Monday, August 29, 2016

America's Global Trade Blues

Regardless whether Donald Trump losses to Hillary in November, one thing seems clear - America will be lot more hesitant in adopting any more global trade pacts. President Obama has been eyeing 'lame duck' Congressional session [1] to pass both trade deals - TPP with Asian countries which excludes China and the Atlantic trade pact with Europeans.

May be the political reality is finally sinking, as German Vice Chancellor declares the death of Atlantic Trade Pact with America. Sure it can be a part of tactics to put pressure on American Government. But when across the entire political spectrum - from Bernie Sanders to Donald Trump [2] - a sentiment is forming against globalization of which trade pacts are the bulwark; it is inconceivable that even Republican Congress would dare to pass any trade pacts so soon. Quite possibly there will not be any Obama Legacy when it comes to these trade pacts.

As like as other politicians, President Obama thought global institutes and corporations, global financial system, ever increasing international trade and increasing immigration; all would keep the conventional understanding intact - that 'global trade is good'. He never thought he will need to 'sell these gigantic trade pacts' to American Public directly. Like any other politician, he thought a general voter hardly gets excited about the jargon of a trade pact. He concentrated all his energy in selling these pacts to Congress where Republican Majorities made it doable since established GOP is fully behind the ideology of global trade pacts. This all worked until Donald Trump came along. 

Losses inflicted by global trade pacts are much easier, juicy political sell in retail electioneering and that is what Trump is exploiting in his crude ways. To sell positives of trade pact is hard and to sell the argument that 'overall benefits of global trade outwit losses' is even more harder. No contemporary American or global politician is capable of doing that sale; a consummate politician like Barack Obama is no exception. Same goes for the sage of global politics - Angela Merkel who is already fighting the backlash on her immigration policy.

TPP with Asian countries has a strategic rational of 'encircling China' by excluding it from TPP. Clearly as American Politics stumble in not achieving TPP; Chinese President Xi will have the last laugh and signs are all pointing to a strategic loss for America in this regard. Republicans in Congress may be getting the obvious 'strategic value' of TPP against China; but to convince Americans after the campaign of 2016 is going to be hard. I do not see any possibility of Paul Ryan pulling off that feat in Hillary Presidency.

Even after understanding all these opportunity losses, a democratic polity is obliged to consider people's wishes. Right now American Public wants a 'pause' on the trade driven globalization until either most Americans get job opportunities [3] or American Political System has properly sold advantages of Global Trade to American Public. There seems to be no other choice than to stall on these trade pacts for now.

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[1] - In American System, unlike British or Indian system where newly elected house takes effect in matter of days; there are weeks before new Congress members take effect. During that period, the old Congress can still pass bills. That is referred as 'lane duck' session. 

[2] - Hillary has turned against TPP as well, at least in its current form.

[3] - Obama economy has been good for these employment gains even though such gains are at times deadly in America!

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