Reinforcing the Pivot to Asia: The Trans-Pacific Partnership

By Sumeet Aujla
Contributing Writer
January 7th, 2017

The Trans-Pacific Partnership (TPP) only has a slight chance of ratification. Donald Trump has disavowed the trade deal and congressional leaders have consistently downplayed any potential support. Yet, failure to ratify the trade deal would represent an economic opportunity cost for the United States. Even more importantly, it would be a grievous setback for the American pivot to Asia. The pivot would lose its economic dimension and be reduced to a mere shift of military assets to the South China Sea. To preserve American credibility and sustain the pivot to Asia, the TPP must be ratified by the United States.

The TPP is a landmark accord between the United States and 11 high- and low-income countries across the Pacific Rim. The trade deal reduces trade and investment barriers and establishes pro-market rules for its members. If ratified, the TPP will likely generate $131 billion in annual income gains for the United States and increase annual exports by $357 billion by 2030. While these gains might appear modest, especially given the $17 trillion value of the U.S. economy, this estimate does not include other, less tangible factors. It also ignores the external harm to the United States that will result from a repudiation of the accord.

The TPP allows the United States to support its military shift towards Asia in a way that no other policy can replicate. The United States has loosened the arms embargo on Vietnam. It has reached a basing agreement with the Philippines. It has normalized the relationship with Myanmar. The Obama administration has also moved to strengthen ties with the Japanese military, which, in turn, updated its self-defense doctrine. The U.S. military has responded to the development of China’s anti-access, area-denial capabilities by launching the Third Offset Strategy and constructing a new range of capabilities. The TPP would further boost relations by guaranteeing mutual economic interest.

It would also increase U.S. strength relative to its rivals. China has been left out of the TPP and would not benefit from the increased trade liberalization. China has been reluctant to fully liberalize its market. Negotiations over a bilateral investment treaty between the United States and China appear to have reached an impasse. Thus, the TPP would create pressure on China to liberalize its market and abide by the rules and regulations created by the TPP. A significant number of its trading partners will be members of the new economic bloc and China will have to abide by TPP rules to trade with them.

Perhaps even more importantly, the TPP will serve as the economic fulcrum of the American pivot to Asia. Military assets can be shifted relatively quickly, but the TPP will economically bind the U.S. to developing, high-growth economies. This binding is no small accomplishment at a time when global growth has slowed to a crawl. The perception of a rebalance alone could encourage regional powers like India to consider joining the TPP and draw closer to the United States.

Failure to ratify the TPP would create the opposite perception of the United States. The United States would appear to be a retrenching power unable to keep its commitments. Already, this perception seems to be setting in. The United States’ clumsy attempt to prevent its closest allies from joining China’s Asian Infrastructure Development Bank was rebuffed. Germany, Australia, Great Britain, and South Korea all joined the Asian Infrastructure Bank, lending credence to the old adage that it is impossible to beat something with nothing. China’s Infrastructure Bank, and the Silk Road Initiative are designed to extend China’s reach and influence. Perhaps unfairly, the TPP has become a test of the United States’ commitment to its Asian partners.

Ultimately, the TPP represents a great opportunity to economically reinforce the pivot to Asia and maintain the United States’ dominant economic position. The United States economically outperformed most other advanced economies emerging from the financial crisis and has grown at a higher rate. The United States is not a declining power that needs to flirt with retrenchment and decline. Undoubtedly, the TPP will create some winners and losers across the economy even as it is a net positive for the country as a whole. This is a normal consequence of any trade pact and the United States stands to reap real benefits from better access to Asian markets. China’s military aggressiveness in the South China Sea created an opening for the military pivot to Asia as China’s neighbors drew closer to the United States. China’s mercantilism has created an opportunity for an economic pivot that will allow the United States to set the economic rules of the road. Spurning the TPP would be a missed economic opportunity with grave repercussions for the United States.

Sumeet Aujla is a Master’s candidate in the Security Policy Studies program at the Elliott School of International Affairs at George Washington University. He has previously worked at the Hudson Institute. Mr. Aujla received his Bachelor of Arts in political science from New York University.

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