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Isn't this what TPP was supposed to solve? It's ironic that the Trump admin killed Obama's China containment strategy, only to try to implement it in a half ass

Isn't this what TPP was supposed to solve? It's ironic that the Trump admin killed Obama's China containment strategy, only to try to implement it in a half assed way without any allied alignment. Also doesn't help Trump is a highly polarizing figure. Pretty much describes the Trump admin in a nutshell. Whatever Obama did, get rid of it, regardless of its value, then implement a worse solution instead.

mdorazio 7y ago
I'm not sure how TPP was supposed to be a China containment strategy. I've heard this said a few times, but the explanations for how it was supposed to work always seemed like hand-wavey versions of "well, it would make US partnerships with non-China countries stronger and that would somehow contain China".
- jorblumesea 7y ago
  It would have pretty much locked China out of the domestic markets of many Southeast Asian countries and closely coupled their economies to the US, making it harder to do business with China. It's basically what China does today with their neighbors. Economic integration -> domestic power.
  - mdorazio 7y ago
    Again, I'm not sure how TPP was actually supposed to accomplish what you're saying. As far as I know, TPP didn't restrict participants from trading with China, and it's not clear to me what would have economically discouraged them from doing so. Maybe I'm wrong - I genuinely want to know.
    - jorblumesea 7y ago
      The text of the TPP basically ensured a "special trade relationship" between signers that outside, non-singers, would not be able to compete with. I would re-read the text of the TPP and see for yourself. It was basically a group trade agreement that guaranteed favorable exchanges. It's not that technically, they wouldn't be able to trade with China, but practically speaking, there was little chance.
      - nl 7y ago
        The text of the TPP basically ensured a "special trade relationship" between signers that outside, non-singers, would not be able to compete with. It's not that technically, they wouldn't be able to trade with China, but practically speaking, there was little chance. This isn't true. Australia's biggest trading partner is China and there was no chance the TPP was going to stop that trade. It was aimed at China, but not like this at all. read my other comment: https://news.ycombinator.com/item?id=22322371 https://news.ycombinator.com/item?id=22322371
      - mdorazio 7y ago
        I did read the text of TPP and it still isn't clear how it would have guaranteed that signers would not continue trading in large part with China. What I'm looking for is an actual economic analysis showing that TPP would have made it so that not trading with China carried a significant cost benefit in comparison to utilizing its market efficiencies and lower costs. I've yet to see such an analysis from a credible source, so I'm still working under the assumption that signers would have continued trading with China without any significant checks on its economy or policies.
        nl 7y ago
        I don't think anyone credible ever thought it would stop trade with China. I think the dependency argument is more that if there is more trade between countries within the TPP system, it would have given China less policy strength because countries aren't as dependent on it. If a country makes a large amount of their export income from a single source they are very vulnerable to policy blackmail by that country.
      - iamnothere 7y ago
        "Favorable" for multinationals in that ISDS claims would allow companies to circumvent regulations and target economically vulnerable areas: https://www.huffpost.com/entry/isds-lawsuit-financing-tpp_n_57c48e40e4b09cd22d91f660 https://www.huffpost.com/entry/isds-lawsuit-financing-tpp_n_... It was also hostile towards government efforts to require source access, which interferes with the right to repair: https://www.fsf.org/blogs/licensing/time-to-act-on-tpp-is-now-rallies-against-tpp-in-washington-d-c-november-14-18 https://www.fsf.org/blogs/licensing/time-to-act-on-tpp-is-no... The TPP was a handout to multinationals and an attack on workers across the US and Pacific. It's a good thing that it didn't come to fruition.
- nl 7y ago
  The TPP was absolutely designed to be a China containment strategy. The idea was to reduce trade barriers within the Pacific region, which would make trade there cheaper and hence more attractive vs China. Specifically, lower wage countries (Malaysia, Vietnam, Mexico) would have been more attractive as outsourcing locations compared to China, and in return good and services from high wage countries would have been cheaper in those countries making them more attractive compared to Chinese competitors. As a specific example, most industrial machinery imported to Vietnam is subject to a 20% import tariff[1]. This means US companies like Caterpillar and GE are relying on political intervention to win deals[2], instead of being more competitive on price. [1] https://www.customs.gov.vn/SitePages/Tariff-Search.aspx?portlet=DetailsImportTax&language=en-US&code=40118021&searchTerms=englishDescription%3dmachinery https://www.customs.gov.vn/SitePages/Tariff-Search.aspx?port... [2] https://www.thegazette.com/subject/news/nation-and-world/us-companies-general-electric-co-and-caterpillar-inc-sign-billions-in-deals-with-vietnam-20170531 https://www.thegazette.com/subject/news/nation-and-world/us-...
  - mdorazio 7y ago
    Right, but you need to show that knocking down tariffs like the Vietnam one would actually directly result in more non-Chinese trade. I can pretty much guarantee that even without the 20% tariff, US imports would still be far more expensive than Chinese equivalents. Do you have any economic analysis articles or papers you can point me to that model the expected impacts based on actual market prices and labor costs?
    - nl 7y ago
      Sure. Here's one on a potential free trade agreement between the US and Malaysia[1] (which is another TPP nation) that calculates direct changes: As shown, following a free trade, the Malaysia’s export to the USA would increase by USD 30984 million or 7 percent and the US export to Malaysia would increase by USD 16051 million(22 percent). The substantial increase in the volume of export between two countries is due to removal of trade barriers. The higher increase in the US export to Malaysia relative to the Malaysia export to the US is because Malaysia currently has a higher tariff than the US. Worth noting that it's absolutely unclear if it would have worked, but how TPP was supposed to be a China containment strategy is clear (which was your original question). [1] http://www2.southeastern.edu/orgs/econjournal/index_files/JIGES%20JUNE%202013%20yaghoob%20&%20Jamal%2010-27-2013%20R1.pdf http://www2.southeastern.edu/orgs/econjournal/index_files/JI...
lanternslight 7y ago
Obama's TPP would have given more of an edge to the Chinese. It was a bad deal.

mdorazio 7y ago

I'm not sure how TPP was supposed to be a China containment strategy. I've heard this said a few times, but the explanations for how it was supposed to work always seemed like hand-wavey versions of "well, it would make US partnerships with non-China countries stronger and that would somehow contain China".

jorblumesea 7y ago
It would have pretty much locked China out of the domestic markets of many Southeast Asian countries and closely coupled their economies to the US, making it harder to do business with China. It's basically what China does today with their neighbors. Economic integration -> domestic power.
- mdorazio 7y ago
  Again, I'm not sure how TPP was actually supposed to accomplish what you're saying. As far as I know, TPP didn't restrict participants from trading with China, and it's not clear to me what would have economically discouraged them from doing so. Maybe I'm wrong - I genuinely want to know.
  - jorblumesea 7y ago
    The text of the TPP basically ensured a "special trade relationship" between signers that outside, non-singers, would not be able to compete with. I would re-read the text of the TPP and see for yourself. It was basically a group trade agreement that guaranteed favorable exchanges. It's not that technically, they wouldn't be able to trade with China, but practically speaking, there was little chance.
    - nl 7y ago
      The text of the TPP basically ensured a "special trade relationship" between signers that outside, non-singers, would not be able to compete with. It's not that technically, they wouldn't be able to trade with China, but practically speaking, there was little chance. This isn't true. Australia's biggest trading partner is China and there was no chance the TPP was going to stop that trade. It was aimed at China, but not like this at all. read my other comment: https://news.ycombinator.com/item?id=22322371 https://news.ycombinator.com/item?id=22322371
    - mdorazio 7y ago
      I did read the text of TPP and it still isn't clear how it would have guaranteed that signers would not continue trading in large part with China. What I'm looking for is an actual economic analysis showing that TPP would have made it so that not trading with China carried a significant cost benefit in comparison to utilizing its market efficiencies and lower costs. I've yet to see such an analysis from a credible source, so I'm still working under the assumption that signers would have continued trading with China without any significant checks on its economy or policies.
      - nl 7y ago
        I don't think anyone credible ever thought it would stop trade with China. I think the dependency argument is more that if there is more trade between countries within the TPP system, it would have given China less policy strength because countries aren't as dependent on it. If a country makes a large amount of their export income from a single source they are very vulnerable to policy blackmail by that country.
    - iamnothere 7y ago
      "Favorable" for multinationals in that ISDS claims would allow companies to circumvent regulations and target economically vulnerable areas: https://www.huffpost.com/entry/isds-lawsuit-financing-tpp_n_57c48e40e4b09cd22d91f660 https://www.huffpost.com/entry/isds-lawsuit-financing-tpp_n_... It was also hostile towards government efforts to require source access, which interferes with the right to repair: https://www.fsf.org/blogs/licensing/time-to-act-on-tpp-is-now-rallies-against-tpp-in-washington-d-c-november-14-18 https://www.fsf.org/blogs/licensing/time-to-act-on-tpp-is-no... The TPP was a handout to multinationals and an attack on workers across the US and Pacific. It's a good thing that it didn't come to fruition.
nl 7y ago
The TPP was absolutely designed to be a China containment strategy. The idea was to reduce trade barriers within the Pacific region, which would make trade there cheaper and hence more attractive vs China. Specifically, lower wage countries (Malaysia, Vietnam, Mexico) would have been more attractive as outsourcing locations compared to China, and in return good and services from high wage countries would have been cheaper in those countries making them more attractive compared to Chinese competitors. As a specific example, most industrial machinery imported to Vietnam is subject to a 20% import tariff[1]. This means US companies like Caterpillar and GE are relying on political intervention to win deals[2], instead of being more competitive on price. [1] https://www.customs.gov.vn/SitePages/Tariff-Search.aspx?portlet=DetailsImportTax&language=en-US&code=40118021&searchTerms=englishDescription%3dmachinery https://www.customs.gov.vn/SitePages/Tariff-Search.aspx?port... [2] https://www.thegazette.com/subject/news/nation-and-world/us-companies-general-electric-co-and-caterpillar-inc-sign-billions-in-deals-with-vietnam-20170531 https://www.thegazette.com/subject/news/nation-and-world/us-...
- mdorazio 7y ago
  Right, but you need to show that knocking down tariffs like the Vietnam one would actually directly result in more non-Chinese trade. I can pretty much guarantee that even without the 20% tariff, US imports would still be far more expensive than Chinese equivalents. Do you have any economic analysis articles or papers you can point me to that model the expected impacts based on actual market prices and labor costs?
  - nl 7y ago
    Sure. Here's one on a potential free trade agreement between the US and Malaysia[1] (which is another TPP nation) that calculates direct changes: As shown, following a free trade, the Malaysia’s export to the USA would increase by USD 30984 million or 7 percent and the US export to Malaysia would increase by USD 16051 million(22 percent). The substantial increase in the volume of export between two countries is due to removal of trade barriers. The higher increase in the US export to Malaysia relative to the Malaysia export to the US is because Malaysia currently has a higher tariff than the US. Worth noting that it's absolutely unclear if it would have worked, but how TPP was supposed to be a China containment strategy is clear (which was your original question). [1] http://www2.southeastern.edu/orgs/econjournal/index_files/JIGES%20JUNE%202013%20yaghoob%20&%20Jamal%2010-27-2013%20R1.pdf http://www2.southeastern.edu/orgs/econjournal/index_files/JI...

lanternslight 7y ago

Obama's TPP would have given more of an edge to the Chinese. It was a bad deal.