by ADITYA RAMACHANDRAN ’17, Staff Writer (email@example.com)
In the closing months of 2013, it was widely concluded in international economic circles that the New Year would be a critical one for global trade liberalization. And yet, as a recent Financial Times article stated, sentiments among advocates of free trade in the United States are fluctuating more widely than the “currencies in emerging markets.”
Just earlier this week, the United States Congress offered a rebuke to the White House following the official declaration by Senator Harry Reid, that he was opposed to giving President Obama fast track authority to negotiate trade deals, a power that the President had pushed for just the night before during his State of the Union address.
The importance of this domestic trade divide to the global economy cannot be understated. President Obama’s administration is enforcing a global push in trade liberalization. Tariff slashing trade deals are pending in the Pacific Rim and with Europe, that strategists say are meant to counter the economic rise of China. “China and Europe aren’t standing on the sidelines’ enunciated the President in his trademark baritone voice ‘and neither should we.”
What is significant is that Obama is facing a different sort of opposition following this proposed initiative than usual: one from his own party. Democrats, unlike Republicans, do not favor trade agreements. It can be understood that from their perspective, trade deals benefit corporations which aim to offshore American jobs to low wage Asian countries like India, Vietnam, Nepal and even China. Consequentially, Obama and Senate Democrats could well be facing competing political interests in the year ahead.
Individuals that advocate the notion that protectionist institutions are unsuited for the modern world and that the global economy needs stimulus from anywhere it can get it from. Let me put this issue in global context: influential global statesmen such as David Cameron of Britain among others have backed important pieces of trade legislation such as the Transatlantic Trade and Investment Partnership (TTP) and the Trans Pacific Partnership (TPP)respectively. Though, David Cameron has been spearheading his nation’s exit from the bureaucratic clutches of the European Union, he has been arguably one of the largest individual statesmen backers of the aforementioned partnership with the United States of America. On the other side of the world, Shinzo Abe who is known for his economic policy ‘Abe-nomics’ has stated in no uncertain terms that he depends on the TTP to power important changes in Japanese economic structure.
Furthermore, there is also a geostrategic underpinning to this whole narrative. President Obama’s push for the aforementioned TPP is arguably a reflexive maneuver to the rise of China by building solidarity in the Asia Pacific. Quite frankly, it is a much needed one. In the next few years, China is set to overtake the United States as the largest economy in the world. Only recently, it surpassed the States as the world’s single largest trading nation. Indeed it is increasingly the case that Beijing is in a position to dictate terms to trading partners all around the world, whether in Africa, Asia or South America.
Considering the growing stature of the People’s Republic as an assertive hegemon of sorts, it is urgent that other nations enhance global standards and bind China within a certain institutional legal framework. The failure of the United States to cobble together a political consensus will only confirm suspicions around the world that it is the gentlemen in Beijing who are the masters now. The time for President Obama to make the arguments for agreements like the TTP and the TPP has arrived. Failure to secure the aforementioned fast track would be a truly negative impact to perceptions of his presidency both at home and in the world.