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Why progressives should rescue the TPP trade deal
The Trans-Pacific Partnership (TPP) is under siege, with presidential candidates on both sides of the aisle voicing increasingly protectionist positions. As the general election gets into full swing this fall, the anti-trade rhetoric promises to reach fever pitch, taking down TPP in the process.
Progressives, however, are making a mistake in rejecting the 12-country trade accord. As an economist who specializes in trade and trade agreements – and as a progressive who believes in the importance of environmental protection, workers' rights and shared prosperity – I believe the TPP presents a rare opportunity to rewrite key rules on global trade for the better.
The TPP is less about tariffs and more about creating a coherent global code of conduct for how firms do business in the world. Done right, the agreement would bring important new policy priorities to the negotiating table. It would be a shame to let this chance pass us by.
Skepticism and surprise
As late as last summer, there was ample reason to be skeptical of the then still-secret agreement.
Many doubted that the negotiations would protect workers’ rights and the environment, without letting multinationals write the rules of the game. Perhaps surprisingly, the final agreement largely delivers on its progressive promises, with solid labor and environmental protections that are unprecedented in a major trade deal.
The TPP’s new rules would achieve a high-water mark in global efforts to abolish child labor and gender discrimination, protect collective bargaining worldwide, curb trade in endangered species and conserve critical marine resources. Even the much lambasted “investor-state” provisions would modestly walk back existing rules, in favor of national governments over foreign firms.
It is therefore surprising that many of the nation’s leading progressive politicians continue to speak out against the pact.
Bernie Sanders has decried the TPP as a “disastrous trade agreement designed to protect the interests of the largest multinational corporations at the expense of workers, consumers, the environment and the foundations of American democracy.”
Hillary Clinton – who initially supported the pact – faults the agreement for disproportionately benefiting pharmaceutical companies and costing American jobs. Elizabeth Warren has voiced sharp opposition to the provision that allows companies to mount legal challenges to sovereign nations.
To be clear: There are legitimate concerns. But it is not enough for progressive leaders to raise alarms. Americans need serious, sober consideration of exactly what the TPP is – and what it is not – in order to understand whether its benefits outweigh its costs.
And at its core, the TPP is about applying a consistent set of standards to global supply chains, rules that reflect American – and progressive – values.
A progressive rulebook
Trade today is far more complex than ever before. Nearly every product that touches our lives has been conceived, designed and assembled in multiple countries, tracing sinuous and sometimes murky paths that consumers have neither the time nor the information to unravel.
No matter how vigilant and well-intentioned customers may be, there is no way to opt out of global commerce and the sometimes-questionable practices it embodies.
The TPP is an attempt to address this modern dilemma, using free trade with the U.S. and other major markets as an incentive for signatory nations to follow a basic global code of conduct. Crucially, the TPP’s rules would be enforced through a dispute settlement panel that aspires to be transparent and expeditious.
This “deep” agreement approach is in sharp contrast to the status quo of “shallow” trade agreements, which effectively take a pass on addressing difficult but vital environmental and labor issues, consumer protections and transparency measures that allow small business to compete in world markets. Deep agreements are also increasingly important for firm success – and thus the overall health of communities and workers – as global supply chains reshape the contours of international commerce in the 21st century.
The TPP’s promise of a new progressive rule book – one that includes enforceable agreements against child labor and workplace discrimination, measures to punish illegal logging and trade in protected species, and protections against consumer fraud – would mark a substantial step forward in the progressive policy agenda on the global stage.
Finding the right focus
There is no doubt that by cutting tariffs, the TPP will cost some jobs, even as it creates others. And in relatively wealthy countries like the U.S., the burden of job losses will likely be borne disproportionately by those workers already struggling from earlier waves of import competition and technological change.
But continuing mechanization and inevitable changes in what America is best at making will cause far more job displacement than proposed tariff cuts ever could, especially from the U.S.’ already very low tariff rates. Refusing to sign the TPP won’t stop these ongoing and seismic shifts in the global workforce. Serious pro-worker policy proposals needs to begin by acknowledging this truth.
Squabbling over a (relative) handful of specific job losses in the TPP only delays an increasingly urgent national conversation about inequality, good jobs and opportunity. American workers would be far better served if progressives focused instead on implementing comprehensive improvements in education, job search and relocation allowances, and income support that help everyone cope with rapidly evolving labor markets.
Shaping trade’s future
The TPP is not a referendum on globalization. It does not swing open the doors to foreign imports. Nor is it a triumph of corporations over people. It is barely even a trade agreement in the traditional “tariff-cutting” sense. Rather, it is about what we want global trade to look like in the future.
It is an agreement that aspires for a better way of doing business in the world. If ratified, the TPP would bring enforceable, progressive standards of conduct into as-yet unpoliced policy areas like labor and the environment that are currently the Wild West of global trade. Add in the well-recognized benefits of improved customs transparency and improved market access, and the benefits of the accord are substantial.
The agreement is not perfect – intellectual property rules are unarguably a compromise, and disciplines on rule-breaking behavior by firms or governments could be stronger – but we need to be pragmatic.
Renegotiating the agreement – which took seven years to hammer out – is simply too risky. There is a very real prospect that our trading partners would refuse. And if the TPP fails, there is every reason to expect that China would write the rules instead, with a far less progressive agenda.
No, the TPP is not perfect, but it is the best deal we are likely to get, and it is certainly better than nothing.
Emily J. Blanchard does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.
Emily J. Blanchard, Associate Professor, Dartmouth College