In November, President-Elect Donald Trump announced plans to withdraw from the world's largest trade deal on his first day in office. I wholeheartedly support him in this endeavor.
My position has been, and remains, that the terms of the Trans-Pacific Partnership (TPP) as negotiated by the Obama Administration, do not achieve the best possible deal for American workers and businesses. President-elect Trump should be commended for displaying leadership and resolutely pulling the plug on this ill-negotiated agreement. Doing so on Day One will send a clear message to the rest of the world that President Trump intends on using his Administration to protect and create American jobs, and that this is his top priority in any international trade treaty.
If trade is good for business and good for the country, then why is the TPP so bad? TPP is the “free” trade deal that would unite the United States and 11 other Pacific Rim nations including Vietnam, Brunei and Malaysia. In concept, negotiating a free trade deal with other nations should lower barriers on entry for American products being shipped abroad and help improve the competitiveness of American products sold overseas. However, that only holds true when we have negotiators demanding the best possible deal for American business and workers. This Administration has failed to negotiate a deal that achieves either goal. In fact, projections through 2025 demonstrate that of the 12 participants in TPP, the nation which would enjoy the least rate of growth to GDP as a result…is the United States of America.
TPP establishes trade agreements with a number of countries whose labor standards are disgracefully low, making it impossible for our American manufacturing and industrial businesses to compete. For example, the government of Brunei has a history of exploiting child labor and a legal system based on Sharia law; likewise, in Malaysia, workers are denied the right to strike and bargain for higher wages. While the TPP does have a labor chapter that seeks to correct some of these fundamental workforce differences, the chapter does not specify how exactly the new labor requirements should work. The Economic Policy Institute estimates that under the TPP we stand to lose more than 130,000 jobs to Vietnam and Japan alone. How are American manufacturing companies supposed to compete with companies in a country paying their workers pennies an hour? The temptation is too great for American companies to move factory production abroad and pay workers pennies while benefiting from the protections that come with a free trade agreement with the United States.
Another major concern with TPP is that it’s considered a “living deal.” What this means is that countries can later sign on and be added to the agreement after the fact. The Obama Administration was so eager for a deal at any cost that it ended up agreeing to one that would allow a country like China to come swooping in years later to further harm America’s economic standing in the world. The Obama Administration confused motion for progress.
In addition to American jobs, American sovereignty is also endangered by the proposed Investor State Dispute Settlement mechanism within the TPP. This provision would empower an international tribunal and give it jurisdiction over perceived economic losses claimed by the corporations of trade partners. In other words, it would allow an international body to subvert U.S. laws to our economic detriment.
The bottom line is that the TPP is a disastrous trade agreement that was poorly negotiated. But the question that remains is what should be next for American trade agreements?
Any deal the United States is involved in must be fair and mutually beneficial for all involved—and the TPP is neither. We must put American business and workers first and focus on equitable, bilateral trade deals to bring jobs back to our country.
Bilateral agreements can standardize regulations, labor standards, environmental protections and permitted governmental subsidies. They allow us to efficiently negotiate trade deals with our key economic partners in a way that is mutually beneficial to both sides. This is much more open and transparent, giving each country expanded access to one another's markets, and increasing each country's economic growth. These agreements go into effect faster, thus reaping the trade benefits more quickly. This option grows the American economy and maintains the 21st century standards we expect from trade partners.
A well-crafted agreement should be treated as domestic economic policy rather than an extension of foreign policy. In doing so, U.S negotiators will best represent American business and workers by constructing agreements that address currency manipulation, install robust mechanisms for rule enforcement, account for state and local control, protect against offshoring and outsourcing, and promote Buy American policies at all levels of American government. Moreover, this approach would recognize the importance of services trade on economic opportunity and the complexities of intellectual property rights—among other economic drivers such as migration, agriculture, public health, worker rights, the environment and national security. Trade deals are incredibly complex and when negotiating multilateral agreements with as many as a dozen countries or more, it is inevitable that compromises will be made that harm American job creation. Bilateral deals allow our negotiators to ensure with laser-focus, that a good deal is negotiated. Getting Americans back to work should be the heart and soul of any trade deal, and bilateral agreements optimize the president’s ability to achieve this.
President-Elect Donald Trump was elected by the American people to usher in much-needed reforms that restore economic prosperity and hope to working class communities. President Trump will have the opportunity to do something truly special and improve the economic fortunes of countless Americans by disposing of the Trans-Pacific Partnership trade deal and negotiating more effective and prosperous bilateral agreements in its place.
This op-ed ran in Forbes on December 2, 2016