The Senate’s rejection of President Woodrow Wilson’s commitment of the United States to the League of Nations was the greatest setback to U.S. global leadership of the last century. While not remotely as consequential, the votes in the House last week that, unless revisited, would doom the Trans-Pacific Partnership send the same kind of negative signal regarding the willingness of the United States to take responsibility for the global system at a critical time.
The repudiation of the TPP would neuter the U.S. presidency for the next 19 months. It would reinforce global concerns that the vicissitudes of domestic politics are increasingly rendering the United States a less reliable ally. Coming on top of the American failure to either stop or join the Asian Infrastructure Investment Bank, it would signal a lack of U.S. commitment to Asia at a time when China is flexing its muscles. It would leave the grand strategy of rebalancing U.S. foreign policy toward Asia with no meaningful nonmilitary component. And it would strengthen the hands of companies overseas at the expense of U.S. firms. Ultimately, having a world in which U.S. companies systematically lose ground to foreign rivals would not work out to the advantage of American workers.
By my count, Summers lists at least five separate arguments for the Trans-Pacific Partnership, but none of them was the standard comparative advantage argument for free trade. Now maybe it’s because Summers thinks Greg Mankiw already handled that obvious starting point, or it could mean that a lot of powerful people were trying to ram this thing through for reasons besides their horror at tariffs.
People who are busy at work and taking their kids to soccer games should realize that we are operating in the context of all sorts of international agreements that would cede political authority to supernational organizations. With my consulting work, I am most familiar with the upcoming UN climate deal negotiations in December in Paris, but there are groups of busybody academics and officials always meeting somewhere, talking about ways to reduce any remaining oases of freedom on planet Earth. This is one of the rare times when I agree with Paul Krugman: the TPP isn’t about free trade.