So, the Trans-Pacific Partnership bill is heading to President Obama’s desk. I just wanted to make a few observations so I’ll keep this very short.
First, the TPP is not a trade deal; it is an investor rights agreement. The core of the TPP consists of creating a stringent intellectual property rights regime. The big winners are therefore pharmaceutical, software, and entertainment firms; alongside the big banking and consulting firms who will be able to better thwart the participating nation-states’ regulatory efforts.
Second, the TPP will give a big boost to offshoring manufacturing processes. American manufacturing giants will find it easier to expand their global supply chains; increasing their profitability even as it further undermines the bargaining power of American workers.
Third, organized labor has reemerged as a significant player in Washington, DC. There was of course no possibility of defeating the combined might of American business. But the very fact that it was able to mobilize the House at such a large-scale is itself surprising. While American workers have suffered a tremendous defeat, the good news is that the patient still has a pulse; despite being pummelled relentlessly for thirty-five years.
Fourth, the geopolitical gains in terms of balancing China are meagre. TPP participants are unlikely to wrestle back manufacturing from the mainland. China will continue to be the largest trade partner of all twelve nations. Closer diplomatic and military cooperation between the United States and the nations of the Pacific rim may not necessarily follow closer economic ties. And even if it did, the contribution of the Pacific light-weights will be of marginal significance. The point it that there is only one state in the region that can help the United States balance China: Japan, whose alignment was already guaranteed.
Fifth and last, instead of stemming the decline of American power, the TPP will accelerate it. It will further erode America’s manufacturing capacity, and with it, America’s military preponderance. The point is that wealth is not power. While the TPP benefits the holders of capital, it undermines the capacity of the United States to generate military power. The trade-off is real even if sophisticated analysts don’t want to put it so bluntly.