Donald Trump is against the TPP trade pact because he did not negotiate it, but “incompetents" did. Hillary Clinton is against TPP, sort of, at least in its present form, because Bernie Sanders is. Time to take a look at where the national interest might lie, with the help of the 788-page report—"Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors"—just released by the International Trade Commission.
We now know, or think we do, that the contribution of TPP to economic growth here is likely to be trivial: 0.15 percent annually by 2032 reckons the ITC's "dynamic computable general equilibrium model." And the ITC is famously optimistic about such matters and was under pressure from the Obama administration, no respecter of the independence of government agencies, to come up with something that would allow the likely beneficiaries of TPP, such as the Chamber of Commerce, to declare TPP to be "in our national interest." Although the ITC projects a net increase of 128,000 jobs by 2032 (that's about two weeks of job creation at our current pace), it also concludes that the increased intensity of competition with low-wage countries such as Vietnam, President Obama's new friend (see pictures of him posing under a bust of Ho Chi Minh), will cause further job losses in already hard-hit sectors such as manufacturing.
So the relevant economic question is whether the small addition to overall growth, if indeed it materializes, is worth the price paid for that growth by the hardest-hit sectors of our economy. Put slightly differently, should we provide additional ammunition to those who claim the system is rigged in favor of those already doing well and against those who have not shared in the benefits of such income growth as the Obama administration has squeezed out of a stagnant economy? To say the answer is not clearly "yes" (the claim of Obama trade supremo Mike Froman) is to put the conclusion politely. To put it in the more direct terms preferred by Donald Trump, from an economic perspective this deal looks like it was negotiated by incompetents of the most dangerous sort: politicians in search of a legacy item.
But if truth be told, the economic consequences of TPP are less important than its geopolitical consequences. Robert Zoellick, former head of the World Bank, argues in a recent Wall Street Journal op-ed that we must sign TPP to demonstrate to our Asian allies our "steadfastness" in the face of an increasingly belligerent China, an "unpredictable Communist regime in North Korea," and the threat of "the two-way flow of Islamist terrorists between East Asia and the Middle East." He is right—almost. But the question is not whether we must demonstrate "steadfastness." Of course we must, especially given the current administration's demonstration that red lines are meaningless, that it will not effectively oppose Chinese expansion in the South China Sea, and that anyone relying on America to be "steadfast" might profit from a brief conversation with the folks in Crimea, or Iraq, or Afghanistan.
Steadfast we must be. But is TPP the only available or best means of demonstrating that America is and will remain an effective ally that will not yield to Chinese pressure? Surely President Obama's decision to end the arms embargo against Vietnam is the sort of steadfastness that the Chinese regime can understand. Surely stepped up naval operations in the region—with what is left of our navy—including challenges to Chinese territorial claims, is another sort. Surely an affirmative response to Ukrainian and Kurdish fighters' desire for weapons would be noticed in Asian capitals. An appreciation of our steadfastness is more likely to grow out of the barrel of a gun, to use a phrase Chinese rulers will certainly remember, than from our willingness to sign a trade treaty.
Still, it can be argued, and is, that TPP gives us an opportunity to set the rules that will govern trade in 40 percent of the world's output. Not a bad thing—except that the rules include a substantial reduction in American sovereignty. The pro-TPP Office of the U.S. Trade Representative describes the much-debated Investor-State Dispute Settlement clause (ISDS) to be found among TPP's 5,000 pages as follows:
While ISDS does not provide additional substantive rights relative to U.S. law, it does provide an additional procedural right: the right for foreigners to choose impartial arbitration rather than domestic courts when alleging that the government itself has breached its international obligations, whether by discriminating against a foreign investor, expropriating the investor's property, or violating the investor's customary international law rights.
In short, foreigners can sue our government, and perhaps win large tax-payer-funded damage awards, without the bother of taking their claims to a U.S. court. Although the procedure established for selecting the panel of arbitrators—the complaining foreign investor selects one, the host government the other, and those two agree on a third who will chair the panel—is the normal one in commercial disputes, there is a difference: The international panel replaces U.S. courts as the final arbiter of these disputes.
So the policy question becomes: Is TPP sufficiently likely to permit America to set the trading rules in the Asia-Pacific region, and is that ability of sufficient value for us to cede such control of our economic life to still another international body? It's a hard sell. We shouldn't be surprised that this deal finds so few friends among those facing the voters this fall.