United States election: Contention over international trade

An interesting aspect of the presidential election campaign in the United States was a developing controversy over the role of (and benefits to) the United States in participating and cooperating in new mechanisms for consolidating the management of international trade. And the controversy has taken the form of opposition by then Republican candidate Donald Trump to United States participation in such arrangements, including the 12-nation Trans Pacific Partnership (TPP) which President Obama has concentrated on strengthening.

Trump’s opposition to what he has described as “a terrible deal”, comes within the framework of what he believes to be developing countries bordering the Pacific Ocean (in effect countries of Latin America and the Pacific) using the TPP to take advantage of the United States capacity to maximize the terms of  its trading relationships in the area. And this to him has meant, in effect, minimizing the financial benefits which the US could gain if it simply sought trading relationships without conceding what he considers the accompanying advantages to states in the area, many of which fall under the rubric of developing economies.

Indeed the grouping of the twelve countries – US, Canada, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Mexico, Chile and Peru, are also members of APEC (Asia-Pacific Economic Cooperation), a wider  grouping of developing and developed countries in that geographic zone, including the United States. And it took the opportunity at the end of last week to extend strong support for the Trans Pacific Partnership, indicating that “we reaffirm our commitment to keep our markets open and to fight against all forms of protectionism” and “rising skepticism over trade”.

Trump’s comments on the TPP were given a certain resonance over the last few months, as a result of an effort by then presidential candidate Hillary Clinton to take advantage of what she appeared to accept as a rising scepticism within the American electorate over the benefits to be gained by American business in the face of concessions made by the American government. But President Obama did not support her line.

The fact of the matter is that the Latin American states bordering the Pacific have now come to accept that the process of globalization, which has benefited many of the Pacific developing states and which China has long come to terms with, now requires a firm commitment to private-sector-led economic growth. And like other major states in Asia – Indonesia, Malaysia and the Philippines which has long been within the American economic fold, they have come to terms with policies necessary for full participation in global economic growth.

The recent APEC conference in Peru, which included the presence of President Obama, has now formalized this approach, scepticism about which still, however, seems to remain as part of President-elect Trump’s thinking. But clearly, President Obama has sought to firm up American commitment to international free trade, positioning the United States as optimally prepared to take advantage of its economic dominance.

In that context he never supported Hillary Clinton’s scepticism which she herself had to subordinate during the election campaign, in spite of Trump’s insistence that aspects of economic globalization have had negative effects on the United States, particularly in terms of the ability of American factories and external economic salesmanship to come to terms with the new economic giants like China.

It is instructive that President Obama has been firm on the issue at the Peru meeting chaired by President Pedro Pablo Kuczynski, a long-time professional economist and participant in international and Peruvian private sector economic growth. He, and American policymakers will have been well aware of the Chinese initiative to establish a grouping of 21 nations in the Asia-Pacific area, now referred to as the Regional Comprehensive Economic Partnership, which will undoubtedly be perceived as an attempt to balance the American economic and institutional strength in that zone.

The odds are that although incoming president Trump insisted, during the election campaign, that the American mode of international economic negotiation led to a variety of unacceptable concessions leading, in his view, to a reduction of US international competitiveness, he will be quick to come to terms with the implications of the Chinese initiative. It is after all reflective of the desire of the countries in South and Southeast Asia and in the Pacific to seek to balance the initiatives that have emanated from the western countries in international organizations dealing with trade and development.

But following on the recent elections too, it is likely that the Democratic Party, now in opposition, will have to come to terms with initiatives taken by Trump if he is to follow the implications of his campaign promises. Until now, there has been a relatively harmonious position on the part of both the Democrats and the Republicans that a full participation, and almost by implication, a continuing dominance in international trade, is a major objective of the United States. But how Trump elaborates his opposition to what he has portrayed as a weakening of America in terms of international competitiveness, is left to be seen.

For the increasing indications are that as China, and indeed Russia, seek to sustain and increase their position in participation in what is now accepted by them, as a one-world international economic system, the dominance of the US in contemporary regional and global organizations in terms of rule-setting, will not have the comfort of a one-world system traditionally dominated, essentially without challenge, by that country.

In a sense that has been President Obama’s message to his domestic community, vis-à-vis the election campaign of President-elect Trump, who portrayed his country as destined to almost unilaterally continue its post-World War II dominance. But candidate Clinton’s decision to reject his Trans Pacific Partnership initiative did not help to consolidate the President’s orientation.

Of course the matter is now in president-elect Trump’s hands, and it is left to be seen whether he will see the facts of the present global situation as coinciding with his electoral assertions.

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