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Saturday, December 2, 2023

Under Biden, US is likely to rejoin the Trans-Pacific Partnership

"The reasons make good sense."



Shortly before the 2016 United States presidential elections, with Democratic candidate Hillary Clinton apparently on her way to victory over Republican candidate Donald Trump, I wrote a column titled “Will Hillary stay with the Trans-Pacific Partnership?” One of the principal drivers of the TPP was her fellow Democrat, President Barack Obama, who was then preparing to step down after two consecutive terms in the White House.

However, as the readers of this column know, things did not work out well for Clinton: The former First Lady lost to Mr. Trump despite having won the popular vote.

One of the main components of Donald Trump’s “Make America Great Again” campaign platform was the US’ withdrawal from all multi-lateral political and economic arrangements. During the electoral campaign, Mr. Trump identified the TPP as one of the first multilateral arrangements that a Trump administration would withdraw from if he were to win. Trump’s avowed desire to remove every last vestige of President Obama’s legacy was another basis for his administration’s waste-no-time withdrawal from the TPP.

Trump will soon cease to be president, and he will be succeeded by a man who has no aversion – philosophical or temperamental – to American participation in multi-lateral arrangements. For starters, President-elect Joseph Biden has signaled the intention of his administration to bring the US back into two such arrangements that Trump has withdrawn from – the Paris climate accord and the nuclear power deal with Iran.

Is incoming President Biden likely to decide to bring the US back into the TPP? He is likely to do so. The reasons for this are pretty much the same ones I advanced in 2016 in support of my belief that a Clinton administration would stay with the TPP.

The first reason is personal in character. The TPP was one of the initiatives of Barack Obama’s administration and it will appear as an insult to the former US chief executive if something that is closely associated with him were to be discontinued by the US government. Mr. Obama knows fully well that Trump’s scrapping of American participation in TPP due purely to his known antipathy toward the 44th president, who he said was a non-US citizen.

The second reason I advanced for my belief that Clinton’s administration would keep the US with the TPP was the fact that Trump, in his campaign speeches, offered no viable justification for a US withdrawal from a trade arrangement that had undergone many years of thorough study. Candidate (and later, President) Trump could not satisfactorily explain how a US withdrawal from the TPP could Make America Great Again.

The third reason I advanced in support of a Clinton administration’s non-withdrawal from the TPP – the most substantive reason – was the fact that the US had no institutional framework for its dealings – trade, investment and finance – with a region that had grown to become the most important part of the world economy. Many of the US’ major trade partners especially Japan, South Korea, Australia and Vietnam, were and remain TPP members. What sense would it make for the world’s No. 1 economy to not stay within a group that encompasses the world’s No. 3 economy and other major trading partners? By being a member of both TPP and the North American Free Trade Agreement (renegotiated and renamed during the Trump years), the US would have preferential access to the markets of Northern America and the entire North Pacific Area. Why would the US government not want America to be in such a favorable situation? Shunning good trade arrangements is a far more rational way to Make America Great Again than igniting trade wars that disturb the world economy and cause much direct and collateral damage.

For those reasons, it is highly probable that the incoming Biden administration will quickly signify its desire for US re-admission to the TPP.

Certainly, President Biden would not want his administration’s trade policy to be seen as a mere extension of the trade policy of his immediate predecessor. 

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