What the last four years of a Trump presidency has taught us is that bluster can really reshape the world in all kinds of unpredictable ways. Since the disintegration of the Soviet Union in 1989, the United States has grown accustomed to viewing the world through a myopic singular hegemonic and strategic lens. But for all the years the U.S. spent in strategically trying to crush the Soviet Union, all it took to disintegrate the neoliberal world order was Trump’s pronouncement of “America First” and a pandemic to send the United States into its own American Perestroika. All those years of “cooperation” and “capacity building” to align the global economy with Wall Street free-market objectives ended up collapsing the hegemon in a way that even 9/11 couldn’t.
The America First agenda wasn’t a Trump invention. This was also the rallying cry of the 1953 Bricker Amendment that sought to revise the treaty clause in the Constitution and reduce U.S. international obligations after having ratified the UN Charter.
Trump did succeed, however, in unraveling 70 years of international leadership, and whether that can be restored has yet to be seen.
Without a doubt, since the Marshall Plan, US leadership triumphed in dividing the world to assert its free market objectives. Certainly, the neoliberal propositions put forward by the Washington Consensus in 1989 succeeded at accumulating tremendous wealth and power for corporations and industry leaders, even if the very idea of corporations and investment banks holding the scepter of unipolar rule was pernicious.
Seventy years of US leadership failed to implement just and equitable trade because treating the world as an extension of its own free-market biases has only excluded and displaced the robust potential for the genuine security of peoples and planet.
The economic collapse of 2008 had proved Marx right: that the logic behind the free-market vision of capitalism’s progenitors Adam Smith and David Ricardo was wrong. Neoliberalism may have been the culmination of 250 years of free-market economic maxims and dictums coinciding with the founding of the United States in 1776 and adopted as official economic policy in the late 19th century. That it should have devolved into a cannibalistic frenzy under President George W. Bush, should not be a surprise to anyone. By fostering a free market hothouse in the banking and home-lending industry, these unregulated toxic loans were practiced as if people were never taught not to eat their fellow humans.
Free market capitalism produces cycles of bursts and bubbles while also justifying vile interpretations of our so-called human conditions. Economic historians might not proffer that the success of the US economy had been predicated foremost on the appetite for slavery, genocide, theft, fraud, exclusion and displacement, but they will readily admit that policy safeguards should’ve been implemented as soon as the first blood was drawn. Whatever success capitalism champions, one will inevitably encounter blood-letting policies of land and resource theft, followed by the displacement of peoples and an ailing planet.
The free-market is not the bedrock of the global economy. Trade and supply chains are as old as civilization, and they evolve when necessary. Undoubtedly, technology has sped up international trade, signalling that globalization is very much alive, despite what economic pundits claim. When it comes to neoliberal globalization however, those nails are already in the coffin, and if the Wall Street failures in 2008 didn’t prove that yet, then perhaps Covid-19 will.
Trade is the heart of our economy, and while militaries may serve as the muscle, it is the cooperation and capacity building of relationships that provide the basis for just and equitable trade. A rules-based trade cooperation needs to recognize and account for all the statistical differences between peoples and their interactions with the environment. Seventy years of US leadership has failed to implement just and equitable trade because treating the world as an extension of its own free-market biases has only excluded and displaced the robust potential for the genuine security of our world. To some extent, the 2016 U.S. election results reflected this reality for many American voters who sought something different from what Clinton was promising, and even though Trump may not have had a well conceived plan, he did come in with a sledgehammer.
Biden’s presumptive administration will rebuild upon Trump’s trade debacle, and we are likely to see renewed attempts to realign the cooperation and capacity-building objectives of previous administrations. Unfortunately, due to a lack of progressive imagination, nowhere will this be more evident than with the Trans-Pacific Partnership.
America’s new role in the CPTPP: a counterforce insurance policy.
As a somewhat reductionist narrative, before President Obama formally acceded to the TPP in 2011, it was more of an exploratory agreement, and when signed, it evolved into a bully initiative attempting to force China into US free-market compliance rules.
By 2014, when Brazil, Russia, India, China and South Africa signed the far-reaching anti-neoliberal Fortaleza Declaration, the US transformed the TPP into a containment and obstruction policy against BRICS. Then in 2017, Trump withdrew from the TPP, but continued the containment and obstruction against the backdrop of China’s Belt and Road Initiative, arguably the most ambitious access and infrastructure development scheme ever.
Not wanting to promote any of Obama’s legacy initiatives, Trump withdrew the U.S. from the TPP on his first day in office. In its place, he asserted the Indo-Pacific Quadrilateral Security Dialogue, a defense cooperation between Australia, India, Japan and the United States. What both of these cooperations share is a China containment strategy, but with the Quad, the expense and responsibility for maintaining these objectives would be shared among the various partners. While the TPP cooperation saw an opportunity to be rewarded with new market privileges, the Quad was designed to militarize and provoke.
What is significant about these cooperative partnerships is that size matters. The greater the cooperation and the larger its capacity to influence markets, the more leverage economies have to enforce the rules of trade at the international level.
On November 15th, the Regional Comprehensive Economic Partnership may be signed, thereby creating the largest trade bloc in history. The RCEP is a 15-country deal accounting for about 30% of global trade. If the RCEP is signed, this will fundamentally shift the balance of global trade towards China, which means that many of those USTR bully trade rules may soon slip into oblivion. The sheer size of the RCEP will likely address issues around access to medicines, food safety, global finance, and data protections that will undermine corporate privatization and liberalization, in favor of state regulations.
For example, under the RCEP, ISDS will recalibrate towards the more favorable and reasonable mediation process rather than the draconian arbitration process, meaning that State regulatory bodies are likely to remain intact rather than being trampled upon by corporate interests.
What will engagement with the CPTPP look like for the US?
Biden could try to synergize the Quad with the TPP or try to form an even more belligerent entity, but I would argue that these last four years have catapulted China’s BRI. All the energy that the US has waged by manufacturing propaganda against Huawei, Xinjiang, Hong Kong and debt traps have held little if any results other than lost time, in part because they were largely fabricated, but mostly because what China is offering is concrete and real: win-win.
From an economic standpoint, it is unlikely that Australia or Japan will try to undermine the RCEP or force a military engagement with the Quad. India too, who withdrew from the RCEP is unlikely to provoke further aggression against China, as the US has no teeth at the moment. This is Trump’s lame duck moment and without Trump’s bluster, India too, will likely resume its seat in the RCEP.
The CPTPP members have been trying to keep the US seat warm and even if the Senate green lights the TPP and the US resumes that seat, whatever impact the TPP has will be dependent on its economic strength. For the U.S. and the other CPTPP members the collective economy didn’t look so great as it was heavily debt laden. Now, it is so much worse.
Biden must know that the US is parading in an emperor-with-no-clothes moment in history and the only US asset the bluster can muster is leveraging the military.
China has a functioning economy, a gigantic market, a bold and tenable development and infrastructure strategy, and has essentially overcome the COVID-19 pandemic.
The question remains, will Biden push forward a new Cold War style trade cooperation?
He’ll probably continue with the hawkish South China Sea Freedom of Navigation strategy until ASEAN fully ratifies a China-ASEAN Code of Conduct Agreement. But really, the CPTPP will have little to offer the region except to remain a destabilizing counterforce to the BRI or RCEP, but how long will the US be able to keep up with that charade?
Maybe all that the CPTPP countries want is insurance against a possible Chinese hegemon, despite there being little evidence that that will happen.
Maybe America’s new role in the CPTPP will only be a counterforce insurance policy.