An Urban's Rural View

Keeping China From Writing the Rules

Urban C Lehner
By  Urban C Lehner , Editor Emeritus
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Campaigning for his proposed Trans-Pacific Partnership, President Barack Obama says if we don't write the rules in Asia, the Chinese will write them. Let's take a moment to consider that argument.

Congress will have to consider it soon. The president's negotiators hope to reach agreement with the other 11 TPP nations this summer, after which Congress must say yea or nay. Convincing the legislators won't be easy, judging by the fight over Trade Promotion Authority. TPA smooths the way for trade deals by eliminating the possibility of Congressional amendments. House and Senate leaders had to do backflips to get it passed.

Interest groups that feel threatened by imports, like autos, will likely oppose any TPP agreement. Those groups looking forward to exporting more, like agriculture and technology, are apt to favor it. Congress will have to weigh competing calculations of economic gains and losses.

But it will also hear warnings that America's role in the world is at stake. Reject this agreement, the Obama team will say, and China will supplant the U.S. as the leading Pacific nation. We will lose diplomatic and political influence in Asia. The Chinese will write the rules.

Exaggerated this fear may be. Idle it is not. Other countries would see a Congressional rejection of TPP as a replay of the U.S. refusal a century ago to join the League of Nations, which President Woodrow Wilson had won a Nobel Prize trying to promote. It would, to say the least, shake confidence in America's ability to lead.

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A TPP rejection would boost China's stature in Asia. The U.S. has been the power to reckon with and many Asian countries still value it as a check against dominance by a rising China. They will perceive a no vote on TPP as a sign the U.S. is retreating from the region. That creates a vacuum for China to fill.

Will this argument sway Congress? In the past, Democrats and Republicans alike supported American leadership in Asia. Whether that bipartisan consensus persists remains to be seen. Even if Congressmen care, they may care less than they did during the Cold War. If the choice is between jobs at home and influence in Asia, jobs will prevail.

The President will argue that's not the choice. Quite the contrary: If the Chinese write the rules, he told The Wall Street Journal (http://tiny.cc/…), "We will be shut out, American businesses and American agriculture. That will mean a loss of U.S. jobs."

Will Congress buy that? China, which is not one of the TPP countries, clearly has an interest in rule writing. It has set up an Asian Infrastructure Investment Bank, which the U.S. has spurned but allies like Australia and the United Kingdom have joined. It might someday negotiate regional trade deals of its own and exclude the U.S. This wouldn't necessarily "shut out" American trade, but it would be a disadvantage.

Congressmen might wonder, though, how long the U.S. can (or should) stop China from writing at least some of the rules. An economy as large as China's -- by one measure, it's already bigger than ours (http://tiny.cc/…) -- must inevitably have a say in the world. The Chinese are already brooding that we're trying to suppress their rise to greatness. In the 1930s, another Asian nation -- Japan -- felt that way. Matters did not end well.

The best guess is the geopolitical argument will carry some weight on Capitol Hill. But unless the TPP negotiators produce a strong jobs-promoting deal, it won't be enough. As a top senate Democrat, Charles Schumer of New York, told the New York Times:

"When the administration sells me on this, it's all geopolitics, not economics: We want to keep these countries in our orbit, not China's. I agree with that. But I need to be sold on the economics." (http://tiny.cc/…)

You have to think a lot of other Congressmen will agree.

Urban Lehner

urbanity@hotmail.com

(CZ)

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Dale Paisley
7/7/2015 | 1:53 PM CDT
As much as it pains me to agree with Obama on anything, I have to this time. I would hope that since Obama is pushing for this, th eDemocrats would at least go along with it if only for the reason that Obama is a Democrat. Since many of the republican congressman and senators represent the agricultural community, I would expect them to also vote for this. It seems to me that passing thiw should be a walk in the park for Obama.