The Straits Times says

Don't dump multilateral trade pacts

Free trade has a perception problem that is evident everywhere, but nowhere more than in the United States under the Trump administration. It wants to kill off the Trans-Pacific Partnership (TPP) - described as "the most progressive multilateral trade agreement in modern history" by Forbes magazine. The Americans have been generally pro-trade since the end of World War II, yet no major contender spoke up for the TPP during the last presidential election campaign. Instead, trash-talking the trade deal was seen as the means to gaining more votes - a strategy that has paid off for President Donald Trump. Disturbingly, it appears to be not just a tactical but also a philosophical article of faith for him and his advisers.

The Trump view of the world of trade is simplistic: Other countries are "playing dirty"; hence America must put itself first by building walls, bullying US corporations, slapping high tariffs and imposing other restrictions.

Regrettably, the TPP became the emblem of all that is rotten about world trade when it is, in fact, the gold standard for modern trade rules. So, how do people get it so wrong? Blame it on the multifaceted nature of trade and its effects at different levels: global, national, sectoral and individual. Consequently, trade benefits and threats are articulated in different ways to shape perceptions. In the Trump twittersphere, foreigners steal American jobs, cheat by manipulating currencies, dump cheap goods in the US market, distort competition by subsidising state enterprises, thwart American producers via unfair rules, and collectively create an "American carnage".

It is easy to pick isolated examples to support such a narrow view. Much harder is the task of giving the big picture about free trade, against the prevailing mood to find easy scapegoats for globalisation's downsides. The truth is that, on balance, free trade offers win-win solutions by uplifting all countries, whereas protectionism would worsen the so-called carnage by shielding the inefficient and unproductive. Further, tit-for-tat protectionist moves would shrink world trade and prolong economic stagnation.

Mr Trump believes in ditching "lousy trade deals" and working out "one-on-one" bilateral agreements. It is a narrow perspective which ignores the fact that such deals would mean poorer results for the world, compared with multilateral free trade pacts. The TPP, for example, takes account of the digital economy by easing cross-border data flows. In such ways, it does more to create opportunities for small and medium-sized enterprises. The geostrategic importance of the TPP should also not be forgotten as the world's centre of gravity shifts. Admittedly, free trade yields both winners and losers, and ways must be found to spread its benefits more equitably. Dumping the pacts will not benefit anyone.

A version of this article appeared in the print edition of The Straits Times on February 06, 2017, with the headline 'Don't dump multilateral trade pacts'. Print Edition | Subscribe