It took more than a decade, but last week 12 nations signed on to the Trans-Pacific Partnership.
It’s a complex deal that’s being compared to Bill Clinton’s North American Free Trade Act. If it works out as well, all the hand-wringing that lies ahead through New Year’s will be well worth it.
Sure, if you listen to old-line laborites, NAFTA sent about 700,000 jobs out of the country. But it also ushered in a period of robust trade that enlarged the pie for everyone and created jobs. (Regular readers will notice a recurrence of last week’s ‘larger pie’ theme here. No apologies.)
This time around, economists are trying to better control the narrative by floating 650,000 as the number of new jobs created by the surge in demand for exports. When pressed, those same economists estimate 600,000 jobs will leave the country.
As with NAFTA, counting jobs isn’t the best way to evaluate this deal.
An agreement that sets standards for labor conditions and environmental protections helps us all even as it raises the price of labor in Asia and with it the price of goods we import.
An agreement that extends U.S.-style patent and copyright provisions and peels back censorship is good for pharmaceutical firms, Hollywood studios, performers, academics and intelligent discussion.
And, perhaps more importantly, a deal that brings us into closer economic orbit with 11 Asian nations is a strong bit of global diplomacy designed for the long haul.
The deal is notable for who’s out – China – as well as who’s in – Japan, Australia, New Zealand, Singapore, Vietnam, Malaysia, Canada, Mexico, Chile, Peru and Brunei. Brunei? No, I can’t explain why a nation that a does $0.6 billion in trade with the U.S. is vital here but somebody in Washington likely will have to explain it.
For much of the past two presidencies, the U.S. has been focused on the Middle East. In the meantime, we’ve let China build alliances across Central Asia and Africa with infrastructure projects, much like the Soviet Union once strengthened its hold on Cuba and India. It’s tough to bargain with the only supplier of parts for your phone system and power grid.
Tightening U.S. economic ties to these 11 countries seems a belated step in the right direction.
Still, the naysayers are lining up, an odd marriage of skeptics and conspiracy theorists, old-style protectionists and labor, conservative Republicans and the Democratic left led by Bernie Sanders. The common thread dates to the League of Nations – we don’t want to give away any sovereign rights to a collective.
That thinking went out with the buggy whip. It’s hard to ignore the world is shrinking and the Internet is making boundaries irrelevant in whole new ways.
Winning passage is going to be a tough fight for President Obama but he has an ally in new rules that set a 90-day limit on debate and force a straight up and down vote without any amendments.
So what’s in the deal for Las Vegas?
As Mark Rowland points out elsewhere on this page, we’re an international brand with tremendous drawing power. Anything that helps pull these people closer is a good thing. After all, this coalition of 12 nations represents 40 percent of the world’s economy.
The really good news is that China has taken notice and is signaling it might be interested in signing on downstream. A China that embraces patent and copyright protections would be a worthy ally. But for now, let’s not hold our breath for that.
Instead, let’s shield our ears from the political posturing by presidential candidates seeking an edge by playing on old fears.
Pro bull riders won’t be the only ones having a bumpy ride here in December. It’s going to be a long, noisy ride till the end of that 90-day debate period. Buckle up.
