TPP-Negotiating Process: Who’s "Us" And Who’s "Them?"

-by emorej a Hong Kong

“China” is everybody’s ultimate answer to most questions about the TPP. Obama’s closing argument is:

“the rulebook is up for grabs. And if we don’t pass this agreement-- if America doesn’t write those rules-- then countries like China will.”

But what does “China... write... rules” really mean? And what does it obscure?

Intended meaning of Obama and others who reference “China”:

• A clear meaning is that: China is welcome to join a previously-established TPP, just not welcome to participate directly in negotiating its initial details.

• A clearly intended implication is that: The main opposing interests relevant to the TPP are American interests (which are being advanced the most by the negotiating path being taken) vs. Chinese interests (which would be advanced more by the alternative negotiating path not being taken).

Much is obscured by the above rhetoric, including the following:


 Background Structures


• Each of America’s elite and China’s elite now faces the question of how to best preserve its economic and political dominance achieved in a separately evolved system which now has become inter-dependent with the other, and is fast merging with the other.


• Inter-dependency is demonstrated by the share of American wealth that depends on production and/or sales in China, and the share of Chinese wealth that depends on investment and/or sales in America.


• Merging of previously separate systems is demonstrated by a feedback loop of globalizing communications, transport and transactions, as the same global prices and resource constraints guide the perspective and actions of every economic actor, from American soybean farmers, to Chinese smartphone assemblers, to aspiring software app developers of any nationality or location.


• Merging of elites is even more advanced, as demonstrated by the tendency of China elite family-members to hold American real estate, university degrees, passports, spouses and/or positions in elite American organizations (especially in America-headquartered global investment banks).


• Merging of elites is both a consequence and a further catalyst of the systems’ inter-dependency and merger, serving: 


(a) to improve each elite’s mix of opportunities and risks,

(b) to increase the influence that each elite increasingly shares with the other, and

(c) to increase their shared incentives to accelerate and deepen the systems’ merger.

Background Perspectives

• The above structural changes and trends help us appreciate that “the rulebook” is mainly to govern the transition to full systems’ merger, and to continuation of domination by merged elites, rather than to govern the (increasingly imaginary) competition between countries.


• Regardless, most Americans are instinctively sympathetic to an argument that any rulebook is best not written by China. Before acting on this instinct, however, it is useful to look more closely at the perspective of most Chinese.

• China’s most recent century-long transitions through civil war, Mao-inspired chaos, effective martial law, and finally crony-capitalism verging on kleptocracy, have created a very cynical populace. Although China’s elites produce much ideological propaganda, most people in China recognize this as fictitious window dressing of a domestic system maintained mainly through carrots of economic rewards, and sticks of threatened (and sporadically implemented) police and military repression. Americans tend to focus on these Chinese government-to-populace sticks, but the carrots are also very important, and the need to deliver the carrots is a major constraint on the Chinese government’s freedom of action.


• Cynicism does not prevent the Chinese populace from responding emotionally to appeals to national pride. It should be easy to understand why Chinese have a somewhat sensitive national pride, in light of China having only in recent decades recovered much national power and prestige after a long period of decline and suffering from foreigners’ incursions.


• Provoking anti-foreign nationalism is the main tool available when Chinese elites need to distract the populace whenever the government needs breathing space in order to conform its mix of carrots and sticks with changing popular demands. (In comparison with America, China does not have a domestic “other,” on the scale of the African-American or Latino-American populations, available to be targeted for the purposes of this kind of distraction).


• Each upsurge, of China’s anti-foreign nationalism, tends to militate against international collaboration, although there is also a countervailing desire, for national prestige through ‘club membership,’ as an after-effect of the multi-decade insult of the “China” seat in the United Nations having been denied through American support for the Taiwan holed-up “Chinese” Nationalist government that had lost the civil war on China’s mainland.

Consequences


 • China’s elites do not have enough other sources of popular legitimacy to voluntarily give up easy access to the tool of provoking anti-foreign nationalism.


• The easiest way for China’s elites to sell TPP entry to their populace will be to later frame it as a “prestigious and profitable club from which China is being disrespectfully excluded.”

• At present, China’s elites do not have strong enough sticks to persuade the cynical Chinese populace to passively accept ‘carrots-later’ deferred gratification through arguments like the following:

• A general law of economics is that ‘a rising tide will raise all boats’ if we stimulate economic efficiency through global free competition;
• Our country’s government is willing and able to evaluate complicated details, and to negotiate for them to yield the greatest benefits, and lowest attainable risks, for the greatest number of our compatriots;
• If any of our compatriots loses jobs or profits to this global competition, then our government will be willing and able to redress this through later-decided and later-funded adjustment assistance;
• In order to squeeze the most concessions out of other countries’ negotiators, our government must agree in advance to a quick and clean up-or-down vote (without normal opportunities for filibustering, adding riders, etc.).

• The only question is: 
can any other big country's populace be persuaded to accept these arguments? 
Unfortunately, the answer in the country with the biggest economy and global influence (I’ll give you one guess which one) is probably: 
“yes,” especially if that populace can be mollified by further arguments (express or implied) like the following:

• No citizens have been entirely excluded from the decision-making process (because each citizen’s voice is taken into account in each election).
• Sell-outs by politicians are constrained by fear of voter revenge (because what politician wouldn’t prefer to stay in public office rather than retire to a well-paid networking position?).
• Our pride says we can out-compete foreigners (or at least prevents us from admitting our fear that we cannot).
• Any politician who needs to distract us from economic sticks and carrots does not need to provoke us against foreigners, because it works even better to provoke us against domestic racial minorities and immigrants.


CONCLUSION:


• The main opposing interests relevant to the TPP are not “American vs. Chinese,” but rather are:


(i) those of both the American and Chinese 1%, vs.

(ii) those of the American and Chinese 99%.


• The sequence of 


(i) first America to negotiate and approve; and

(ii) then China to join



 is the path of least resistance to institutionalizing 


(i) benefits for both the American 1% and Chinese 1%, and

(ii) detriments to both the American 99% and Chinese 99%.

• If Americans can pressure Congress into rejecting the current TPP, then the eventual result is likely to be:


(i) not (as threatened) a Chinese-written TPP detrimenting all Americans; but

(ii) rather (in reality) a more 99%-respectful trade, investment and employment regime both in the USA and globally.

UPDATE: TPP As An Election Issue
by Howie

Yesterday Jimmy Panetta, breaking with retiring incumbent Sam Farr and his own dad, former Congressman Leon Panetta, declared that he is opposed to the TPP.

The one potential 20th CD candidate who could give Panetta a serious run for his money-- Democratic state Senate Majority Leader Bill Monning-- is a strong ally of the labor movement, which is implacably opposed to the TPP; Monning’s own fervent opposition might have helped to rally troops and raise money in a potential congressional race.

On Tuesday in front of the bayside Custom House in Monterey, Panetta the Younger deftly throttled the issue. "Based on my initial understanding and what I have read, it appears that right now I’m against it, I’m leaning towards against it."