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Trans-Pacific Partnership

Donald Trump retreats from trade deals at his peril

Asian countries will gravitate towards China if US influence is seen as declining

John McCain

© Getty

5 HOURS AGO by: John McCain

The ultimate impact of Donald Trump’s announced intention (http://next.ft.com/content/cad34bf4-b22c-11e6-a37c-f4a01f1b0fa1) to withdraw the US from the Trans-Pacific Partnership tradedeal is yet to be seen. But it is clear that it will give China an opening to assume economicleadership in Asia and may be treated by leaders across the region as a sign of America’s retreatfrom the responsibilities of world leadership.

The global progress of American economic and political values has been the dominant trend inhuman events since the end of the second world war. The US and its allies prospered greatly from

it and are immeasurably more secure than in the prewar world, when we tried to isolate ourselves

with, among other follies, protectionist trade policies.

To be sure, the changes wrought by liberalised international trade have not all been positive.

Together with technology-driven productivity gains, it has contributed to job losses in industries

and communities where manufacturing was once the main support of a thriving middle class. The

US is still a leading manufacturer but fewer Americans are employed in those industries. That

trend will continue whether or not we sign another trade agreement because productivity gains

will continue. Most lost manufacturing jobs were made obsolete by technology innovations.

But turning aside opportunities to sell more goods and services overseas will add to job losses, not

stem them. One in 12 American jobs (http://trade.gov/publications/pdfs/exports-support-americ

an-jobs.pdf) is dependent on international trade.

To argue against the global economy is like stating opposition to the weather — it continues

whether you like it or not. More than 95 per cent of the world’s consumers (https://www.uschamb

er.com/ad/95-worlds-consumers-live-outside-united-states) live outside the US. The global

economy will become more accessible and competitive, whether we try to remove trade barriers or

impose them. That is why withdrawing from TPP will hurt our ability to compete.

Barriers to trade in America are lower than in the other TPP countries and regulatory standards

are higher. TPP would have removed more than 18,000 tariffs (https://ustr.gov/sites/default/file

s/TPP-Guide-to-18000-Tax-Cuts.pdf) that had made our exports more expensive and less

competitive in 11 Pacific Rim markets. More importantly, the agreement was designed as a model

for future trade agreements by focusing on non-tariff barriers to trade, pursuing regulatory reform

in areas such as intellectual property, labour and environment laws, and limiting government

support for state-owned companies.

Beyond its economic benefits, TPP was to serve as an

important part of the foundation of American leadership

in the Asia-Pacific region. It would strengthen US

alliances there and build new relationships based on

mutual economic interests and increasingly shared

geopolitical ones. Its collapse will benefit China.

Diplomacy

Is Trump using Taiwanas a China bargainingchip? (http://next.ft.com/content/6f68c5a8-bb70-11e6-8b45-b8b81dd5d080)

Beijing is pushing its own trade agreement, the RegionalComprehensive Economic Partnership, with manycountries that would have been in TPP. It is a lessadvantageous agreement than TPP for all the countriesinvolved save China but it offers Beijing an easier way ofsealing its regional ascendancy than its heavy-handedclaims on disputed islands in the South China Sea (https://www.ft.com/indepth/asia-maritime-tensions).

Politics abhors a vacuum and Asian countries will gravitate towards China if US influence isperceived as declining. Rumours of the next administration’s intention to reduce the US militarypresence in Asia are shaping that perception, too, to China’s advantage.

It is a fool’s errand to try to recreate a mythical time when Fortress America was impregnable,unaffected by the world’s troubles. Instead, we should have faith in American leadership and thepower of our values, including the advocacy of free trade, which have made the world and us safer,freer and richer.

The writer is a US senator and chairman of the Senate Committee on Armed Services

Print a single copy of this article for personal use. Contact us if you wish to print more todistribute to others. © The Financial Times Ltd.

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