ONCE AGAIN, OBAMA WAS PLAYING CHESS, WHILE TRUMP PLAYS CHECKERS

…Apple manufacturing operation in China

 

The TPP was more about S.E. Asian countries following US rules, not China’s, for manufacturing, and intellectual property. 

 

OK, it’s time for “President Falsehood” to stop selling his jobs programs by saying that the Trans-Pacific Partnership (TPP) was such a bad trade deal.

 

As you may recall, former President Obama was many times found to be playing chess, while his opposition was playing checkers.  Obama was a strategic thinker, Trump has no idea of what "strategy" even means.

 

The TPP agreement was never meant as a great jobs program that would greatly increase the American economy.  That was never the reason for pursuing such an agreement.

 

Now that Trump is at the helm of the country, he doesn’t even understand that in one of his very first actions as the chief executive, he just killed the program that had little to do with jobs or our economy.  It was instead a geopolitical move that would have put an American foot firmly in China’s back yard.

 

With Trump’s knee-jerk move to pull the US out of the TPP, he just basically forfeited to communist China the next global area of anticipated major economic growth.

 

According to The US International Trade Commission, the estimates were that the TPP would only have raised America’s inflation-adjusted incomes only 0.23% between now and 2032.  That’s pretty close to zero.

 

But the TPP was never about increasing our GDP or for creating jobs or reducing tariffs.

 

The chess game of the TPP was about having other countries follow US rules for patents and intellectual property.  It was for raising prices for Asian consumers and yes, some profits for American companies. In all likelihood, it wouldn't change our jobs picture very much at all.

 

The TPP was about the US being in China’s backyard, and about writing the trade rules so China couldn't.  Granted it would not deal with keeping different countries from manipulating the value of their currancy, which is what all the US manufacturers would have wanted.  But then again, that was not the purpose of the agreement.

 

This deal was designed for setting up a system to promote prosperity abroad so fragile democracies could resist Communist China’s pressures.  As of today, due to Trump’s actions, China now has an open field to take all those small countries that offer all their low-cost wages, and to put pressure on them to accept China’s way of developing their economies.

 

Had the US not taken a similar approach for the rebuilding of Western Europe after WWII, the then Soviet Union might have taken over some those economies.  Even after the Berlin Wall came down, European markets were still way off from being totally open.  But by the US making separate deals with the different western European countries, it not only helped open up their markets, it also rewarded those same countries for reforming their economies under US directions.

 

Now, don’t get me wrong.  The US has more than once gotten itself into serious trouble by making poor trade deals.  We are all aware of the “giant sucking sound” we heard from all the jobs that moved south of the border due to Bill Clinton’s NAFTA agreement.  And who could forget when President George W. Bush granted China, Permanent Normal Trade Relations status in 2000.  That alone really did give US companies the go-ahead they needed for shifting their production to China on a massive scale.  This was because all those US manufacturers no longer had to worry about the risk of foreign tariffs rising their manufacturing costs.

 

Oh yes, the US has “screwed the pooch” more than once with making bad trade deals.  But now, we’ll never know if Obama’s chess game was as good of an idea as was expected.

 

It is important to understand that with a president like Donald Trump, the US won’t even try to lead on trade anymore. Trump doesn't see trade deals as a way to win friendly nations and to influence their people.  Trump wants deals for winning US manufacturing jobs, but mainly for increasing his personal approval ratings.

 

Trump has yet to understand that even if he is successful at getting those manufacturing jobs back in the US, those jobs have changed.  The factories that once required 3000 workers, are all now automated and only need 30 to 300 employees.

 

By pulling out of the TPP, it just leaves a very wide opening for other countries like China to negotiate where the US now isn’t going to be.  The risk is that more globalization, which is inevitable, will not be proceeding on US terms or even with US values.  And there’s an even greater danger: New trade deals might not help that much, but unraveling the old ones could seriously hurt.

In the end, the US won't have the luxury of wondering whose globalization we might have influenced…?  The answer will probably be that the US will have influenced no one’s economies, and then the whole world will just be that much poorer for it.

 

Copyright G.Ater  2017