The right Asian deal

HO CHI MINH CITY, Vietnam • An American who has been a resident here for a few years said to me the other day: "You know, they still look at us here the way we want to be looked at. America equals opportunity, entrepreneurship and success. That's not true in so many places anymore." Four decades after the war, in one of the world's consoling mysteries, the United States enjoys an overwhelming approval rating in Vietnam, reflected in the outpouring of enthusiasm for President Barack Obama during his three-day visit last month. In this fast-growing country of 94 million people, about one-third of them on Facebook, America is at once the counterbalance to the age-old enemy, China, and an emblem of the prosperity young people seek.

The best way to kick Vietnamese aspirations in the teeth, turn the country sour on the United States, and undermine the stabilising American role in Asia, would be for Congress to fail to ratify the Trans-Pacific Partnership, Mr Obama's signature trade agreement with 11 Pacific Rim countries including Vietnam but not China.

If the TPP falls apart, China wins. It's as simple as that. Non-ratifica- tion would signal that Beijing gets to dictate policy in the region, and the attempt to integrate Vietnam comprehensively in a rules-based international economy fails.

Mr Obama's decision to spend so much time here is an indication of the importance he attaches to this cornerstone of his so-called Asia "pivot". The agreement - with countries accounting for close to 40 percent of the global economy - anchors the United States as a Pacific power and reinforces its critical offsetting role in Asia as China rises. By visiting Ho Chi Minh City and Hiroshima, Japan, Mr Obama also made a powerful statement that past enmities can be overcome in the name of mutual prosperity - a signal to Cuba and Myanmar, among others.

But such long-term transformations, pulling hundreds of millions out of poverty in Asia, are not the stuff of an American election characterised by anger above all. Among the popular one-liners is this: International trade deals steal US jobs. Not one of the three surviving candidates backs the Trans-Pacific Partnership. Mrs Hillary Clinton was for it - and right - before she was against it - and wrong. Senator Bernie Sanders and Mr Donald Trump are simply against it, big time.

An anti-TPP demonstrator at a rally in front of Government House in Santiago, Chile, last month. Non-ratification of the trade deal by the US Congress would signal that Beijing gets to dictate policy in Asia, and the attempt to integrate Vietnam in a rules-based international economy would have failed. PHOTO: REUTERS

The trade agreement - with countries including Peru, Mexico, Australia, New Zealand, Canada and Malaysia - has flaws, of course. There are issues it does not address, like currency manipulation. Legitimate concerns have been raised about the impact that patent enforcement will have on affordable medicines.

The Obama administration has acknowledged that some manufacturing and low-skilled jobs will be lost, but argued this will be offset by job growth in higher-wage, export-reliant industries. The Peterson Institute for International Economics, in a report issued this year, found the accord would stimulate job "churn" but was "not likely to affect overall employment in the United States", while delivering significant gains in real incomes and annual exports.

What the agreement will do, as Mrs Clinton noted when she backed the deal, is deliver "better jobs with higher wages and safer working conditions, including for women, migrant workers and others". It obliges countries like Vietnam to allow workers to form independent unions; it requires a minimum wage and higher health standards; it bans child labour and forced labour. It binds Vietnam to countries where the rule of law is arbiter rather than authoritarian diktat.

At a time when a drought in the Mekong Delta, Vietnam's rice bowl, and a massive fish kill along the coast have sparked protests and sharpened concerns about global warming, the agreement is also designed to combat overfishing, illegal logging and other environmental scourges. It commits countries to shift to low-emission economies.

To which, all Mr Trump has to say in a recent article in USA Today is that the TPP is "the biggest betrayal in a long line of betrayals" of American workers. But when pressed in a Republican debate on which parts of the deal were badly negotiated, he could cite only currency manipulation and "the way China and India and almost everybody takes advantage of the United States". China and India, of course, are not part of the Trans-Pacific Partnership.

As for Mrs Clinton, she believed in 2012 that the TPP "sets the gold standard in trade agreements", before deciding in October that "I am not in favour of what I have learnt about it". The best that can be said about this is that it was probably a tactical cave-in she would reverse if she wins.

Developed economies face huge problems that have produced this season of rage. But the world has enjoyed growing prosperity over decades because of continuously reduced trade barriers. A reversal would be the road to conflict. Like the best trade accords, the TPP is also a strategic boost to liberty and stability in the fastest-growing part of the globe. Congress should resist populist ranting and ratify it.


A version of this article appeared in the print edition of The Straits Times on June 04, 2016, with the headline 'The right Asian deal'. Print Edition | Subscribe