former President Obama’s signature trade deal, calling it “horrible.” However, there was even criticism from the left saying that this deal was costing the U.S. jobs and that it was increasingly causing competition between the participating countries’ labor forces. For decades, direct investment into foreign countries has been a common practice amongst companies as a means to enter foreign markets. However, Matthew Jordan is the Publishing Editor at The Arch Conservative.
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this developed into companies hiring foreign manufacturers to build their products at a much cheaper cost than that of domestic production. AT&T was one of the first to do this back in 1985 when they offshored production of residential telephones to Singapore. So how does the TPP further a business activity that has been around for decades? With the idea of free trade and further economic development on the line in this deal, companies would potentially have even more access to cheap labor which would continue the trend of companies offshoring labor for cheaper alternatives. Bernie Sanders seemed to believe the same trend would continue in a statement saying, “these treaties have forced American workers to compete against desperate and low-wage labor around the world. The result has been massive job losses in the United States and the shutting down of tens of thousands of factories.” Another aspect of the deal that caught heat from both sides of the aisle was its 'investor-state' dispute settlement provision. In its most basic sense, this gave corporations the power to sue governments outside traditional legal channels and before a tribunal, which had the capability to undermine national sovereignty. These criticisms went right in line with Trump’s idea of an “America First” policy. One of Trump’s campaign promises that struck a chord with the electorate was that he was going to re-negotiate trade deals to reform them in the best interest of American citizens, including those that had to watch their manufacturing job be shipped overseas for cheaper options. Three days after Trump’s inauguration, he
upended the deal. In doing so, Trump sent a message to the rest of the world, demonstrating that he was not going to maintain the Republican idea that expanding global trade was good for everyone, and that the United States should be in the driver’s seat of international commerce. President Trump’s decision to eliminate the TPP went against the efforts of presidents dating back to the Cold War, a move that aligned him more with a more leftist ideology. At a meeting with union leaders, Trump told them that, “we’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed,” a statement that drew applause from the crowd. Possible Lasting Effects of the Withdrawal Michael B. Froman, the trade representative who negotiated the pact for Obama, said in an interview that, “there’s no doubt this action will be seen as a huge, huge win for China.” He went on to say that “For the Trump administration, after all this talk about being tough on China, for their first action to basically hand the keys to China and say we’re withdrawing from our leadership position in this region is geo-strategically damaging.” The agreement, which is said to be the largest such regional trade accord, aimed to establish rules for resolving trade disputes and protecting intellectual property, which is said to be the biggest single hurdle for most companies to overcome when considering entrance into the massive Chinese market. Trump believes that multilateral trade
SPRING 2017
PHOTO COURTESY OF THE NATIONAL MUSEUM OF THE U.S. NAVY
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n February of 2016, 12 countries that border the Pacific Ocean and account for 40 percent of the world’s economic output signed an agreement that aimed to deepen economic ties between the participating nations. The way this trade agreement looked to do so was through the slashing of tariffs and the fostering of trade to boost economic growth with the ultimate goal being the creation of a new market similar to that of the European Union. This deal, often referred to as President Obama’s signature trade deal, sought to bolster America’s position in the Asia-Pacific region, a region dominated by the Chinese economy. This deal was seen as quite the achievement by supporters of the deal due to the fact that the member countries believed in very different approaches to topics such as environmental protection, workers’ rights, and the regulatory environment in each country.