Tag Archives: international trade

International Trade

President Obama recently traveled to the east side of the pacific rim for an official visit to several countries including Vietnam and Japan. Conservatives feel that he has not been strong enough with foreign affairs and have therefore labeled his trip an apology tour, as if he is there to apologize for past wars.

Realistically this trip is not about the past but rather signals a recognition of the future and the importance of trade with some of the emerging economies of the region. In the past the far east has been thought of as the place where American jobs have gone. Cheap labor, and fewer regulations means goods are cheaper to produce. The countries then turn around and sell these cheaper goods back to us.

As these eastern economies expand with production and trade, money is put into the hands of a growing middle class which could mean customers for our labor force.

This brings us to a proposed trade agreement called the Trans Pacific Partnership. It involves 12 pacific rim countries. On the western side are Canada, the United States, Mexico, Peru and Chili; on the east, Australia, New Zealand, Malaysia, Brunei, Vietnam, Singapore, and Japan. The foreign ministers of all 12 participant nations signed a draft framework for the trade deal which is meant to reduce tariffs and increase free trade among the partners.

Previous legislation has given President Obama “fast track” authority to negotiate trade deals. The TPP like other trade deals require legislative authorization, but the fast track law means that congress can only vote up or down on a trade deal, rather than endlessly amend or modify a deal.

Considerable controversy surrounds the deal. The left feels that it gives large corporations too much power in trade, at the expense of the environment and worker’s rights. The right, well the right just doesn’t like Obama and is reluctant to give him anything that resembles success. The pressure of an election year only adds to the distrust of the two sides.

Those that do favor the deal suggest that no deal means even less protection for the environment and worker’s rights. The simple fact remains that we live in the time of a global economy. Just because we decide not to participate in trade deals doesn’t mean that the world economy halts. Trade will go on and we will have even less influence.

At the end of World War II, we were the last man standing, the only industrialized economy unscathed by war. Then we could command the global economy. That control has slowly been eroding. Europe, Japan, and now China have expanded their economies and are replacing American goods around the world. Increasingly the pacific rim is becoming a player and if we don’t agree to trade, we will be left further behind.