The final shovelful of dirt was tossed on American involvement in the Trans-Pacific Partnership when President Donald Trump withdrew the United States from the agreement.
And just like that, promising new economic opportunities in the Pacific Rim and elsewhere have been buried. That’s especially painful for Washington, the most trade-dependent state in the union.
Trump fancies himself a savvy businessman, but it was business groups that lamented the trade deal’s demise.
The Republican Party, once the beacon of free trade and a bulwark against protectionism, has been neutered on the issue. Democrats, for the most part, weren’t enthusiastic despite Barack Obama’s strong support. Hillary Clinton, once for it, came out against it when Sen. Bernie Sanders’ populist resistance gained popularity.
Trade has gotten a bad rap over the years, becoming a whipping boy for economic ills linked to other causes. Automation replaced many manufacturing jobs. No amount of deal-making can change that. Wage stagnation has been an issue since the 1970s, long before NAFTA and global pacts were inked.
International trade has helped put the brakes on inflation. It will be interesting to see how consumers, especially those on fixed incomes, react to higher prices if the Trump administration follows through with tariffs and other trade barriers. Those moves would also directly impact the budgets of the “forgotten Americans” the administration aims to lift up.
Trump has zeroed in on China as a bad actor when it comes to global trade, but no country stands to benefit more from a crippled TPP. The door is now open for China to strengthen its position among Pacific Rim nations.
TPP would’ve lowered trade barriers to American exporting industries such as aerospace, technology and agriculture. For Washington state, the deal with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam would’ve meant $8.7 billion annually and 26,000 jobs, according the Washington Council on International Trade.
It’s not just large corporations that would’ve benefited. Locally, Spokane Seed Co., which grows and processes dried peas, lentils and chickpeas, and Commercial Creamery Co. are two examples of businesses that looked forward to new markets created by leveling the playing field.
Moreover, regional farmers were excited about the prospect of selling more wheat to Vietnam, thanks to the lower taxes guaranteed by the TPP.
The best hope now is that the Trump administration follows up on its promise to cut two-party deals with individual nations, but such negotiations are complicated and time-consuming. Plus, the administration wants to renegotiate the North American Free Trade Agreement, too.
Trump called the TPP “a potential disaster for our country.” That’s news to U.S. exporters.
Peddling fear may boost short-term political prospects, but it won’t enhance prosperity.
To respond to this editorial online, go to www.spokesman.com and click on “Opinion.”
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