Student Blog – Matthew Reitz | The Trans-Pacific Partnership: Implications beyond Economics

tpp.sepIn a recent New York Times article, Secretary of Defense Ashton Carter is quoted saying that the Trans-Pacific Partnership (TPP) is “as important as another aircraft carrier” to the US’s strategy in the Pacific. Secretary Carter is emphasizing the TPP as a crucial lynchpin to the pivot to Asia, but why? America’s pursuit of the Trans-Pacific Partnership (TPP) has been met with heavy domestic criticism yet TPP proponents argue its importance extends beyond economics. What makes the TPP important beyond economic matters in Asia and how does the agreement act as a lynchpin for the pivot to Asia? The Tower Center for Political Science Studies’ “The Trans-Pacific Partnership: Implications beyond Economics” featuring former Acting Assistant US Trade Representative for Japan, Korea, and APEC Affairs Michael L. Beeman.

According to Michael Beeman, the TPP is critical to the pivot to Asia due to economic trends within the region. Asian markets are growing and they’re pursuing free-trade. As the US debates the merits of the Trans-Pacific Partnership, Pacific nations are flirting with the idea of the TPP or other agreements such as the Regional Comprehensive Economic Partnership (RCEP), a concept of the ASEAN +6 Agreement. Markets are being carved up in Asia and the US can either go with the trend or miss the boat. Asia will not wait for the US to decide between internationalism or isolationism, liberalizing markets is becoming the standard. Of course, anti-TPP sentiment in the US spearheaded by liberal politicians like Senator Elizabeth Warren or conservative groups like the Tea Party raises the question of what the TPP’s odds of passing through the US Congress are. The Korean-US Free Trade Agreement passed with large numbers while the recent passage of Trade Promotion Authority passed by a thin margin. Beeman however, states that it is too early to tell what the TPP’s odds are. While there is pessimism regarding trade in Congress, Congress has yet to see the final product and judge the TPP on its merits.

Of course, what does the TPP do for US posture in the Asia-Pacific? Passing the TPP would not only ensure greater economic growth for the US, but help complement the US’s relationship with many Pacific nations and ensure closer diplomatic and military relations. As Beeman states, the US views the TPP as a way of maintaining a multi-dimensional, active relationship with East Asia. “Trade agreements are trade agreements” according to Beeman. “The TPP will compliment military power in the region, not supplant it.” The economics of the TPP are the driving force of the agreement. It will, however, help facilitate closer relations between the US and the other TPP signees, and will ensure Pacific nations feel the US is committed to them. While Ashton Carter stated the TPP is as significant another aircraft carrier within the region, the TPP does not change the strategic calculus of military arrangements in the region. The US already maintains a heavy presence in the region with nations like the Republic of Korea, Japan and Taiwan hosting US air and naval bases. While ASEAN members like the Philippines and Malaysia do not maintain active US bases, the US military is increasingly more involved with ASEAN states in naval matters. Implementing the TPP will not override this current relationship dynamic, but it will certainly facilitate closer relations.

Another question the TPP negotiations raise is how other Pacific nations that are not party to the negotiations are viewing the agreement. Presently, regional powers like China and the Republic of Korea are watching the TPP with interest and there is the possibility they will join the agreement should it pass. Korea has sent delegates to the negotiations, while China believes RCEP will bleed into TPP and integrate markets. China initially opposed the creation of the TPP but now believes that there will be linkage between RCEP and TPP nations, which would allow China to expand its markets further. While Beeman states that the TPP will not lead to economic competition with China, it will however, force nations to make choices on whom gets preferential economic treatment. Having preferential economic treatment will significantly impact the US’s power in the region and this factor provides all the more reason for the US to not miss the window of opportunity the Trans-Pacific Partnership presents. A TPP with China on-board would bring China into closer relations with its Pacific neighbors and empower the internationalists within the Chinese Communist Party, while a non-TPP China would enable party-hardliners more control over Chinese foreign policy.

In summary, the TPP’s prime importance is for the US to have access to Asian markets, and to support the pivot to Asia. The US risks getting cut out of trade within the region as preferential economic agreements are drafted. Asian nations are looking to create an Asian trade bloc and the TPP represents the US’s entry point into the bloc. As Beeman states, the TPP, unlike RCEP, as an open platform allows for new countries to enter and expand the growth of an Asia-Pacific wide trade block. New countries can join the agreement and new issues can be tackled incrementally as more nations join, and US leadership in the TPP will advance US interests within the region. Were the TPP to fail to pass, the US’s economic growth will be stifled and the pivot to Asia will be put in jeopardy. The TPP region represents 40% of the world’s GDP and liberalizing international markets represents the new norm. The US cannot afford to walk away from something that will drive massive economic growth for both the US and for the many Pacific nations.

Matthew Reitz is from Colleyville, Texas and is majoring in political science and financial consulting. Matthew is in the University Honors program and the Mustang 11 spirit group. He is also a Hilltop Scholar and has served as an inaugural member of the Residential Commons Leadership Corps. He serves as the President of Cockrell-McIntosh Commons and is an active member of the Alpha Kappa Psi professional business fraternity. His key interest is researching and developing policy for US international affairs in the East-Asia region that correspond to US national security and economic interests. He plans to pursue a career in the US government after completing graduate school.