[CTC] U.S. Trans-Pacific Trade Deal is a Waste, Says Free Trader

[Arthur Stamoulis]

Begin forwarded message:

From: "Culpepper Travoris" <TCulpepper at teamster.org>
Date: April 30, 2012 2:47:14 PM PDT
To: "Arthur Stamoulis" <arthur at citizenstrade.org>
Subject: WSJ:U.S. Trans-Pacific Trade Deal is a Waste, Says Free Trader

April 30, 2012, 2:37 PM

U.S. Trans-Pacific Trade Deal is a Waste, Says Free Trader

HKT

Agence France-Presse/Getty Images
Protesters from a Japanese local farmer’s group stage a demonstration  
march with a placard that reads, “Let’s protect Japanese country and  
food” during an anti-TPP rally in Tokyo on April 25, 2012.
Arvind Subramanian is both a free trader and a U.S.-based expert on  
Chinese economic power. So why does the Peterson Institute for  
International Economics senior fellow argue that efforts to create a  
Trans-Pacific Partnership should be scrapped?

The proposed trade deal with Asian nations, including Japan, is the  
flagship trade effort of the Obama administration. It would more  
deeply tie the U.S. to Asia and, with the inclusion of Japan as a  
potential signee, become the most significant U.S. trade deal in many  
years.

It’s also aimed at a huge non-participant, China. The idea is to  
create rules governing state-owned enterprises, currency trading,  
antitrust policy as well as the usual trade fare, which would become  
international norms. If it works, China would either become a  
signatory or eventually adopt the practices.

But Mr. Subramanian argues it simply won’t work — or won’t work as  
well as other measures.

“China would never agree to just fall in line with rules in the  
negotiations of which it has not participated,” he writes in a policy  
brief.

If China did agree to participate in the talks, it would have huge  
bargaining leverage. Better to have multilateral talks where China’s  
power is diluted by the addition of Brazil, Europe, India and others  
to the talks.

A third possibility is that China comes to view the TPP as a hostile  
effort to “encircle” China economically. “TPP could thus provoke China  
into playing the regionalism game in a way that could fundamentally  
fragment the trading system,” he writes.

But the alternatives to the TPP aren’t promising either. The World  
Trade Organization’s “Doha Round” negotiations are “moribund,” he  
notes. (They have been going on for more than a decade with no sign  
they will be concluded any time soon — or ever. )

Mr. Subramanian suggests a few possibilities: giving China equal  
status to the U.S. and Europe at the International Monetary Fund,  
promoting the yuan as an international currency and granting China  
market-economy status so it has a better chance to defend against anti- 
dumping actions. He would also upgrade the Strategic and Economic  
Dialogue between the U.S. and China — the latest round starts on  
Thursday in Beijing — to include Europe, Japan, Brazil and India.

The idea is to make China feel its rise is welcomed by other nations  
and also to lessen its power by including other nations. But he warns:  
“There remains a distinct possibility of an eventual unbenign exercise  
of dominance by a hegemonic or near-hegemonic China.”

– Bob Davis

  
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