US Undersecretary of Commerce for International Trade Stefan Selig made a strong pitch for the Trans-Pacific Partnership (TPP).
US Undersecretary of Commerce for International Trade, Stefan Selig, made a strong pitch for the Trans-Pacific Partnership (TPP), underscoring its importance not only for the U.S. but also for world trade, which stood to benefit as trade barriers are dismantled and borders between the trading partners become irrelevant.
“The importance of the TPP cannot be overstated … it is a 21st century trade agreement,” Selig told the American Journal of Transportation on the sidelines of an event held on May 16 at the Baruch College in New York to mark the World Trade Week NYC where international trade awards were given to recipients for their outstanding work in their respective business. “The TPP is President Obama’s rebalance to Asia,” Selig said, emphasizing that the TPP would be passed amid consternation over opposition to the TPP agreement expressed by both the presumptive Presidential nominees, Republican Donald Trump and Democrat Hillary Clinton.
The TPP is a free trade agreement between 12 countries: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. All 12 TPP countries are members of the Asia-Pacific Economic Cooperation (APEC). The TPP agreement, concluded on October 5, 2015 in Atlanta, Georgia, was formally signed on February 4, 2016 in Auckland, New Zealand.
“I have 50 persons on my team who are 100 percent devoted to the TPP. While I am not going to comment on the statements made by the various political candidates, one should realize that this is an election season … electoral politics is not reflected in policies,” he said.
Selig, intimately familiar with Asia, pointed out that President Obama will soon be travelling to two TPP member states Vietnam and Japan from May 21-28. This trip will highlight the President’s ongoing commitment to the U.S. rebalance to Asia and the Pacific, designed to increase U.S. diplomatic, economic, and security engagement with the countries and peoples of the region. The President will first visit Vietnam, where he will hold talks with Vietnam’s leadership on intensifying cooperation under the U.S.-Vietnam Comprehensive Partnership across a wide range of areas; he will also meet with members of civil society, the Young Southeast Asian Leadership Initiative, entrepreneurs, and the business community. In Japan, the President will participate in his final G-7 Summit in Ise-Shima. The TPP will figure prominently in the President’s talks in both countries.
When it was pointed out to Selig that Asian member states were confused by the signals emanating from the U.S. on the TPP’s fate, going by the statements of leading politicians opposing the TPP, Selig said that “everyday we wait and don’t take action on the TPP, it costs Americans money. These delays cannot be justified”.
The TPP, Selig averred, would constitute a benchmark achievement, because it would raise standards for various aspects of trade which all the member states would have to comply with and work in tandem with each other, adapting their practices to the high standards on which the partnership would be built. Some of the issues on which the TPP member states would become compliant include intellectual property rights, labor and human rights, environmental protection, ethical use of sources, fair competition (a euphemism for eliminating practices such as currency manipulation and dumping which the U.S. steel industry laments is happening with China’s massive oversupply to the U.S. market), etc.
The formation of the TPP contours seems to have also spurred China into pushing for its own “TPP version”, better known as the Regional Comprehensive Economic Cooperation (RCEP) though skeptics scoff at the latter because of its “much lower standards”. The RCEP sets the bar low and accepts that countries will reduce trade barriers at different rates—especially among less developed members—and also makes limited demands for regulatory harmonization.
The TPP is open to new entrants already, as will the RCEP be in the future. More importantly, neither agreement restricts participants from joining other trade groupings. Nonetheless, it is hard to ignore the fact that the China-supported RCEP does not presently involve the United States and the US-led TPP efforts presently do not include China. And while China is not excluded from the TPP in principle, the regulatory emphasis of the arrangement makes China a less likely candidate to join.
The U.S. administration is also eyeing another giant, India, to eventually join the TPP, though both U.S. and Indian officials are tight-lipped about it. However, U.S. officials have supported India’s membership in the over-arching Asia Pacific Economic Cooperation (APEC) and that could be a route India could follow to eventually land up at the TPP table. The U.S. side is having a continuous dialogue and, as Selig put it, “we are talking about issues of mutual interest”.
Earlier in his address to the gathering at the World Trade Week Awards event – several Asian trade promotion agencies and U.S. organizations showcased their products and services at the accompanying Expo – Selig reminded that in the six years since 2009, when the U.S. climbed “out of the deepest crater of the economic crisis”, the United States had produced its highest levels ever for annual exports, jobs supported by exports, and real manufacturing output.
Apparently alluding to those who were critical of foreign trade, which for some is becoming a synonymous with rising imports, Selig said that foreign direct investment was a key driver of that recovery. The U.S., in the same period, saw its cumulative FDI increase year after year.
“… we would see a record 6.1 million Americans directly employed by U.S. subsidiaries of foreign firms, and another 6 million American jobs indirectly attributed to FDI,” he said.
He said that the New York metropolitan area had advanced to become “either the 1st or 2nd largest goods export hub in the country”. In 2014 merchandise exports from this area topped $105 billion. “And it is worth noting here that 98% of the goods’ exporters in the metro area are small and medium-sized enterprises, representing more than 32,000 businesses,” he said.
In his address, Selig also touched on the “disappointing and, frankly, distortive criticisms” regarding trade and, in effect, the TPP. “That includes the rise of protectionist rhetoric and with it the mistaken, defeatist refrain that trade and investment is a path to American decline and a threat to American leadership,” he said, adding that because TPP will be an “expression of our country’s leadership”.
Other speakers at the World Trade Week NYC 2016 included Maria Torres-Springer, President, New York City Economic Development Corporation, Molly Campbell, Port Director, Port Authority of NY & NJ (PANYNJ), and Chuck Ludmer, Principal, Chief Marketing and Practice Development Officer, all of whom echoed the view that world trade was an important element in economic development. PANYNJ representatives told the American Journal of Transportation that world trade was very important for the economy and “transportation is key to world trade”. “Indeed, trade and transportation go hand in hand,” they said.