FAILURE TO RATIFY THE TPP WOULD DEAL A BLOW TO U.S. CREDIBILITY IN ITS OWN HEMISPHERE
Fuente: http://www.usnews.com/ By Kezia McKeague/Contributor
After five years of negotiations, the fate of the Trans-Pacific Partnership now rests with the U.S. Congress. Proponents of the ambitious multinational trade deal, which comprises roughly 40 percent of global GDP, have centered their promotion efforts on both its economic benefits and its importance to U.S. geopolitical interests in Asia. Yet the implications for U.S. policy goals in Latin America are no less real. A failure to ratify the pact would represent not only a loss for the world economy, but also a setback for U.S. leadership and credibility in the Western Hemisphere.
At the most basic level, such a failure would damage perceptions of the United States as a reliable partner. The Trans-Pacific Partnership includes four close U.S. trading partners in the Western Hemisphere: Canada, Mexico, Peru and Chile. Policymakers in these countries and others in the region would likely interpret a defeat of the trade deal as symptomatic of Washington's declining interest and ability to lead on promoting international rules and norms.
If the United States cannot meet its commitment on this agreement, counterparts would have little incentive to pay domestic political costs to negotiate with the United States in the future. Each of the signatories made sacrifices in the negotiations, and there is no appetite to reopen them.
Just as U.S. credibility is at stake, so are strategic economic objectives. If Congress fails to pass the deal it will squander the best available opportunity for the United States to liberalize trade, encourage market-oriented reforms and update international trade rules – goals that are currently unattainable at the World Trade Organization or other fora. As the administration's 2015 National Security Strategy stated, "Despite its success, our rules-based system is now competing against alternative, less-open models. … To meet this challenge, we must be strategic in the use of our economic strength to set new rules of the road, strengthen our partnerships, and promote inclusive development." Originally conceived as a pragmatic exercise in trade liberalization in the face of moribund global talks, the Trans-Pacific Partnership meets this challenge with provisions that match the realities of the 21st-century economy, from strong labor and environmental protections to new rules on intellectual property and limits on state-owned enterprises.
The potential impact on Latin America of an abortive ratification process would be particularly magnified in the case of Mexico, the second largest export market and third largest trading partner for the United States. Since the 1994 North American Free Trade Agreement, Mexico has become one of the world's most open economies and a global trading power, boasting a network of free-trade agreements with 44 countries and, most recently, co-founding the Pacific Alliance, a regional integration scheme with Chile, Colombia and Peru.
The Mexican government lobbied hard to join the Trans-Pacific Partnership negotiations in 2012 in order to protect its highly integrated North American supply chains. Mexican diplomats made a compelling argument" that the pact offers an opportunity to upgrade NAFTA and thus deepen North American economic ties without reopening a political Pandora's box. NAFTA has enhanced prosperity through increased trade and investment and lower prices for consumers, but it could not consider technologies, products and trade disciplines that did not exist when the agreement was signed more than 20 years ago.
Conversely, a failure by the U.S. Congress to ratify the deal would miss an important opportunity to modernize the trading framework for North America. The United States has a vital interest in the stability and prosperity of Mexico; membership of NAFTA served that interest and also strengthened Mexico's domestic commitment to open markets. Yet, without the Trans-Pacific Partnership, both Mexico and the United States lose the ability to improve the efficiency of North American supply chains and explore new markets for jointly-produced goods. While the U.S. will remain Mexico's most important export market, the Mexican government and business community would seek to further diversify Mexico's trade relationships. Meanwhile, the Pacific Alliance would continue to lead economic integration in the hemisphere, without the participation of the United States.
A languishing Trans-Pacific Partnership would also negatively affect U.S. interests in non-signatory countries in the Western Hemisphere. For proponents of the agreement, an oft-cited implication is that if the United States fails to write the rules, China will (i.e., with lower standards). In some ways, Brazil is the China of the Western Hemisphere. Although not a geopolitical rival in the same way as China, it is the largest economy in the region yet the most closed to foreign trade. Washington and Brasilia have battled over a variety of irritants, from the U.S. failure to reform its cotton subsidy program to Brazil's imposition of non-tariff barriers, such as import license restrictions and rules of origin requirements. If the United States succeeded in ratifying the Trans-Pacific Partnership, Brazil could face growing isolation and trade diversion. Without it, like-minded countries in the region would miss a chance to present Brasilia with a new and potentially interesting path of joining the economic centers of gravity in a high-standards trading regime.
Ironically, as Washington hesitates over the deal amidst toxic election-year debates on trade, the political moment in Latin America has rarely been more propitious. In 2014, The Economist identified a "continental divide," between the alternative blocs of the Pacific Alliance and the more statist Atlantic-based economics; today, following political shifts in Argentina and Brazil (the latter albeit with an interim government) and the decline of Venezuela's regional influence, that fault line is beginning to fade. The beauty of the Trans-Pacific Partnership is that it is an open platform, with the original parties stating that additional countries will be permitted to accede if they are willing to adopt the same standards. This presents a powerful incentive.
Congressional ratification of the deal is justified on its economic merits and its geopolitical dividends. The alternative adds up to missed opportunities, weakened credibility, and an abdication of U.S. leadership on trade expansion in its own hemisphere.
