A few weeks ago, I had the chance to attend an insightful talk by Professor Richard Tanter, a leading analyst on East Asia. In talking about the recent American “pivot” to East Asia and its imminent desire to consolidate an East Asian alliance, Tanter was emphasizing US’s ailing economy and its limited capacity for outreach as a challenge for US foreign policy.
Faced with severe and ongoing budget limitations, Tanter’s analysis struck an accurate chord in underscoring a qualitative change in US foreign policy abroad. Indeed, moving away from a neorealist practice of conducting international affairs, post-crisis economic hurdles are reflective of the current US government’s Liberalist turn. To put it into non-IR terminology: the US is increasingly shifting its focus to building and strengthening economic alliances, rather than military ones.
Particularly in the period after the global financial crisis, perhaps one of the greater, and more worrisome indicators of this qualitative shift of behavior came in the form of yet another WTO-style so-called Free Trade Agreement (FTA). Unmistakably, the Trans-Pacific Partnership Agreement (TPPA), is a mirror image of US financial grievances and associated foreign policy shift.
Before reading deeper into the underlying motives of what is now understood as one of the biggest and most controversial trade agreements to be signed by 12 major countries, it is important to understand the financial hardships on the American front that led to fundamental shifts in conventional foreign policy. Notably, a compelling reminder of the impending American economic problem came last year in the shape of a US budget sequestration. The associated dramatic reductions in expenditure and budget cuts revealed the extent of economic hardships faced by the US. The austerity measures undertaken in 2013 would soon serve to clamp down on the nation’s global aspirations.
The Case of Intervening in Syria
This was perhaps most visible in the unconventional US response to the Syrian uprising that has plagued the country since 2011. The peculiar detachment of the Obama administration to significant instability in the region, which at best bore the marks of decades of American involvement, revealed a systemic unwillingness to directly intervene in geopolitical tensions arising abroad. Amidst a near paradigm shift, this reluctance also signaled to the world the end of hardline American hegemony.
By making it clear that it had no interest in maintaining a physical presence in the face of regional instability and civil war in the Middle East—no doubt seeing the limited possibilities for lucrative business involvement amid regional tensions—the Obama administration began looking farther east to Asia, where more rewarding engagements could be conjured up without the full-fledged commitment that the Middle East had dictated.
Security Commitments in Asia
This is not only true on the Arab front. Faced with a shrinking budget, the US has also substantially downgraded its physical involvement in the Pacific. Indeed, another one of the most recent illustrations of the American economic problem came last month when the Pentagon announced that it would halt the upgrade of Taiwan’s Early Warning Radar Defense Systems supplied by the US, thus breaking a fundamental tradition in the sale of defensive military equipment to Taiwan. This came on the backdrop of recurring price hikes on the exported radar systems, putting further pressures on Taiwanese purchasing power.
This arms trade dynamic reaches back to 1979 when the US signed the Taiwan Relations Act, creating the leeway for the US administration to establish unofficial relations with Taiwan. As a part of the deal, the US military has been exporting cheap radar systems for F-16s to the country, as well as bearing a percentage of the costs for their upscaling. Given this recent blow by the US Air Force, this abrupt termination of US financial aid will mean that Taiwan will have to abandon a major portion of its national missile defense program.
In actual fact, decades of Sino-American relations and an analysis of the US strategic alliance with Taiwan concludes that this latest move by the US military is more indicative of financial instability at home than a newly sprung disinterest in protecting Taiwan against Chinese hard power. The US military, it seems, simply cannot bear the cost of another foreign funding scheme.
These recent developments are connotative of the limitations placed on US influence abroad as well as the effective implementation of its once all-encompassing foreign policy. As such, the question that keeps President Obama awake at night emerges: How will the US afford to maintain power and influence in the Pacific in the face of serious budget restrictions and financial cutbacks?
Part of the answer came in the form of the aforementioned Trans-Pacific Partnership Agreement as Obama’s recent response to ardent criticisms directed at his policy for lacking a rigorous trade agenda. As a signature initiative of the Obama administration, the TPPA has unsurprisingly become an extension of US foreign policy aspirations concentrated on the Asia-Pacific; namely, its “pivot to Asia.”
Underpinned by a shifting conception of foreign involvement, this highly popularized pivot brought with it an important and effective apparatus that has been accurately referred to as “economic statecraft” by the US State Department. It is understood that this tinge of conduct underlies “both harnessing global economic forces to advance America’s foreign policy and employing the tools of foreign policy to shore up [its] economic strength.” This has been the major driver of the TPPA negotiations.
What is the TPPA?
To make this claim requires a brief overview of the agreement itself. To note, the original Agreement, known as the Trans-Pacific Strategic Economic Partnership Agreement, or P4, was intended to introduce profound regional integration among the economies of Brunei, Chile, New Zealand and Singapore. However, faced with the threat of declining global influence, the US was soon on board in 2008, artfully instigating the inclusion of Australia, Canada, Japan, Malaysia, Mexico, Peru and Vietnam.
In its current form, the total gross domestic product (GDP) of the current members of the TPPA is approximately $27.5 trillion, comprising 40 percent of global GDP and one third of world trade. It should then come as no surprise that, in the wake of its massive expansion; the TPPA has experienced a fundamental policy shift that overtly adopted an American template.
This is where it gets sticky. In a sad reminder of the blind orthodox support attached to FTAs, the actual problematic content of the TPPA that has diverged substantially from its original intentions remains overlooked. In a brief overview of its contentious composition, TPPA is disquietingly secretive to the extent that genuine public opinion on its areas of jurisdiction is restricted. For an agreement that holds massive implications on the lives of citizens, the mystery surrounding the negotiation process deems it unacceptably undemocratic and precarious.
To make matters even worse, the negotiation process is bound to a fast track mechanism that expedites precisely this style of confidentiality and removes important Congressional oversight from the negotiations. In this way, fast track effectively delegates exorbitant power to the executive branch in bypassing standard constitutional checks when negotiating international agreements. In other words, the secrecy surrounding the TPPA talks and its eventual approval is dictated by a regulated lack of transparency, public participation and accountability.
The content is not too enticing either. It is now known that the member parties are currently negotiating deals that have a potential to fundamentally change Intellectual Property Rights (IPR) regimes and government-corporate relations. More specifically, chapter 4 of the Agreement deals with IPR regulations where signatory nations are now discussing the adoption of a US-style restrictive IPR regime that permits companies to acquire patents and hold them for longer periods, as well as enabling them to limit the proliferation of important research and development, thus restricting potential positive externalities.
Another problematic clause is the infamous investor-state dispute settlement mechanism that, in principle, erodes the power of state governments to undertake policies that might distort the flow of revenue of corporations. This has proved particularly destructive on the side of the Tobacco and Alcohol Industry suing national governments over policies that regulate the sale, distribution and marketing of its products.
Indeed, these clauses are especially alarming when public health and safety standards are considered. So, how, one may ask, is this in any way related to trade liberalization, reducing tariff and non-tariff barriers and prompting regional economic integration: all 3 things that allegedly constitute TPPA’s, as well as that of FTAs in general, existential purpose?
In fact, it is no secret now that, with the introduction of such controversial chapters, the TPPA currently resembles less a Free Trade Agreement than a biased restrictive regime reminiscent of NAFTA, TRIPS, and other US template-imposed FTAs. In qualifying this, the current Agreement holds a suspiciously small amount of clauses dealing with genuine trade matters such as currency manipulation and sector-specific distortions to unified market access.
What further strikes onlookers observing the TPPA negotiation process is the obvious bias against Chinese business interests hidden in the regulative framework. The recently added competition policy and clauses dictated towards the treatment of state-owned enterprises practically reek of US-style hard disciplining over China’s main sources of global competitiveness. By creating an economic free trade zone in Asia, by and large serving US interests abroad in the region, TPPA seems incrementally posited to act as economic leverage to encircle and contain global Chinese economic power.
Make no mistake; China is not the only recipient of this prototypical bout of ‘competitive imperialism’ where “free trade is subservient to the goal of projecting influence to another country or throughout a region, and checking actual or perceived reciprocal efforts by another power.” Having been used last decade to describe the contest between the US and the European Union (EU) to secure strategic FTAs, the term presently connotes the growing desperation of the US to counteract the rise of the ‘BRICS’ – Brazil, Russia, India, China and South Africa. Although China is preeminent among them, these newly developing countries all become targets to the US’s most aggressive proposals channeled through the Agreement.
In the face of rapidly ailing economic standing and the harsh implications of budget sequestration as an austerity policy, US motivations for joining the so-called economic alliance seem to arise more from a long standing super-power instinct than an unshaken belief in free trade and open markets.
The thing is, the United States can’t afford to maintain a strong and lasting presence in the Asia-Pacific region and as such TPPA serves to further US interests without much military or physical investment and expenditure. Having been framed as a “lame duck president” for failing to push further for stronger trade policies, it is no surprise that President Obama has made the TPPA the frontline of his soft power approach in the Asia-Pacific.
As an answer to the much-noted question circulating around the policy circles; American hegemony is not going anywhere. The era of American military presence may have hit a setback but its wide global aspirations and geopolitical soft power is far from disappearing.