You can’t stop the trade machine
By Fareed Zakaria
Thursday, May 14, 2015
The two most powerful forces that have transformed the world in recent decades have been the expansion of globalization and the information revolution. These two great engines have been chugging away, integrating Asia into the global system and ushering in a digital age that is invading every corner of life. Democratic opposition to fast-track trade authority for President Obama is blind to the fundamental reality of this era: You can’t turn off the machine.
You can’t stop China from growing. You can’t prevent Africa from deepening its integration into the global system. These deeply entrenched forces will continue to gain steam. The potential trade deal with Asia, the Trans-Pacific Partnership, could, however, shape these trends in a direction that is compatible with American ideals and interests. That’s why congressional — mainly Democratic — opposition is so misguided.
For those who worry that, after the TPP, the United States would have to compete against low-wage countries — it’s too late. As Zachary Karabell notes, we are already living in a free-trade world. The average tariff in the developed world is about 3 percent. And in the past three decades, developing countries have cut their tariffs substantially as well. The World Trade Organization notes that China’s average is less than 10 percent today, down from about 40 percent in 1985.
It’s true that trade has stopped accelerating at its once breakneck pace, but that only makes sense. During the 1990s, regions such as Eastern Europe and countries such as China entered into the global economy. Those events had a huge impact on expanding trade. Now countries such as Uganda and Ghana are moving into the trading system, but the effects are smaller.
The technology revolution has accelerated globalization, as digitized products can be sent across borders at minimal cost. And almost everything is getting digitized in some sense, as even the taxi industry is being reshaped by companies such as Uber that use big data and smart software. How would you stop the globalization of digital goods and services? Could you pass a law that says that a lab in New York cannot send your X-ray to a doctor in Chennai for her to read and interpret? Can you prevent an accountant in Manila from preparing your tax returns and sending them to you via e-mail? Whatever you think of these forces, they can be resisted in some places for some time, but look around the world — they keep on rolling.
The United States has one of the world’s most open economies. Any trade deal like the TPP is going to open other economies — the Japanese or Vietnamese, for example — far more than the American. And the nature of the opening and the new rules will reflect American ideals and interests.
In an essay in Foreign Affairs in 1993 on the North American Free Trade Agreement, Paul Krugman said that NAFTA was not going to have much of an impact on the vast U.S. economy one way or the other. It was really about foreign policy. The economic effects of NAFTA have been heavily debated, but the foreign policy consequences are clear — and clearly positive.
We forget now, but only three decades ago, Mexico was one of the world’s most anti-American countries. Its politics were a heady mix of resentment, envy and anger directed against its rich neighbor. Its governing party had a left-wing revolutionary attitude, unalterably opposed to Washington and its foreign policy.
Today, Mexico is transformed, unambiguously allied with the United States. Its president, from the same revolutionary ruling party, is resolutely and forthrightly pro-American. It has become a core component of a closely intertwined North American economy that is the world’s most vibrant regional bloc. Many factors led to this transformation, but NAFTA was chief among them.
If something similar were to happen with the TPP in Asia, the effects would be even broader. The world we live in is one of rising new powers and declining old norms. The struggle is on to write new rules — for trade, cybersecurity, intellectual property and much more. Let’s hope we don’t look back 20 years from now, under new rules written by China, and wish we had been more assertive when we had the chance.
© 2015, Washington Post Writers Group