Adjunct Professor Matthew Gold appeared on Bloomberg Daybreak: Asia to discuss the trade war between the U.S. and China, and how being part of the TPP could help negotiations and the rise of China as a superpower.
The TPP, the Trans-Pacific Partnership served many important purposes for the United States. One of the biggest is that it really put China in a corner and it gave the United States great leverage for future trade negotiations with China. It was made of twelve countries, all of which touched the Pacific, but it was also designed for more countries who touched the Pacific to join the agreement. It had a whole accession process by which new countries could join and every country that touched the Pacific Ocean was lining up to join it, except Russia, China, and North Korea. Even India and Pakistan were sending signals they wanted to join it, they don’t touch the Pacific, and what would have happened is within a relatively short period of time, every country touching the Pacific besides those three—China, Russia, and North Korea—would have been in the agreement or in the process of joining the agreement and the Chinese would have had absolutely no choice but to join it themselves. That would have put the United States in a position where the U.S. holding the key to China’s entry (China cannot enter the TPP without U.S. approval), could have sat down and could have had tremendous leverage in insisting that China bring itself into compliance with all of its World Trade Organization obligations to the United States before even talking about entering into an additional TPP trade agreement with the United States. That leverage was leverage that the Obama administration spent eight years of painstaking negotiations for the TPP to create and to have over China, or at least for the next president to have over China, and then President Trump withdrew the United States from the TPP on his first full business day in office, not even beginning to comprehend the implications of what he was doing and that was only one negative implication of us pulling out of the TPP.