The politics of trade policy have become toxic in the United States
For decades, the mainstream Democratic and Republican parties have promoted the expansion of trade between the United States and other countries. Greater globalization, these politicians promised, would increase economic growth – and with the generosity of that growth, the country could compensate any workers who would suffer from increased trade. But it didn’t work like that.
Instead, trade has contributed to stagnant living standards for millions of working-class Americans, by reducing the number of well-paying blue-collar jobs here. Earnings for workers without a bachelor’s degree have grown only slowly over the past few decades. Many measures of well-being – even life expectancy – have declined in recent years.
Throughout, many politicians and pundits have continued to insist that trade makes the economic pie bigger. And they were often right. But struggling workers understandably saw these claims as false or irrelevant, and they refused to support further trade expansions.
After President Barack Obama negotiated a major new trade deal – the Trans-Pacific Partnership, or TPP – members of both parties criticized it and the Senate refused to ratify it. Donald Trump then won the presidency partly on an anti-trade platform, and he officially withdrew the United States from the TPP
This morning, President Biden, on his first trip to Asia since taking office, announced a deal he hopes represents the future of trade policy. It is known as the Indo-Pacific Economic Framework and includes India, Japan, Indonesia, South Korea, Australia, Vietnam, the Philippines, Thailand, and a handful of other countries.
This framework is much less ambitious than Obama’s TPP. But the TPP was never adopted by the United States, so it is in some ways a meaningless comparison. Biden’s goal is to handle trade policy in a way that is both less pompous and isolationist than Trump’s approach, but also less dismissive of voter concerns than both parties tended to be before the presidency. of Trump.
As a Biden adviser told me, the new framework is central to the Biden administration’s “post-neoliberal foreign policy.”
The crucial distinction between Biden’s framework and past trade deals is that this deal does not involve what economists call “market access” – the opening of one country’s markets to goods from other countries, through reduced tariffs and regulations. Rather, the framework revolves around increased cooperation in areas such as clean energy and internet policy. Accordingly, the agreement does not require Senate ratification.
A concrete example is the global supply chain. Under this framework, the 13 countries agree to quickly identify and resolve supply chain issues. If a Covid outbreak in one country forces a certain type of factory to shut down, a backup factory in another country can quickly ramp up production and minimize shortages around the world.
The China Factor
Officials in much of Asia remain disappointed that the United States has abandoned the TPP. They rightly note that Biden’s framework is much narrower and will do less to help Asian economies increase their exports to the United States. Calvin Cheng, senior analyst at the Malaysian Institute for Strategic and International Studies, told Al Jazeera.
Yet the Biden administration has persuaded virtually every country that it wants to join the framework to do so. Officials in those countries recognize that Biden is trying to re-engage with Asian allies, contrary to Trump’s “America-first” approach, and many are keen for the United States to play an active role in the Pacific. Otherwise, they fear, China could dominate the region.
U.S. officials have the same concern, and the new framework — vague as it is in parts — offers a structure for economic cooperation that bypasses China. If the US and other major Asian economies can agree on standards for supply chain, internet policy, energy, etc., China will have to choose between meeting those rules or missing out. new business opportunities.
Katherine Tai, the top US trade official, who joined Biden on his trip, told The Associated Press that the US was “very, very focused on our competition with China.” The new framework, she added, aims to counter China’s growing influence in the Pacific region.
Biden said the United States would militarily defend Taiwan if China invaded.
David Ignatius, The Washington Post: “Biden is heading to Asia this week to project American diplomatic and economic might in a region that has been rocked by the blunders of America’s two most powerful rivals, Russia and China.
Phelim Kine, Politico: “The Chinese government clearly senses a threat as the administration focuses more on Asia.” Chinese Foreign Minister Wang Yi has warned South Korea of the “risk of a new cold war”.
The framework includes both U.S. allies and “guardian of the fence” countries that want to maintain close ties with China and the United States, says Kurt Tong in The Hill. These fence keepers insisted that Taiwan not be part of the deal.
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