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Tags: Trade | Deal | Asia | Democrats

Trade Deal With Asia Is Inevitable

By    |   Friday, 15 May 2015 10:17 AM EDT

The two most powerful forces that have transformed the world in recent decades have been the expansion of globalization and the information revolution. These two great engines have been chugging away, integrating Asia into the global system and ushering in a digital age that is now invading every corner of life.

Democratic opposition to fast-track trade authority for President Obama is blind to the fundamental reality of this era — you can't turn off the machine.

You can't stop China from growing. You can't prevent Africa from deepening its integration into the global system. These forces, now deeply entrenched, will continue to gain steam. The potential trade deal with Asia, the Trans-Pacific Partnership, could, however, shape these trends in a direction that is compatible with American ideals and interests. That's why congressional — mainly Democratic — opposition is so misguided.

For those who worry that, after the TPP, America would have to compete against low-wage countries — it's too late. As Zachary Karabell notes, we are already living in a free-trade world. The average tariff in the developed world is now about 3 percent. And in the past three decades, developing countries have cut their tariffs substantially as well. The World Trade Organization notes that China's average is less than 10 percent today, down from around 40 percent in 1985.

It's true that trade has stopped accelerating at its once-breakneck pace, but that only makes sense. During the 1990s, whole regions like Eastern Europe and countries like China entered into the global economy. That had a huge, one-time impact on expanding trade. Now countries like Uganda and Ghana are moving into the trading system, but the effects are obviously smaller.

The technology revolution has accelerated globalization as digitized products can be sent back and forth across borders at minimal cost. And almost everything is getting digitized in some sense, as even the taxi industry is now being reshaped by companies like Uber that use big data and smart software.

How would you stop the globalization of digital goods and services? Could you pass a law that says that a lab in New York cannot send your X-ray to a doctor in Chennai for her to read and interpret? Can you prevent an accountant in Manila from preparing your tax returns and sending them to you via email? Whatever you think of these forces, they can be resisted in some places for some time, but look around the world — they keep on rolling.

The United States has one of the world's most open economies. Any trade deal like the TPP is going to open other economies — like Japan or Vietnam — far more than it will America. And the nature of the opening and the new rules will reflect American ideals and interests.

In an essay in Foreign Affairs in 1993 on the North American Free Trade Agreement, Paul Krugman explained that NAFTA was not going to have much of an impact on the vast U.S. economy one way or the other. It was really about foreign policy. The economic effects of NAFTA have been heavily debated, but the foreign policy consequences are clear — and clearly positive.

We forget now, but only three decades ago, Mexico was one of the more anti-American countries in the world. Its politics were a heady mix of resentment, envy, and anger directed against its rich neighbor. Its governing party had a left-wing revolutionary attitude, unalterably opposed to Washington and its foreign policy.

Today, Mexico is a country transformed, unambiguously allied with the United States. Its president, from the same revolutionary ruling party, is resolutely and forthrightly pro-American. It has become a core component of a closely intertwined North American economy that is the world's most vibrant regional bloc. Many factors led to this transformation, but NAFTA was chief among them.

If something similar were to happen with the TPP in Asia, the effects would be even broader. The world we live in is one of rising new powers and declining old norms. The struggle is on to write new rules — for trade, cybersecurity, intellectual property, and much more.

Let's hope we don't look back 20 years from now, when new rules have been written by China, and wish we had been more active and assertive when we had the chance.

Fareed Zakaria hosts CNN's "Fareed Zakaria GPS," and makes regular appearances on shows such as ABC’s "This Week" and NBC's "Meet the Press." He has been editor at large at Time magazine since 2010, and spent 10 years overseeing Newsweek's foreign editions. He is a Washington Post (and internationally syndicated) columnist. He is author of "The Post-American World." For more of Fareed Zakaria's reports, Go Here Now.

(c) 2015, Washington Post Writers Group


Democratic opposition to fast-track trade authority for President Obama is blind to the fundamental reality of this era.
Trade, Deal, Asia, Democrats
Friday, 15 May 2015 10:17 AM
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