1ac
Plan
The United States federal government should negotiate as an economic partner with Mexico in
multilateral trade negotiations.
1ac Economy
Poor exports are crushing growth and causing prolific debt
Barlow 12 – staff writer for economyincrisis.org, online news source about the US economy (George,
“The Perils of Importing More than We Export,” economyincrisis.org, May 25 2012,
http://economyincrisis.org/content/perils-importing-more-we-export ) //JG
The United States continues to import more, and export less each year, while our production levels drop
and we continue the sell off our large companies to foreign interests. As a result, tax revenue has
receded and we now have fewer American owned companies remaining to produce wealth and
generate taxes. Our government, already drowned in foreign debt, must continuously borrow more to
operate and pay its bills. This cycle of debt enlargement has impacted every level of our economy.
Government debt is now more than $14 trillion. The 2007 balance of trade deficit (debt) was $731
billion, while China made a $371 billion profit during the same year. In 2009, the trade deficit was
$506.9 billion, an improvement, but still completely unacceptable. The following figures represent the
balance of trade deficits per year from 2000-2009. It is through these means that foreign interests buy
us out. 2000 – $446.2 = $848,997 per minute 2001 – $421.9 = $802,854 per minute 2002 – $475.3 =
$904,385 per minute 2003 – $541.5 = $1,030,335 per minute 2004 – $665.6 = $1,266,421 per minute
2005 – $783.8 = $1,491,250 per minute 2006 – $839.4 = $1,597,139 per minute 2007 – $823.1 =
$1,566,195 per minute 2008 – $834.6 = $1,587,998 per minute 2009 – $506.9 = $964,505 per minute This
is a grand total of $6.3 trillion in trade debt in just a short 10 year time span – money that can only come
back to buy us out! It is prudent to note that the difference between imports and exports in 2009 and
2008 is due to a drop in all economic activity, not because of a substantial increase in exports relative to
imports. No country can continue to exist on debt, especially when there is very little probability of ever
repaying it. How can we continue to delude ourselves with the idea that we are a superpower? Our
standard of living and economic strength is dependent on ever increasing imports and our entire
economy can only be temporarily sustained by ever increasing debts. As we witnessed briefly in 2008,
our bubble will burst, and when it happens again the crash of 2008 will appear to have occurred in a
time of prosperity. Our lenders will inevitably discontinue loaning us any more money. What motivation
could they have to continue? Our productive capabilities have become uncompetitive and insufficient.
Our manufacturing infrastructure and our source of a competent manufacturing labor force has been
dissolved and replaced overseas. How will we possibly function when the money runs out? Something
needs to be done, and it needs to be done soon. The process will be difficult, but the negative
consequences of the alternative (continuing on our current path) pales in comparison.
Debt causes geopolitical tensions and economic collapse – now is key to avert crisis
Ture 13 – Ph.D. and Senior Fellow in the Economics of Fiscal Policy at the Heritage Foundation (JD,
The Many Real Dangers of Soaring National Debt,” The Heritage Foundation, June 18 2013,
http://www.heritage.org/research/reports/2013/06/the-many-real-dangers-of-soaring-national-debt )
//JG
The U.S. economy is recovering from the Great Global Recession, but President Obama’s massive
deficits, soaring debt, and tepid support for reforms to render America’s entitlement programs
affordable pose a grave economic threat. The threat is not theoretical; it is not suppositional. The threat
is real and must be faced squarely, and soon. The simple fact is that under current policy, “America is on
the verge of becoming a country in decline —economically stagnant and permanently debt-bound.”[24]
Economic forecasts beyond the next few quarters, whether by government or private forecasters, tend
to show the economy moving toward normal levels of production and employment over some
reasonable period, with interest rates likewise returning to normal levels. However, recent history both
in the U.S. and abroad underscores how quickly events can turn when market psychology is upended.
Rather than increasing steadily, interest rates are more likely to surge in stages, hammering the
economy anew each time. Nor is the future likely to unfold undisturbed. In addition to geopolitical
tensions, Europe has yet to resolve its internal monetary contradictions surrounding the euro. While
European leaders have masterfully danced from crisis to crisis, they have yet to settle on policies
rendering the euro a viable currency or their economies strong, viable competitors internationally. At
home, perhaps the Federal Reserve has badly misjudged as it aggressively pursues its policy of
quantitative easing through “extraordinary measures” and will have to raise interest rates quickly to
prevent inflation. Or perhaps the recent extended period of high unemployment has degraded worker
skills in ways only now implied, or perhaps business investment in new facilities or research and
development has been inadequate to sustain normal growth rates. The point is not that any or all of
these possibilities are likely, but that they and others may transpire, and thanks to the rapid increase in
U.S. government debt, the federal government is poorly positioned to respond and the U.S. economy is
poorly positioned to overcome their effects. The current period of low interest rates despite rising debt
is beguiling policymakers and the nation alike about the risks stemming from America’s irresponsible
fiscal policy, lulling them into complacency. Not merely the calm before the storm, economic conditions
brought about by developments abroad and monetary policy at home have effectively anesthetized
financial markets against the effects of U.S. fiscal profligacy. The anesthesia, however, will prove
temporary. Interest rates will almost certainly rise past the normal levels now forecast, the economy will
suffer—all largely due to the budget deficits now being incurred and to the inaction so far to address the
even greater, entitlement-driven deficits in the years immediately ahead. America’s decline is far from
inevitable. There is still time for a substantial and effective course correction. Congress, working with
President Obama, can begin to right the ship quickly with six well-vetted, bipartisan proposals, starting
the process of reforming Social Security and Medicare so they better serve their constituencies today
while remaining affordable tomorrow.[25] Enacting all six proposals, however, would still leave the task
only partly completed. To finish the job, Congress and the President will need a more comprehensive
approach, such as is laid out in The Heritage Foundation’s Saving the American Dream plan.[26] There is
still time, but not much, to ensure America’s prosperity for the next generation.
Slow economic growth and rising deficits risk great power wars – addressing debt is
vital
Khalilzad, 11 - Zalmay Khalilzad was the United States ambassador to Afghanistan, Iraq, and the United
Nations during the presidency of George W. Bush and the director of policy planning at the Defense
Department from 1990 to 1992 (“The Economy and National Security,” National Review, 2/8,
http://www.nationalreview.com/articles/259024/economy-and-national-security-zalmay-khalilzad
Today, economic and fiscal trends
pose the most severe long-term threat to the United States’ position as global
leader. While the United States suffers from fiscal imbalances and low economic growth, the economies of
rival powers are developing rapidly. The continuation of these two trends could lead to a shift from
American primacy toward a multi-polar global system, leading in turn to increased geopolitical rivalry
and even war among the great powers.
The current recession is the result of a deep financial crisis, not a mere fluctuation in the business cycle. Recovery is likely to be protracted. The
crisis was preceded by the buildup over two decades of enormous amounts of debt throughout the U.S. economy — ultimately totaling almost
350 percent of GDP — and the development of credit-fueled asset bubbles, particularly in the housing sector. When the bubbles burst, huge
amounts of wealth were destroyed, and unemployment rose to over 10 percent. The decline of tax revenues and massive countercyclical
spending put the U.S. government on an unsustainable fiscal path. Publicly held national debt rose from 38 to over 60 percent of GDP in three
years.
Without faster economic growth and actions to reduce deficits, publicly held national debt is projected
to reach dangerous proportions. If interest rates were to rise significantly, annual interest payments — which already are larger
than the defense budget — would crowd out other spending or require substantial tax increases that would undercut economic growth. Even
worse, if
unanticipated events trigger what economists call a “sudden stop” in credit markets for U.S. debt, the
United States would be unable to roll over its outstanding obligations, precipitating a sovereign-debt
crisis that would almost certainly compel a radical retrenchment of the United States internationally.
Such scenarios would reshape the international order. It was the economic devastation of Britain and France during World War II, as well as the
rise of other powers, that led both countries to relinquish their empires. In the late 1960s, British leaders concluded that they lacked the
economic capacity to maintain a presence “east of Suez.” Soviet economic weakness, which crystallized under Gorbachev, contributed to their
decisions to withdraw from Afghanistan, abandon Communist regimes in Eastern Europe, and allow the Soviet Union to fragment. If
the U.S.
debt problem goes critical, the United States would be compelled to retrench, reducing its military
spending and shedding international commitments.
We face this domestic challenge while other major powers are experiencing rapid economic growth.
Even though countries such as China, India, and Brazil have profound political, social, demographic, and
economic problems, their economies are growing faster than ours, and this could alter the global
distribution of power. These trends could in the long term produce a multi-polar world. If U.S. policymakers fail to act and other powers
continue to grow, it is not a question of whether but when a new international order will emerge. The closing of the gap between
the United States and its rivals could intensify geopolitical competition among major powers, increase
incentives for local powers to play major powers against one another, and undercut our will to preclude
or respond to international crises because of the higher risk of escalation.
The stakes are high. In modern history, the longest period of peace among the great powers has been the era of
U.S. leadership. By contrast, multi-polar systems have been unstable, with their competitive dynamics
resulting in frequent crises and major wars among the great powers. Failures of multi-polar international
systems produced both world wars.
American retrenchment could have devastating consequences. Without an American security blanket, regional powers
could rearm in an attempt to balance against emerging threats. Under this scenario, there would be a
heightened possibility of arms races, miscalculation, or other crises spiraling into all-out conflict.
Alternatively, in seeking to accommodate the stronger powers, weaker powers may shift their geopolitical posture away
from the United States. Either way, hostile states would be emboldened to make aggressive moves in their
regions.
Extinction
Khalilzad, 95 - analyst at the RAND Corporation (Zalmay, Washington Quarterly, Spring, lexis)
Under the third option, the United States would seek to retain global leadership and to preclude the rise
of a global rival or a return to multipolarity for the indefinite future. On balance, this is the best longterm guiding principle and vision. Such a vision is desirable not as an end in itself, but because a world in
which the United States exercises leadership would have tremendous advantages. First, the global
environment would be more open and more receptive to American values -- democracy, free markets,
and the rule of law. Second, such a world would have a better chance of dealing cooperatively with the
world's major problems, such as nuclear proliferation, threats of regional hegemony by renegade states,
and low-level conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global
rival, enabling the United States and the world to avoid another global cold or hot war and all the
attendant dangers, including a global nuclear exchange. U.S. leadership would therefore be more
conducive to global stability than a bipolar or a multipolar balance of power system.
US-Mexican trade is high and inevitable but the plan is key to export oriented growth
Wilson 13 - Associate at the Mexico Institute of the Woodrow Wilson International Center for Scholars
(Christopher, “A U.S.-Mexico Economic Alliance: Policy Options for a Competitive Region,” New Ideas for
a New Era: Policy Options for the Next Stage in U.S.-Mexico Relations, May 2013
http://www.wilsoncenter.org/sites/default/files/new_ideas_new_era.pdf )
After years of slow growth (4.5 percent average annual growth from 2000-2008) and then a 17 percent
drop between 2008 and 2009 during the Great Recession, U.S.-Mexico trade is now booming as never
before. It is growing faster than U.S. trade with China and faster than the post-NAFTA spurt in the
1990s.7 In the uncertain context of a global economy in search of a new equilibrium—Europe struggling,
China’s decelerating, a fiscal reckoning in the United States—the bilateral economic relationship stands
out as a pillar of strength and perhaps a signpost on the path to a stronger economic region.
U.S.-Mexico trade already supports more than six million U.S. jobs, and the return of manufacturing
competitiveness to the region, as well as the robust growth of the Mexican economy, presents an
opportunity to significantly increase export-supported employment should steps be taken to bring
about further advances in North American competitiveness.8 The extraordinary thing is that this recent
boom in bilateral trade has occurred without a strategy. Imagine what could be achieved if the
governments of the United States and Mexico—ideally in conjunction with Canada—designed and
implemented a comprehensive plan to improve the competitiveness of our region in the global
marketplace.
Joint negotiations in the TPP turns North America into a manufacturing destination
and export platform for global economic expansion
Gerwin 13 - Senior Fellow for Trade and Global Economic Policy for the Third Way Economic Program
(Ed, “Rooting for Canada and Mexico in the TPP,” Third Way, March 2013,
http://content.thirdway.org/publications/672/Third_Way_Policy_Memo__Rooting_for_Canada_and_Mexico_in_the_TPP_.pdf ) //JG
Working together in the TPP could help the United States, Canada, and Mexico further build on this
success, supporting increased trade and good jobs for America’s producers and workers.7 We highlight
below four reasons why expanded teamwork with our closest neighbors in the TPP could be good for
the United States.
1) Launching Pads for American Exports . When our neighbors in Canada and Mexico make things, they
frequently use a high percentage of inputs that are “Made in the USA.”8 One study, for example,
estimates that 40% of the content of Mexico’s exports to the United States is originally from America.
Similarly, Canada’s U.S.-bound exports are an estimated 25% U.S. content. By contrast, other countries
tend to use much less American content. Only 4% of the content of China’s exports to the United
States, for example, is American.9 Because Canadian and Mexican products often contain such high
levels of U.S. content, America wins when Canada and Mexico boost their exports to the rest of the
world.11 The TPP would enhance the ability of Canada and Mexico to act as global export platforms
for more American content in two important ways. First, the TPP would open major new markets for
exports from Canada and Mexico, especially in East Asia. Canada, for example, currently has no free
trade deals in the East Asian region. The TPP would open up six significant countries in the region to
Canadian exports (and American content), including Malaysia, Singapore, and Vietnam.12 Second, under
the TPP, more exports from Canada and Mexico would qualify for preferred access to foreign markets.
Mexico, for instance, already has an extensive roster of free trade agreements, but its exports often
don’t qualify for tariff preferences under these non-U.S. deals because they contain so much U.S.
content. American content would count under TPP origin rules, enabling Mexico (and Canada) to sell
more of their products (with more U.S. content) to our TPP partners.
2) Greasing the Skids for Regional Trade . Canada, Mexico, and the United States don’t just make
things–they make things together. NAFTA enables our countries to use highly integrated supply chains
to co-produce–and sell to the world–an astonishing array of “Made in North America” products, from
cars and cookies, to engines and electronics, and pasta and planes.15 North America’s shared
production is deep and extensive. Cars co-produced by Canada and the United States, for example,
contain parts and subassemblies that have crossed the border an average of six times. One-third of all
U.S.-Canada trade is intra-company trade–Ford selling to Ford or GE selling to GE.16 And over 40% of
U.S.-Mexico trade is between companies in the same industry. But the flow of North American
commerce is hardly seamless. Even under NAFTA, border barriers18 and regulatory differences19 still
cause serious “chokepoints ” that raise the cost and reduce the efficiency of trade in the region. And
the highly integrated nature of North America’s economy only magnifies the negative impacts of these
chokepoints. For instance, frequent border crossings impose an estimated $700 per vehicle penalty on
the integrated co-production of cars in North America. Cross-border Meltdowns Indiana-based Hoosier
Gasket had a searing experience with border barriers–when summer heat and long border delays
combined to warp an entire shipment of gaskets destined for manufacturers in Mexico.21 Because of
different food rules, General Mills runs separate production lines for Cheerios sold in Canada and the
United States, and Campbell’s sells soup in different-sized cans in the two markets.222 In recent years,
the United States, Canada, and Mexico have significantly boosted joint efforts to reduce border and
regulatory barriers.23 The United States and Canada, for example, are pursuing 29 initiatives that would
eliminate unnecessary differences in rules and ensure that regulators are on the same page as they
develop new standards in areas like nanotechnology.24 This shared experience makes Canada and
Mexico natural partners with the United States in negotiations to facilitate the flow of trade among the
TPP’s eleven partner countries–economies that have a combined GDP of almost $21 trillion. And the
TPP’s strong emphasis on “holistic” approaches to efficient supply chains will not only help expedite
trade at our common borders, but will better link North America’s integrated economies to business
opportunities in the Asia-Pacific region.
3) “Re-shoring” Production As wages and costs in countries like China continue to rise, businesses are
looking at a broad matrix of factors in deciding where to locate or re-locate production. These factors
include transport and energy costs, proximity to markets and suppliers, skilled workers, legal
enforcement, supply chain efficiency, and infrastructure.26 When judged on this broader basis, “reshoring” to America makes increasing economic sense–both for producers and for the overall U.S.
economy.27 Co-producing products in the United States, Canada, and Mexico can be a particularly
effective “re-shoring” strategy–one that takes advantage of our region’s overall competitive
advantages, while strongly supporting U.S. production and jobs. U.S. and international companies, for
example, increasingly see Mexico–with its skilled workforce, improving infrastructure, and relatively
higher levels of legal protection–as a better long-term alternative than China for locating production
facilities.28 And, because of Mexico’s proximity and close integration with U.S. supply chains, more
production in Mexico creates greater opportunities for U.S based suppliers of parts and components and
their U.S. workers.29 Cooperating with Canada and Mexico through the TPP could help to reinforce
these important trends . The TPP’s emphasis on trade facilitation would make North American supply
chains more efficient and make North America a more desirable location for production. At the same
time, the TPP would open growing, new Asian markets to an array of North American-made products.
And, with the addition of Canada and Mexico, it would be easier to develop strong TPP origin rules that
would promote production and jobs in North America.30 Driving North American North America’s
growing, integrated auto sector is increasingly exporting to the world–shipping Jeeps from Ohio and
Toyotas from Indiana. Honda recently announced that it is poised to become a net exporter from North
America, as its U.S., Canadian, and Mexican plants increasingly sell globally. New trade deals like the TPP
can help drive this trend. After the United States concluded its recent trade deal with South Korea, for
instance, companies including Ford, Honda, and Toyota ramped up exports of U.S.-built cars to Korea.31
4) A Facelift for NAFTA . Negotiating in the TPP with Canada and Mexico also allows the United States
to address nettlesome trade issues that still exist under NAFTA. These include:
• Canadian “supply management” rules that severely limit the ability of U.S. farmers to export dairy,
chicken, eggs, and turkey to Canada;
• Barriers caused by Canada’s intellectual property (IP) laws and IP enforcement, as well as its local
content quotas for Canadian TV and radio; and32
• Mexico’s failures to protect and enforce certain U.S. IP, its limits on telecom access and foreign
investment, and its anticompetitive business practices.33
The TPP talks also offer the opportunity to upgrade NAFTA’s side agreements on labor and the
environment by adopting strong and enforceable labor and environment rules, such as those included in
the U.S.-Peru Free Trade Agreement.34 Raising these and other issues in the context of the TPP talks
could provide new avenues–and potential new allies and possible new trade-offs–to help the United
States to tackle difficult trade issues with Canada and Mexico. Progress on these fronts could further
boost U.S. exports to our neighbors and advance global adoption of high-standard trade rules.
Conclusion
In the past, it was often easy to measure the benefits of trade. Producers and workers in Country A
would make a finished product from local inputs and export it to Country B. In today’s global economy,
however, trade is much more complex. Exports like cars, electronics, processed foods, and financial
services are frequently co-produced in multiple countries and can contain extensive “embedded”
content from producers around the world.35
It’s vital to keep this modern reality in mind when evaluating the importance to the United States of
Canada’s and Mexico’s participation in the TPP. Because of their proximity and extensive integration in
regional supply chains, when Canada and Mexico succeed in global markets, America often wins too.
Our three countries are also integrated by two decades of common experience under NAFTA and shared
political and commercial values.36 And working together, the United States, Canada, and Mexico could
create momentum for further expanding the TPP–and advancing our shared desire to extend strong and
fair trade rules throughout the broader Asia-Pacific region.37
For these reasons–and many others–it’s good for the United States to have our North American
neighbors as negotiating partners in the TPP.
Joint economic engagement with Mexico in TPP negotiations makes the North
American market desirable to Asia – it creates incentives for an effective TPP
conclusion
Shapiro 13 - President of the Institute of the Americas a public policy think tank at UCSD (Charles,
"Time to shift focus in relations with Mexico," San Diego Union Tribune, 2/6/13,
web.utsandiego.com/news/2013/Feb/06/mexico-trade-economy/?#article-copy ) //JG
Nearly 20 years after the passage of the North American Free Trade Agreement, Mexico and Canada
have joined the United States in the Trans-Pacific Partnership, an ambitious trade negotiation with eight
other Pacific Rim countries. The inclusion of our closest trading partners in the Western Hemisphere
ensures that the deal is truly trans-Pacific, rather than one focused primarily on Asia. While Washington
focuses on a “pivot” to Asia, rebalancing our global priorities will prove incomplete without a renewed
commitment to our North American neighbors.
The Mexican and Canadian economies are not only our largest export markets, but also joint production
platforms. We build goods together, and we must do more to advance cross-border trade.
Our relationship with Mexico presents intriguing possibilities with the new administration of President
Peña Nieto. A bold vision for our bilateral relationship should capitalize on Mexico’s growing economic
dynamism and diplomatic heft.
Latin America’s second-largest economy, Mexico is outpacing Brazil through export-led growth and
sound macroeconomic management. It is one of the most open of the world’s leading economies, with a
network of 44 free-trade agreements, while Mexico’s economy has moved increasingly to high-tech
operations.
Reasons to be optimistic about Mexico’s economy include domestic momentum for reform and
diminished competition from China. Rising wages and higher transport costs make Chinese exports more
expensive, playing to Mexico’s geographic advantage as companies seek to cut costs through near
sourcing. Mexico is tackling needed reforms, beginning with passage of a new labor law and education
reform. Cooperation between Mexico’s major political parties bodes well for an opening of Mexico’s
heavily protected oil industry, a potentially huge boost for North American growth.
It is time for U.S. political leaders to recognize what our private sector already understands: the
importance of Mexico to U.S. prosperity.
Unfortunately, when the U.S. looks south, we tend to focus on the security and violence. We applaud
the unprecedented bilateral cooperation in the fight against transnational organized crime, and we have
advocated for U.S. security assistance to Mexico in that effort. It is time to shift to a greater focus on
economic and geopolitical opportunities.
A joint competitiveness agenda should begin with making business easier at our common border.
Important security gains have been achieved, but trade facilitation has received insufficient attention,
despite the steady integration of cross-border supply chains. Long and unpredictable crossing times
mean bottlenecks at the border, and relatively few ports of entry have seen major upgrades.
Infrastructure investment and expansion of pre-clearance programs will require intense bilateral
cooperation and consultation with the private sector in both nations.
More broadly, we must harness the strategic power of our inextricable economic links. As a stalwart
free-trade advocate and a member of the G-20, Mexico is well positioned to be a significant player in
global financial and economic coordination . It is also a responsible international actor with which the
U.S. shares commercial interests and political values.
More sophisticated and effective engagement with Mexico would see our governments acting as
partners in multilateral settings . Mexico’s inclusion in the Trans-Pacific Partnership (TPP) trade
negotiations was a critical step, offering a vehicle to update our trade relationship to the standards of
the 21st century and to explore new markets for jointly produced goods. Like the United States, Mexico
is interested in deepening its economic relations with Asia, so why not pivot together? As China and
the United States vie for economic influence, Mexico’s participation in TPP advances a vision that spans
the Pacific to link the Americas and Asia – in contrast to China’s preferences for regional agreements
that exclude the Western Hemisphere.
We should champion North American integration in other multilateral contexts. For example, as transAtlantic momentum builds for a free-trade agreement between the United States and the European
Union, we should consider the possibility of negotiating as a North American bloc.
Such initiatives will depend upon leadership from both the White House and the Congress as well as a
broader shift in how Americans view our southern neighbor. This period of political transition and
economic promise presents a unique opportunity to forge ahead.
1ac Trade
The existing spaghetti bowl of bilateral trade deals is undermining the development of
an effective multilateral trading system – the TPP is a platform to move beyond the
spaghetti bowl
Wagner and Parker 5/16 – *CEO of Country Risk Solutions, a cross-border risk advisory firm based
in Connecticut, and author of the book "Managing Country Risk," **research analyst with CRS in New
York (Daniel, Nicholas, “Is the Trans-Pacific Partnership the Solution to Latin America's Fractured Trade
Regime?,” 5/16/13, http://www.huffingtonpost.com/daniel-wagner/is-the-transpacificpartn_b_3284797.html)//SJF
Latin America is poised to assume a starring role in the governance of international trade, with a
Brazilian having been selected to lead the World Trade Organization and the Trans-Pacific Partnership
(TPP) set to enter its 17th round of talks in Peru later this month. Many hope an agreement on the TPP
will provide a much-needed boost to a still prostrate global economy, but what is being widely hailed as
profound progress in the evolution of trade integration globally is having the opposite effect in Latin
America. Rather than deepening trade ties within the region, the TPP is serving to expose and
exacerbate underlying political and economic fractures, raising question about how deep Latin American
trade cooperation can be, and whether the Americas are fated to continue to be divided along trade
policy lines.
Praised as a cutting edge agreement to address 21st century cross-border commercial issues, the TPP
will unite a dozen nations with the goal of establishing a core free trade area for the Asia-Pacific region.
The bloc will account for more than 30% of global GDP and 20% of the world's exports -- which would
grow considerably with the inclusion of Japan and South Korea - which are both actively exploring entry
in the Partnership. Many potential signatories, including the U.S., have expressed a desire for conclusion
of the Partnership this year. As is the case with any multilateral negotiation, getting to the finish line has
not been easy.
The derailment of negotiations over the Free Trade Agreement of the Americas (FTAA) and the Doha
Development Round had a significant impact on the perceived realism of regional trade agreements,
while negatively effecting Latin America's ability to uniformly and robustly engage with its largest
trading partners. The radically different trade policy paths that have emerged - pitting the notion of
collaboration against economic nationalism -- have given rise to a region divided over how, and
whether, it should approach trade liberalization going forward.
Within Latin America, only Chile, Mexico and Peru are currently party to the TPP. The three formed the
Pacific Alliance (PA) in 2012, along with Colombia, which also hopes to join the Partnership. All four have
made significant commitments towards trade liberalization. The PA members have concluded FTAs with
one another and with the U.S., have implemented numerous bilateral trade agreements, and share a
number of overlapping trade agreements that include several Asian countries. Membership in the TPP
would facilitate increased integration with one another and offer a more coordinated approach to
expanding trade with Asia. In conjunction with the members of the Central American Free Trade
Agreement (CAFTA), it should one day be possible to create a supply chain running up the Pacific coast
from Chile to Mexico.
On the other side of the spectrum are Latin America's "Atlantic" countries, whose approach to regional
and global integration has taken a dramatically different course. Mercosur, the once promising common
market, now includes the protectionist wing of Latin America that has come to include Argentina, Brazil,
and Uruguay, along with socialist Bolivia and Venezuela. Between them, the ability to make genuine
progress along regional trade lines has proven challenging.
During the commodities boom these countries prospered, but as a result of the global recession, growth
waned and a propensity toward protectionism became common. The customs union that in the 1990s
united its members to reduce trade barriers, forge a common trade policy, and actively participate in
the FTAA negotiations has been transformed into one of the most protectionist blocs in Latin America,
with its members routinely employing tariffs, taxes, and trade restrictions against one another. This has
limited Mercosur's general appeal in and outside of Latin America. Mercosur has largely withdrawn from
pursuing FTAs altogether, and its policies over the past decade have failed to consolidate meaningful
partnerships with any of its primary trading partners.
In order to mitigate the impact of a divided Latin America and prevent the schism from intensifying,
robust multilateral negotiations must be reconstituted. Much of what happens next will be influenced
by the actions of the U.S., given its leadership role in the TPP. A primary obstacle that must be overcome
is the Brazil/US relationship, which was a major impediment during the Doha round. Brazil is not
currently party to any major multilateral trade initiative, and two of the principal agreements it has
signed in recent years -- CELAC and UNASUR -- specifically exclude the U.S. Additionally, Mercosur
requires that its members negotiate trade agreements in unison, meaning Brazil will need to find a way
to compromise, as will its neighbors.
The U.S. has scored notable trade-related achievements in the past several years, mostly in the form of
bilateral trade agreements, but these took far too long to accomplish and were highly politicized. Given
this, it seems unrealistic to hope for any near term breakthroughs in future multilateral negotiations
that rely on the U.S. for leadership. If the region continues to be a secondary priority of U.S. foreign and
economic policy, large segments of Latin America will continue to be left out of the broader trade
integration picture.
The announcement that the Obama administration will be sending Joe Biden to Brazil, Colombia, and
Trinidad and Tobago later this month in what the Vice President called "the most active stretch of highlevel engagement on Latin America in a long, long time" suggests that Mr. Obama would like part of his
legacy to be a closer relationship with Latin America. To do so would at the same time require finding a
way to reduce the appeal of 21st century socialism in a variety of countries in Latin America - something
that seems improbable during his tenure.
The most likely near-term outcome is that the U.S. will take a leadership role in pushing for additional
Latin American countries to join the TPP, starting with Colombia, Costa Rica, and Panama. All three
countries have undertaken significant commitments toward liberalizing trade, have shifted the focus of
their trade policies to Asia, and have expressed interest in joining the TPP. Colombia is the best fit, as it
already has agreements with five TPP members, is finalizing agreements with Japan and South Korea,
and sends nearly half its exports to the TPP-12. While such a development may reinforce the emerging
split between Mercosur and the Pacific Alliance, it may also eventually help encourage the adoption of
more open trade policies that can counter the protectionist tendencies that have arisen.
Greater Latin American participation in the TPP will surely serve to strengthen the Partnership and the
region. If the negotiations are able to successfully address the two biggest problems facing the TPP in
Latin America -- synchronizing the dozens of bilateral agreements that exist between members and nonmembers, and bringing other countries into the TPP -- then the agreement will serve to reinforce
integration into the global supply chain and effectively sidestep sclerotic multilateral trade talks at the
WTO. Failure to reach agreement may mean that rather than encouraging mutual prosperity through
deeper economic ties, the level of political and economic discord surrounding trade in Latin America will
rise.
Given the stakes involved, all countries participating in the negotiations need to recognize what is in
their mutual long-term interests, step up to the plate, and do what is needed to make the TPP a reality.
However, given the track record of lengthy and ultimately unsuccessful multilateral trade negotiations in
recent history, it is more likely that any agreement will take much more time to be concluded. In the
meantime, the spaghetti bowl of bilateral trade agreements will continue to undermine efforts to
achieve multilateral solutions to the region's trade challenges.
Joint negotiations with Mexico are vital to trade credibility – it boosts overall trade
within the TPP and ensures nations respect WTO obligations
Cowan 12 - President of the Annenberg Foundation Trust at Sunnylands ("A Stronger Future: Policy
Recommendations for U.S.-Mexico Relations, Wilson Center,
sunnylands.org/files/posts/159/stronger_f.pdf ) //JG
Policy Option: Mexico and Canada have each joined the Trans-Pacific Partnership negotiations, and the
United States should work closely with its North American partners as negotiations proceed . Mexico,
the United States, and Canada have each begun to reorient their foreign policy to focus more attention
on the Asia-Pacific region. The question now is whether they will pivot individually or do so as
members of a North American strategic and economic partnership . In efforts to strengthen
relationships with nations throughout Asia, grow trade, or push nations to respect their WTO
obligations, the countries of North America are more competitive and convincing when working
together. North American cooperation brings together three distinct and important voices: Canada, the
consummate multilateralist; Mexico, a large and important growth market; and the United States, still
the world’s top superpower. The Trans-Pacific Partnership is an obvious place to begin to articulate and
enact such a stance. The TPP has the potential to strengthen North America’s own integration while
taking steps forward toward the strategic goals of both the United States and Mexico.
Mexico is key – the US and Canada already negotiate on the same page – but joint
cooperation with Mexico in the TPP make the entire process more credible and acts as
a bridge to further Latin American participation
Selee and Wilson, 12 - Andrew Selee is Vice President for Programs and Senior Advisor to the
Mexico Institute and Christopher Wilson is an associate with the Mexico Institute, (Andrew and
Christopher, Wilson Center, November 2012, “A New Agenda with Mexico”
http://www.wilsoncenter.org/sites/default/files/a_new_agenda_with_mexico.pdf)
Over the past few years, the U.S. and Mexican governments have expanded beyond the bilateral agenda
to work closely together on global issues, from climate change to international trade and the economic
crisis. The U.S. government should continue to take advantage of the opportunities this creates for
joint problem-solving . Mexico’s active participation in the G-20, which it hosted in 2012, and in the
U.N. Framework on Climate Change, which it hosted in 2010, have helped spur this collaboration, and
the recent accession of Mexico into the Trans-Pacific Partnership negotiations provides one obvious
avenue to continue it. The two countries also coordinate more extensively than ever before on
diplomatic issues, ranging from the breakdown of democratic order in Honduras to Iran’s nuclear
ambitions. Mexico is likely to play an increasingly active role on global economic and environmental
issues, areas where the country has significant experience, and through cooperative efforts the U.S. can
take advantage of Mexico’s role as a bridge between the developed and developing worlds, and
between North America and Latin America.
The bilateral agenda will remain critically important —and the increasingly deep integration of the two
economies and societies means that efforts on trade, security, and migration will remain vital for the
future of both countries. In addition, the maturation of the bilateral relationship means that it may one
day resemble that between the United States and Canada , in which global issues can be as important
as the strictly bilateral issues.
A balanced and wide-ranging U.S.-Mexico agenda—one that seeks creative and collaborative
approaches on topics ranging from local gangs to global terrorist networks and from regional supply
chains to international finance—promises significant mutually beneficial results in the coming years.
This is vital to substantially expanding overall trade flows
Noriega 12 - former assistant secretary of state for Western Hemisphere affairs and a
former U.S. ambassador to the OAS (Robert, “An action plan for US policy in the
Americas,” American Enterprise Institute, 12/05/12, http://www.aei.org/outlook/foreign-anddefense-policy/regional/latin-america/an-action-plan-for-us-policy-in-the-americas/ ) //JG
Expanding regional economic cooperation is crucial to US economic growth. An aggressive trade
promotion and investment strategy in today’s hypercompetitive, globalized economy is not a policy
option; it is an imperative . Clearly, prosperity at home depends on success abroad. The economic
opportunities in the Western Hemisphere are enormous, and US policy-makers and the private sector
must recognize them as critical to US economic growth. In 2011, US exports reached a record $2.1
trillion in total value, despite the fact that only 1 percent of US businesses export their products to
foreign markets. The United States must expand on these opportunities. Exports benefit the US
economy by offering companies opportunities to tap new markets, expand their production, and earn
more consumer dollars. Today, 95 percent of the world’s consumers live outside the United States, and
the International Monetary Fund predicts that, through 2015, some 80 percent of economic growth will
take place beyond US shores. It is indisputable that an aggressive US trade policy—meaning selling US
goods and services in as many markets as possible—is essential for the US economy to hone its
competitive edge in the 21st century. In this sense, America’s future is inextricably linked to the
future of its neighbors in its own hemisphere. A prosperous hemisphere means a more prosperous
United States . "Since 2003, an estimated 73 million Latin Americans have risen out of poverty.
Moreover, between then and 2010, the average Latin American income increased by more than 30
percent." The Western Hemisphere’s Moment. The United States is strategically well-placed to begin a
new chapter in trade relations with Latin America. The countries within the Americas are bound by close
historical, cultural, familial, and geographic ties, linked by common values and mutual interests. What
also facilitates expanded economic engagement is the regional trade partners’ proximity to US shores,
and the significant number of Hispanics living in the United States—some 50 million—that provide an
exceptional strategic advantage in doing business with their countries of origin. Equally important are
the advances that many countries within the region have made in establishing economic stability and
growth in recent years as the roots of democracy and the rule of law continue to take hold. Countries
such as Mexico, Chile, Peru, Brazil, and Colombia have been at the forefront in modernizing their
economies and opening them to investment, liberalizing trade, and becoming more competitive overall.
The numbers tell the story. Since 2003, an estimated 73 million Latin Americans have risen out of
poverty. Moreover, between then and 2010, the average Latin American income increased by more than
30 percent, meaning that currently, nearly a third of the region’s some 570 million people are
considered middle class. And in just the next five years, regional economies are projected to expand by
one-third. That macroeconomic stability generates even greater opportunities for US business. The
Western Hemisphere already supplies a quarter of the world’s crude oil, a third of the world’s natural
gas, nearly a fourth of its coal, and more than a third of global electricity, while offering tremendous
potential for the development of renewable energy technologies. Certainly, many in the US private
sector have already discovered the benefits of intrahemispheric economic relationships. In fact, Latin
America has played a key role in expanding US exports in recent years. The Congressional Research
Service reports that from 1998 to 2009, US trade with Latin America increased an average of 82 percent,
more than 72 percent with Asia, 52 percent with the European Union, and 64 percent with the rest of
the world. In 2011 alone, trade with Latin America grew 20 percent. The economic growth in 2011
elevated trade between the United States and the region to a historic high of $772 million. Exports to
the region grew 22 percent to $350 million, while imports increased by 20 percent to a total of $420
million. According to the US Department of Commerce, American companies now export more to the
Western Hemisphere—some 42 percent of total US exports—than to any other part of the world,
including China. Last year, US merchandise exports to Latin America totaled $367 billion, and the US
private sector accounts for one-third of all foreign direct investment in the region. The United States
now has trade agreements with 11 countries in the Western Hemisphere, which the Department of
Commerce reports help to support nearly four million US jobs. Clearly, however, there is much more
that can be done to fulfill the potential of intrahemispheric economic relations in the hyper-competitive
global economy. High-level official US engagement is imperative to revitalizing existing alliances and
developing new partnerships to boost mutual competitiveness. A reinvigorated US trade policy must
transcend past approaches that have been too identified with solely US interests and too focused on
bilateral relationships. A 21st-century approach necessitates more multilateral engagement and
cooperation, mutually beneficial information-sharing and support, and an inclusive vision. A
complementary strategy to increase demand for US goods and services requires mobilizing private
capital, encouraging technology transfer, and leveraging existing US programs to strengthen the private
sector throughout the Americas. Traditionally, private-sector growth has been held back by lack of
investment and access to credit. In a true win-win strategy, the United States can boost exports and
investment while strengthening regional producers and consumers. In summary , increased US
government initiatives to expand economic partnerships with the country’s Western Hemisphere
neighbors are crucial to America’s economic recovery and competitiveness . A prosperous hemisphere
is also beneficial to US security concerns. The Americas is home to some of the most dynamic markets in
the world. The US administration must recognize this reality and take full advantage of the
opportunities. "According to the US Department of Commerce, American companies now export more
to the Western Hemisphere—some 42 percent of total US exports—than to any other part of the world,
including China." Boosting Two-Way Trade. US prosperity depends on greater global economic
interaction, with the Western Hemisphere providing unique opportunities. Three recommendations for
boosting two-way trade: Promote the US government’s Pathways to Prosperity initiative as the primary
US vehicle—including presidential- and cabinet-level participation—through which to facilitate greater
hemispheric trade integration;[1] Expand Latin American participation in the Trans-Pacific
Partnership —an initiative to promote stronger economic ties between the Western Hemisphere and
the Asia-Pacific region—beyond Peru, Chile, and Mexico; Through the Inter-American Development
Bank, increase material and technical support to trade- and business-advocacy groups throughout the
region to promote “best practices” among companies, cooperatives, or individuals seeking to export
their goods or services.
Integrating Latin America into the TPP is vital to the global trading system
KOTSCHWAR & SCHOTT 13 - *research associate at the Peterson Institute for International Economics
and adjunct professor of Latin American studies and economics at Georgetown University **AND senior
fellow at the Peterson Institute for International Economics (Barbara, Jeffrey, “The Next Big Thing? The
Trans-Pacific Partnership & Latin America,” America’s Quarterly, Spring, 2013,
http://www.americasquarterly.org/next-big-thing-trans-pacific-partnership)//AC
The hottest topic in world trade these days is the Trans-Pacific Partnership (TPP). Hailed as a state-of-the-art free trade
agreement (FTA), it will unite 11 countries—Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United
States, and Vietnam—with a combined GDP of almost $21 trillion (about 30 percent of world GDP) and $4.4 trillion in exports of goods and
services, or about a fifth of total world exports. If you add Japan and South Korea—who are actively exploring entry later this year—TPP
would cover 40 percent of world GDP and nearly a third of world exports.
But as with any ambitious multilateral trade initiative, getting to the final goal won’t be easy.
Many of the TPP participants already have FTAs with one another, and many have trade agreements with partners not
expected to join the pact. In Latin America, some countries with existing strong trade ties across the Pacific are in the negotiations; others are
not. TPP
as currently conceived may also disrupt existing intra-American integration arrangements, with
some countries and trade blocs left out entirely.
Such overlapping trade agreements and commitments among members and nonmembers represent one stumbling block to a deal. Another is
determining who to let in and when. But if these issues are handled well, TPP will serve to update and expand existing pacts, as well as
reinforce their integration into global supply chains. Equally important, TPP
can help set the standard for trade reform not
just for the Asia-Pacific region, but for the global trading system . Indeed, precedents developed in the
TPP could become a foundation for new initiatives to revive the flagging multilateral trade talks in the
World Trade Organization (WTO).
But if the various issues are not addressed thoroughly, or effectively, TPP will not only fail to live up to its
potential; it could even sow political and economic discord.
The Trans-Pacific talks have been unique among modern trade negotiations. New members, most recently Canada and Mexico, have
been allowed to join during the course of discussions. All current TPP members are members of the Asia
Pacific Economic Cooperation (APEC) Forum,1 a grouping of countries that includes Australia, Canada,
Chile, China, Indonesia, Japan, Mexico, Peru, and the United States. Indeed, APEC membership has been an unofficial
requirement for entry; TPP countries see their prospective accord as a key pathway toward APEC’s long-standing goal to create a Free Trade
Area of the Asia Pacific (FTAAP).
While TPP is designed to broaden and deepen trade and investment ties in the region, it has not pulled in all countries with FTAs. One major
reason Canada and Mexico had to join was to avoid disrupting the deep integration of North American
markets that has evolved since the establishment of the North American Free Trade Agreement
(NAFTA).
But other FTA partners have been more cautious. The problem arises most prominently with two integration initiatives: the ASEAN, of which
four of the ten members are not signatories of APEC, and the nascent Pacific Alliance (Chile, Colombia, Mexico, and Peru). The ASEAN issue is
already being addressed in a parallel negotiation of a Regional Comprehensive Economic Partnership (RCEP), in which the ASEAN-10 are
working together to deepen ties with their FTA partners in the region (those six countries are China, India, Japan, South Korea, Australia, and
New Zealand).2
In the case of the Pacific Alliance, work is still proceeding to deepen ties with FTA partners in the Western Hemisphere, including the United
States. While there is currently no common approach to negotiating with Asian countries, Pacific Alliance members are engaging with Asian
economies: Chile and Peru have signed agreements with China and South Korea; Chile and Mexico have negotiated FTAs with Japan; and
Colombia recently signed its FTA with South Korea and is in negotiations with Japan. Membership in TPP would offer a more coordinated path
toward their goal of expanding ties with Asian markets.
The U.S. could help strengthen these efforts by supporting broader Latin American participation in the
TPP. While adding new Latin American countries to the TPP talks is unlikely before the initial deal is cut, U.S. officials should help
prepare other partners in the hemisphere for accession in the coming years. Such an effort should give
priority to members of the Pacific Alliance, but should also reflect the U.S. interest in re-engaging Latin
America more broadly—an interest that has been conspicuously on the back burner of U.S. foreign and
economic policy for the past decade.
Shifting Hemispheric Tradewinds
A decade since countries in the Americas began pursuing the creation of a Free Trade Area of the Americas (FTAA), regional trade policy has
fractured. The effective demise of the FTAA occurred around the same time as the collapse of the Doha Development Round in the WTO in
2008. With
both of the broad trade discussions effectively derailed, Latin Americans have focused on
bilateral FTAs, many of them with the U.S., the EU and, increasingly, Asian countries. The U.S., after
finally passing FTAs with Peru, Colombia and Panama, has set its sights across the Pacific and the
Atlantic. On the Asia-Pacific side, TPP is the trade policy manifestation of the Asian pivot of U.S. policy.
On the Atlantic side, U.S. plans for the Trans-Atlantic Trade and Investment Partnership (TTIP) with the European Union (EU) is its counterpart.
The fade-out of the FTAA has left in its wake a process of incremental focus and integration of the Pacific-oriented countries of the Americas.
But it has had negative consequences as well. The once-promising Mercosur has taken a political—and protectionist—turn. The Andean
Community has been plunged into an identity crisis with the withdrawal of Venezuela and with remaining members pursuing radically different
trade policy paths.
On the Pacific front, Chile, Colombia, Mexico, and Peru have translated
a shared approach to trade policy into the
formation of the Pacific Alliance.3 This initiative represents a formal effort to synchronize members’
trade commitments, with the aim of using the Pacific Alliance as a platform for enhanced trade with
their most dynamic trading partner—East Asia.
Expanding international trade is vital to preventing nuclear world war
Weede, 10 – professor of sociology at the University of Bonn (Erich, “The Capitalist Peace and the Rise
of China: Establishing Global Harmony by Economic Interdependence” International Interactions:
Empirical and Theoretical Research in International Relations, DOI:10.1080/03050621003785181)
Historically, the rise and fall of great powers has been related to great wars. Both world wars of the
twentieth century would not have been possible without the previous industrialization and rise of
Germany. World War II, which in Asia was a war between the Japanese on the one hand and the
Western powers and China on the other hand, would not have been conceivable without the previous
rise of Japan. The early phase of the Vietnam War has to be understood against the background of a
declining France. If the rise and fall of great powers indicate great dangers, then one should question
whether the world can peacefully accommodate a rising China. Here it is argued that the capitalist peace
offers the best way to manage the coming power transition between China and the West. 1
China is rising. In the thirty years after Deng Xiaoping began economic reforms the Chinese economy
grew nearly by a factor of ten. Recently, the West suffered from negative growth rates whereas China
grows by about 8 percent a year. The difference in growth rates between China and the West has been
about 10 percent. A power transition of such speed is without historical precedent. Given its size China
is a “natural” great power—unlike Britain, France, or Germany. Even the combined population of the
United States and the European Union does not approach the population size of China. If China
outgrows poverty, then it must become a world power.
Although war in the nuclear age threatens to be much worse than any previous world war, fear of
nuclear war itself might exert some pacifying impact. Such fear, however, need not be our only
protection against future wars. Economic interdependence itself makes war less likely. One finding of
quantitative research is that military conflict becomes less likely if a pair of nations—say China and the
United States, or China and India, or China and Japan—trade a lot with each other (Hegre 2009; Oneal
and Russett 2005; Russett and Oneal 2001). Fortunately, all of them do. One may label this effect “peace
by free trade”. Foreign investment has some beneficial impact, too (Souva and Prins 2006). Moreover,
economic freedom reduces involvement in military conflict, and financial market openness reduces the
risk of war, too (Gartzke 2005, 2007, 2009). Quantitative research has demonstrated that there is
something like a capitalist peace.
Until a few years ago it looked as if the democratic peace were solid and robust whereas the capitalist
peace between free traders was less so. Now, however, the democratic peace looks more conditional: It
is not only restricted to relations between democracies, but might also be restricted to developed or
market democracies (Mousseau 2005, 2009). It has been doubted whether it applies to the poorest
democracies. Moreover, the less mature or perfect the democracies are, the weaker the democratic
peace is. By contrast, peace by free trade or economic freedom looks more robust. Pacifying effects are
not restricted to relationships between free traders on both sides of a dispute (Russett 2009:19).
Moreover, the trade to GDP ratio is no longer the only or even the best way to document the pacifying
effects of economic freedom or the invisible hand. By applying innovative measures of free markets,
such as avoidance of too much public property ownership and protectionism, one may argue in favor of
much more robustly pacifying effects of economic freedom than of political freedom (McDonald 2009).
The occurrence of World War I is the standard argument against peace by trade or economic
interdependence because there was substantial economic interdependence between the Western
powers and the Central European powers. Certainly, World War I serves as a useful reminder that
commerce makes war less likely without making it impossible. But World War I is not as much of a
problem for capitalist peace theory as frequently assumed. Moreover, there was no democratic
contribution to pacification because the Central European powers were, at best, imperfect democracies.
By contemporary standards, even the democratic character of the United Kingdom was not beyond
suspicion because of franchise limitations. As far as trade linkages were concerned they were strongest
where least needed—between Britain and France, between Britain and the United States, between
Germany and Austria-Hungary. These pairs ended up on the same side in the war. Whereas strong trade
links between Germany on the one hand and Britain or Russia on the other hand did not prevent them
from fighting each other, Germany and France exemplify weak trade ties where strong ties were needed
most in order to avoid hostilities (Russett and Oneal 2001:175).
Skeptics rightly observe that increasing trade did not prevent World War I, but they overlook that trade
volumes rose not because of free trade policies, but in spite of mounting protectionism. Trade increased
because of falling transportation costs, but in spite of protectionist policies. Finally, capitalist or
commercial peace theory is an admittedly incomplete theory. It says only how risks of war may be
reduced but it says nothing about what generates them in the first place. But commercial peace theory
is certainly compatible with World War II, which was even bloodier than the previous world war as well
as with the later reconciliation between the former Axis powers and the West. There was little trade
between the Western powers and the Axis powers. Since the Axis powers were no democracies, the
democratic peace could also not apply between the Axis and the West.
The different long-term effects of the settlements of both world wars may be explained by differences in
application of a capitalist peace strategy toward the losers of the wars. After World War I France
influenced the settlement more than anyone else. It did not even think of a commercial peace strategy.
Misery and desperation within Germany contributed to Hitler's empowerment and indirectly to World
War II. After World War II, the United States, however, pursued a capitalist peace strategy toward the
vanquished. It promoted global free trade and subsidized even the recovery of the losers of the war.
Germany and Japan became prosperous and allies of the United States.
By and large, there is a lot of agreement within the research community that democracies rarely fight
each other. If all major countries, including China, were ever to become democracies, then the risk of
major power war or global war could be dramatically reduced. But the risk of conflict and war seems to
be highest between democracies and autocracies rather than between two autocracies. That is why the
U.S.-China dyad looks at risk. Moreover, there remain some doubts concerning the effectiveness of the
democratic peace where nascent, or poor or not yet “contract intensive,” or unstable democracies are
concerned. Since China is still poor, since China cannot avoid a period of transition, if it ever becomes a
democracy, a democratic peace between China and other major powers looks more like a distant hope
than like a pacifier that might become available in the near future when the Chinese economy might
equal the American one in size, albeit not yet in per capita income.
Although few people in China expect a fast transition to democracy in the near future, the prospect for
democracy in China is not hopeless. There is experimentation with elections at the local level. China is
moving slowly toward the rule of law. Individual freedom has expanded. The press becomes
commercialized and investigative. For the sake of continuing economic growth and the achievement of a
power status comparable to the United States, China has to become a knowledge society. The
knowledge society requires liberalization. Those who criticize China for not moving faster toward
democracy should remember some lessons from Western history. The sequence of establishing national
identity, the rule of law, representative or accountable government, and mass franchise seems to
matter. Establishing national identity first, the rule of law and accountable government second, and the
mass franchise last is the best sequence to avoid political instability. China might need some time to
institutionalize the rule of law and to move toward accountable government before it is ready for mass
elections.
Economic cooperation and interdependence provide much more hope for the immediate future than
democratization. The more countries trade with each other, the less likely military disputes between
them become. Given the size of both economies and the distance between America and China, they
already trade a lot with each other. As China is the first Asian giant to become capable of challenging the
U.S., these pacifying ties happen to be in place where they are most needed. From a capitalist peace
perspective there is another piece of good news. Although trade between India and China had been
negligible for a long time, since 1999 it has grown. By 2009, China had become India's biggest trading
partner. Economic interdependence or trade may exert some pacifying impact on the relationship
between Asia's neighboring giants. Comparing the war-proneness of the Middle East with the avoidance
of major military conflicts in the Far East over the past three decades, it is hard to avoid the conclusion
that the East Asian focus on economic openness and interdependence, on commerce, exports and
growth did contribute to the pacification of East Asia.
The qualifications which might be required to the peace by trade proposition do not negate these
optimistic conclusions. Possibly, it is not trade but cross-border investment, capital market integration
or even a commitment to economic freedom that pacifies most effectively. Or, it might even be the
contract-intensity of economies (Mousseau 2009). Should future research confirm a shift of focus away
from trade to other aspects of economic interdependence as the main pacifier, then optimism about
Sino-American relations might still be based on some kind of capitalist peace. By contrast to Chinese
hesitation to democratize, the seriousness of China's commitment to global economic integration
deserves admiration. China is extremely open for such a big economy. Its share of world trade increased
eightfold within 25 years after its economic reforms.
From an international trade perspective, all of East Asia has recently become a Chinese sphere of
influence. China is the most important destination of Japanese, South Korean, and Taiwanese exports—
ahead of the United States. Although Taiwanese politicians around the turn of the millennium rejected
the idea of reunification on the Mainland's terms, and although some of them were attracted to the
idea of declaring the legal independence of Taiwan, economic and social ties across the Taiwan Strait
grew vigorously at the same time. Taiwanese companies employ millions of people on the mainland.
About a million people from Taiwan live on the Chinese mainland. Mainland China has been the
preferred destination of Taiwan's foreign investment. Since the lateral escalation of a military conflict
between the People's Republic of China and Taiwan constitutes the most plausible scenario whereby the
U.S. and China might get into a war, economic interdependence between China and Taiwan contributes
to the preservation of peace. Recently, political relations between the People's Republic of China and
the Republic of China on Taiwan have improved fast. Given the record of Sino-Japanese wars in the past
and the power of these neighboring states, the extent of Sino-Japanese economic cooperation provides
another reason for optimism. The capitalist peace stands a chance to apply between China and its
neighbors and competitors.
On the one hand, one may argue that the U.S. current account deficit and the U.S. bilateral trade deficit
with China served the purpose of stabilizing China and integrating it into a U.S. dominated world order.
Then, the economic relationship between the U.S. and China already served the national interests of
both countries, at least until 2008. On the other hand, it has been argued that the global imbalance
between Asian capital exports and American capital imports contributed to the crisis (Wolf 2009:100).
Then the interdependence between China and the West explains not only how the Chinese economy
can be affected by a crisis which began in the American housing market and banking system. The same
interdependence, or more specifically, a division of labor, where China exports goods in return for
American treasury bonds and where Americans consume too much, might be one of the determinants
of the crisis. But this conceivable link between Chinese or Asian savings, American capital imports, and
the current crisis is by no means generally accepted. The Fed and its monetary policy might be the main
culprit. Had it followed the “Taylor rule” in setting interest rates in response to growth and inflation
rates, then there would have been higher interest rates between 2002 and 2007, much less of a housing
boom in the U.S., and at worst a minor recession instead of the descent into the depression from which
the world has suffered (Taylor 2009). Or, the promotion of home ownership for everyone—without
regard of credit worthiness—should have been avoided (Sowell 2009).
It is important to note that the capitalist peace is a less dangerous idea than the democratic peace. As
the example of the American wars in Afghanistan and Iraq demonstrate, the idea of a democratic peace
has been married to a crusading spirit in the recent past (Russett 2005). Moreover it was combined with
an utter disregard of the meager prospects of success in bringing democracy to poor or oil-exporting
societies with a long heritage of autocracy (Weede 2007). Legitimating current wars by hopes for regime
change and future pacific benefits is dangerous. By contrast, the capitalist peace depends on decisions
by private business. As the Sino-American dyad or even the PRC-Taiwan dyad demonstrate, strong and
growing economic ties need not wait for regime similarity, democratization, or a lot of political
agreement with each other. China's positive response to the opportunity of exploiting its comparative
advantages within a global market, as well as its lack of readiness to reform its regime according to
Western preferences, demonstrate that a capitalist peace between China and the West is feasible,
whereas a democratic peace is not for a considerable time to come.
There are two reasons why the capitalist peace is more important than the democratic peace. First, the
balance of empirical evidence has been shifting from supporting pacifying effects of democracy toward
supporting pacifying effects of commerce and economic freedom, of trade and capitalism. Whereas
early research investigated only pacifying effects of trade, more recent work also looks at capital market
integration, protectionism, state ownership or economic freedom. It is too early to say which specific
feature of market economies is most effective in underwriting peace. But one may dare to say that free
markets promote peace. Second, the democratic peace—where its existence has rarely been called into
question, i.e., among mature and prosperous market-oriented democracies themselves—is an effect of
commerce and capitalism. Without capitalism and free trade, without economic development and
prosperity, democracy is unlikely to be established and to survive (Inglehart and Welzel 2009; Lipset
1994). In this perspective, the democratic peace is little more than a component of the capitalist peace.
The promotion of peace by peaceful means is obviously preferable to the promotion of peace by war.
The shining example of capitalist prosperity in the West, together with the demonstration by the early
East Asian tiger economies that the West permits poor countries to catch up, sufficed to elicit homegrown reforms in China and elsewhere in Asia which improved the material conditions of life of
hundreds of millions of people. There is an important difference between the promotion of peace by
capitalism and commerce and its promotion by democratization. If one wants to enforce
democratization by military means, then one may run into severe problems of implementation, as the
United States has found out in Afghanistan and Iraq. The capitalist peace requires nothing more than the
virtue of patience. It relies on limited government, whereas war easily expands the scope of
government. Globalization promises to enlarge the market and therefore to increase the division of
labor and to speed productivity gains and economic growth. By promoting economic freedom, trade,
and prosperity, we simultaneously promote peace.
For the capitalist peace to apply, there are two requirements. First, capitalist peace theory has to be
valid. In spite of some open issues, the research literature justifies some optimism in this regard.
Second, global capitalism has to demonstrate good health and vitality. Since the financial and economic
crisis of 2008, it is difficult to be optimistic in this regard. Open markets in rich countries for exports
from poor countries generate credibility for free market institutions and policies. They complement
export-oriented growth strategies in poor countries. Foreign direct investment by private enterprises
and donations from private Western sources to poor countries are more likely to have a positive effect
on the growth path of poor countries than official aid does. The more capitalist the rich countries
become, the more they provide a model for emulation by poor countries as well as a market and a
source of technology and investment for them. By resisting protectionism Western nations may
simultaneously strengthen their own economies, improve the lot of the poor in the third world, and
contribute to the avoidance of conflict and war. In a period of financial distress or during a global
economic crisis, resistance to protectionism and other attempts to roll back capitalism are the most
important tasks for those who prefer prosperity and peace over poverty and war.
In the first five months of 2009 global trade did decrease by as much as 30 percent. Globalization seems
to be in retreat. When discussing the stimulus package, the American Congress had to be persuaded to
include only a watered down “buy American” clause. It is still dubious whether the Obama
administration is ready to lead the global fight against protectionism. During the depression of the
1930s the fight against protectionism was lost at the beginning when Smoot and Hawley succeeded in
1930 to raise American tariffs. Although the rise of Asia's demographic giants, China and India, makes a
capitalist peace more urgent than ever, politicians do not fight hard enough for the Doha Round and
global free trade.
Even if global trade isn’t perfect, protectionism is far worse for poverty – the solution
to inequality within the trading system is further liberalization
Teson, 12 – Tobias Simon Eminent Scholar at Florida State University College of Law; former career
diplomat for the Argentine Foreign Ministry (Fernando, WHY FREE TRADE IS REQUIRED BY JUSTICE,
Social Philosophy & Policy29.1 (Jan 2012): 126-153, proquest)
Given the advantages of free trade, the role of the World Trade Organization (WTO) in liberalizing trade
has been positive.56 By enforcing the most-favored-nation clause, the WTO system has dramatically
lowered tariffs and other trade barriers in the last fifty years or so, with the corresponding global
economic growth.57 However, while the current WTO regime is preferable to a generalized
protectionist regime, it has a number of imperfections from the standpoint of justice and efficiency.
First, current arrangements allow governments to over-protect, thus hampering the chances that the
poor will participate in the world economy. One problem with the WTO treaty, therefore, is that it does
not liberalize trade enough.58 In particular, the WTO rules that allow protection of agriculture by rich
countries are highly objectionable, as I have already pointed out. The WTO should enforce the mostfavored-nation clause without exceptions if it is to be consistent with global justice. 59 Second, although
generally structured to gradually lower trade barriers, the WTO regime is partly predicated on outdated
mercantilist notions: governments seek to secure foreign markets access for exporters, thus treating
access to their markets as a bargaining "chip.â[euro] Because imports benefit consumers, the notion
that granting access to one's markets is a concession to other countries is false. A government that
lowers tariffs helps its own citizens. This fact is, yet again, concealed by the nationalist rhetoric of
protectionism. So the WTO is suboptimal from the standpoint of global justice, and it is certainly inferior
to more liberal alternatives, like unrestricted trade. 60
Still, however bad the present system may be, protectionism is worse . Current critics of the WTO,
while rightly criticizing protectionism in rich countries, wrongly claim that developing nations can
sometimes help their economies by enacting protectionist measures. The institutional solution that
could bring the world closer to the ideal of unrestricted trade is a WTO-like organization whose sole
purpose is to ensure that nations liberalize trade. On the other hand, excessive international regulation
restrictive of trade, even if meant to address a genuine market failure, is often counterproductive with
regard to the poor.
The main contrary view is represented by the work of Thomas Pogge.61 He claims that the global order,
and especially the world trade system, is directly responsible for poverty.62 According to Pogge, the
global order, established and dominated by rich countries, systematically confines millions of persons to
extreme poverty. This happens through a variety of mechanisms, of which three are salient. First, rich
countries refuse to liberalize agriculture. They protect their own rich farmers, thus harming farmers in
the developing world. Second, rich countries have succeeded in enforcing intellectual property rights on
pharmaceuticals, which exacerbates health problems in the developing world. And finally, the global
order controlled by rich countries is too deferential to sovereignty. This allows corrupt and tyrannical
elites in the developing world, in complicity with the West, to exploit their subjects.
Pogge deserves credit for having awakened new audiences to the awful reality of world poverty; for
having called attention to the objectionable protectionist policies by rich countries; and for having
challenged the prevailing notion of sovereignty upon which the international order relies. On the latter
issue, the sanctity of borders and its political incarnations, nationalism and national interest, have
harmed many persons in history and done much to undermine justice in the world at all levels.
Economic relations, no less than political relations, often proceed without sufficient scrutiny of the
moral credentials of governments. Global institutions such as the World Bank and the International
Monetary Fund are subject to criticism on this score, because they assist developing countries without
pausing to consider whether they are thereby consolidating bad governance and, eventually,
perpetuating poverty as well.
The problem with Pogge's theory is that his causal claim is wrong. The global order, far from being the
cause of poverty, is responsible for the vast amelioration of extreme poverty over the last one
hundred years or so. As Mathias Risse explains, according to Pogge's own benchmarks, the global order
"has caused amazing improvements over the state of misery that has characterized human life
throughout the ages.â[euro] 63 Once one controls for domestic institutions, Pogge's attempt to blame
rich countries loses much of its superficial appeal. Rich countries got rich for quite diverse reasons,
usually anchored in Europe's embracing of capitalism and technological innovation. The literature points
to two of such reasons: the emergence of good, stable institutions, and the establishment of efficient
markets. 64 Even when those institutions were morally objectionable to our modern eyes, they were
nonetheless hospitable to growth and innovation. As David Landes put it:
The economic expansion of medieval Europe was ... promoted by a succession of organizational
innovations and adaptations, most of them initiated from below and diffused by example. The rulers,
even local seigneurs, scrambled to keep pace, to show themselves hospitable, to make labor available,
to attract enterprise and the revenues it generated. 65
This is known as the institutionalist thesis, the view that poverty and stagnation are caused by deficient
institutions, including, but not limited to, insufficient protection of private property and freedom of
contract. Pogge's attempt to dismiss the massive evidence in favor of the institutionalist thesis is, I think,
unsuccessful. 66 Some of his more specific empirical claims are dubious as well. For example, Pogge
cites the rich countries' protectionist agricultural policies as evidence that the global order (which allows
these practices) causes poverty. While those unjust practices exacerbate the problem, they are far from
being the main cause of world poverty. The explanation understates the importance of domestic
institutions, as explained. 67 It suggests that stagnation in the developing world derives mainly or only
from what others do, and thus fails to control for the ruling elites' contribution to that stagnation.68
Further, whether the West's protectionist policies harm farmers of a given developing country depends
on the size of the market for that country's exports. Argentina, for example, sells her beef and grain
mostly to Russia, China, India, and Egypt. Given that the rising demand for agricultural products (at the
time of this writing) comes from non-Western countries, farmers in developing countries might be in a
particularly advantageous situation, as they do no longer depend on exporting those products to
Western markets. They are certainly less likely to be harmed by the West's trade policies. Of course, this
is an empirical issue and will vary for particular countries and products, but the truth is that
protectionist policies harm first and foremost the country's own consumers. Of course Pogge is correct
in calling for the dismantling of the West's protectionist policies. As I argued, that call is part of the
general call to liberalize trade for moral reasons. But saying that liberalizing agricultural trade will help is
not the same as saying that the current protectionist policies of Western powers are the main cause of
poverty.
1ac China
China chooses to forgo TPP negotiations now – incentives to join aren’t powerful
enough
Solís 13 - senior fellow at the Brookings Center for Northeast Asian Policy Studies, and associate
professor at American University PhD in government and an MA in East Asian Studies from Harvard
University, and a BA in international relations from El Colegio de México (Mireya, “The Containment
Fallacy: China and the TPP,” Brookings Institute, 5/24/13, http://www.brookings.edu/blogs/upfront/posts/2013/05/24-china-transpacific-partnership-solis)//AC
In recent commentary for the Financial Times, David Pilling argues that the central objective of the Trans-Pacific Partnership trade negotiations
is the exclusion of China. In his view, the desire to build an “anyone but China” club is due both to the perception that China got an easy pass
when it joined the WTO and has continued to flaunt international trade and investment rules; and to the articulation of a larger political
strategy to marginalize this emerging superpower. Pilling goes on to predict that the TPP will fail to deliver major liberalization as the traditional
pattern of shielding sensitive sectors will emerge, and admonishes that only a much diluted trade agreement faces a realistic chance of
ratification given the fractured consensus on the new proposed rules. In this rendition, the TPP appears politically myopic and economically
irrelevant. The
argument that the TPP is a club that bars Chinese entry is inaccurate and unhelpful. China, like
Chinese leadership will judge TPP
membership to be in their country’s national interest and whether TPP members can be persuaded that China is prepared
to abide by the negotiated disciplines is a separate matter. But it is important to dispel the notion that the TPP
precludes Chinese entry. In fact, this trade agreement scores better than most in incorporating an accession mechanism that has
already delivered membership expansion from four to twelve members –now comprising 40% of world GDP. More fundamentally, it is hard
to understand why TPP countries would pursue the counter-productive and unfeasible goal of
marginalizing China. China sits at the apex of the world economy as it ranks number two in share of
world GDP and is at the center of global supply chains. A trade agreement that by fiat sought to defy these fundamental
economic realities would be foolhardy indeed. Hence the TPP concept is expansive: it aims to eventually develop an
Asia-Pacific wide platform of economic integration, not to draw lines encircling China. If Chinese
exclusion were the selling point of the TPP for countries like Japan, then one would be hard pressed to
explain why the Japanese government is concurrently negotiating two major trade agreements with
China: a trilateral FTA in Northeast Asia and an East Asian trade agreement known as the Regional Comprehensive Economic Partnership
(RCEP). And the same is true for all other Asian countries in the TPP who already partake in the ASEAN-China FTA and are
participating in the RCEP talks. The “us versus them” dynamic of security alliances is not really applicable to free
trade agreements. The noodle bowl that characterizes the maze of FTAs illustrates the fact that in the
world of international trade overlapping memberships render moot purely exclusive arrangements.
Ascribing an anti-China objective to the TPP is not helpful on three main fronts: 1) it provides political
cover to protectionist interests, who argue that they should not be asked to undertake painful economic
adjustments for the sake of trade agreements driven by geopolitical concerns; 2) it sends a chilling
message to prospective members, who may fear that in joining TPP they will be seen as enlisted in the
anti-China camp; and 3) it will discourage China from finding points of convergence with the TPP agenda
if this is seen as capitulating to an American strategy of containment. The most fundamental challenge
to the TPP project vis-à-vis China is not that it is built around a faulty notion of containment, but rather
that it may not constitute a powerful enough enticement to propel China to sign on to these new
standards on trade and investment. China so far has reacted by accelerating its own trade initiatives in Asia. The risk that
the United States and China will remain for the foreseeable future in separate trade groupings, without
a significant bilateral dialogue on trade and investment, is very real. TPP negotiators cannot postpone
the task of fashioning a strategy to engage China until after the TPP agreement is completed. They must
be mindful of the fact that rules must be evaluated both in terms of their quality and dissemination
any other APEC economy, has the right to request entry into the TPP. Whether the
potential. China must see in the new trade agenda a deal not unlike its accession to the WTO: while hefty commitments are to be expected,
the accompanying domestic reforms will pay off handsomely in terms of improved economic performance.
Joint TPP negotiations incentivize Chinese participation within the TPP to access the
North American market
Wilson 13 - Associate at the Mexico Institute of the Woodrow Wilson International Center for Scholars
(Christopher, “A U.S.-Mexico Economic Alliance: Policy Options for a Competitive Region,” New Ideas for
a New Era: Policy Options for the Next Stage in U.S.-Mexico Relations, May 2013
http://www.wilsoncenter.org/sites/default/files/new_ideas_new_era.pdf ) //JG
The United States and Mexico are among the most open economies in the world, having integrated their
manufacturing sectors through NAFTA and having negotiated trade agreements granting preferential
access to a combined fifty-plus nations and two-thirds of global GDP. This presents a tremendous
opportunity for the sale of jointly produced exports and cooperation on global trade issues to ensure
North American products receive fair treatment around the world. Whether in the Trans-Pacific
Partnership (TPP), a trade agreement being negotiated by 11 Pacific Rim countries, or other initiatives,
the United States, Mexico and Canada could improve their chances of successfully completing mutually
beneficial trade deals by negotiating and working to implement them as a bloc , recognizing that each
country shares in the advantages of a competitive North America. Though the TPP is the next step , it
should be understood in the context of a broader strategy to drive progress on the global trade agenda.
If the current parties successfully negotiate a comprehensive, 21st Century trade agreement linking the
world’s largest economic region (North America) to its most dynamic (Asia-Pacific), China may decide it
has more to gain by joining in than by sitting out, which would in turn create a strong incentive for
longstalled progress at the World Trade Organization, strengthening the competitiveness of regional
exports. A similarly continental approach might also be considered as the U.S. gets ready to begin
negotiating a trade agreement with the European Union.
China’s entrance solves US-Sino relations
Gross 7/9/13 - Senior Associate at the Pacific Forum of the Center for Strategic and International Studies
(CSIS), is a former White House and State Department official (Donald, “Welcoming China to the TransPacific Partnership,” The Huffington Post, 7/9/13, http://www.huffingtonpost.com/donald-gross/transpacific-partnership-china_b_3562801.html)//AC
When senior officials from the United States and China meet this week in Washington for a new round of their Strategic and Economic Dialogue, the
U.S. has
an excellent opportunity to overcome a deeply divisive economic issue complicating relations with
Beijing by welcoming China's participation in the Trans-Pacific Partnership (TPP). At the time President Obama declared his strong
support for creating this new Asia Pacific trade bloc in November 2011, the administration envisioned it as a way of countering China's economic rise as part of the
Obama and U.S. officials coupled their advocacy of the TPP with a warning that the U.S.
was "growing increasingly impatient and frustrated with...Chinese economic policy and the evolution of
the U.S.-China economic relationship." They called on China to "play by the rules" and criticized it for
"gaming the system." In the words of David Pilling, a leading columnist for the Financial Times, the U.S. vision for the TPP
amounted to an "anyone-but-China club" which had the "unstated aim" of creating a trade area "that
excludes the world's second biggest economy." As a "comprehensive high-level agreement" among the 12 countries now in negotiations,
the TPP would cover about 40 percent of global output and about one-third of world trade. Not surprisingly, many Chinese commentators initially
saw the TPP as an instrument for containing China. Beijing reacted to the U.S. announcement in the fall of 2011 by
accelerating its own efforts to build a new free trade pact called the "Regional Comprehensive Economic Partnership" among the 10 ASEAN countries
U.S. "pivot to Asia."
plus five countries that have current free trade agreements with ASEAN -- South Korea, Japan, India, Australia, and New Zealand. China also pushed ahead on
The risk of the United
States and China moving toward competitive Asian trade blocs peaked in March 2013, when the U.S.
persuaded Japan to join the TPP negotiations at a time of mounting conflict with China over disputed
island territories in the East China Sea. Prime Minister Shinzo Abe declared that joining the TPP would strengthen Japan's "security" and
negotiations to reach a trilateral trade agreement with Japan and South Korea as well as a bilateral agreement with Seoul.
emphasized the shared "values of freedom, democracy, basic human rights and the rule of law" among TPP members. Abe failed to mention that the U.S.
previously invited Vietnam and Malaysia to join the TPP negotiations, though their governments infringe human rights and curtail democracy as well as rely heavily
on the state subsidies, controlled prices and state-owned enterprises that are antithetical to the purposes of the new trade agreement. In late May, during the runup to the summit between President Obama and President Xi Jinping, China
broke the vicious cycle leading toward separate Asian trade blocs
when the Ministry of Commerce announced it would study whether to participate in the TPP
negotiations. According to the Ministry, China "will analyze the pros and cons as well as the possibility of joining
the TPP, based on careful research and according to principles of equality and mutual benefit. And we also
hope to exchange information and materials with TPP members on the negotiations." China's recently declared interest in the TPP
reflects its desire to improve relations with the United States, reduce government involvement in the
private sector and help shape the rules of the Trans-Pacific Partnership. If China seeks membership in the TPP
after the regional free trade agreement is completed, it would have to accept all the terms that were
previously negotiated. By inviting China to join the negotiations for the TPP at the Strategic and
Economic Dialogue, the United States would strengthen the likelihood of the U.S. benefiting both from
China's long-term economic growth and its support for international institutions on which the U.S.
relies. As Professor John Ikenberry of Princeton University puts it: The "United States cannot thwart China's rise, but it
can help ensure that China's power is exercised within the rules and institutions that the U nited States
and its partners have crafted ... that can protect the interests of all states in the more crowded world
of the future." Most importantly, including China in the TPP would advance crucial objectives of American
economic policy -- obtaining greater access to the Chinese market for U.S. goods and services,
significantly reducing the Chinese government's role in the private sector, protecting intellectual
property, and fostering greater foreign investment in both China and the United States. This week's Strategic
and Economic Dialogue is an opportune time to make it manifestly clear the United States welcomes Beijing's
participation in the Trans-Pacific Partnership and, in so doing, resolve an issue that has hurt U.S. relations with
China for far too long.
Relations solve inevitable US-China conflict and arms race
Roy 12 - senior United States diplomat specializing in Asian affairs, three-time ambassador, Vice
Chairman of Kissinger Associates, Inc., Chairman of the Hopkins-Nanjing Advisory Council (J. Stapleton,
“DEALING WITH A RISING CHINA,” The Wilson Center, November 2012,
http://www.wilsoncenter.org/sites/default/files/policy_brief_dealing_with_a_rising_china.pdf)//AC
The Policy Context: Sustainable U.S. Engagement with East Asia The
United States and China are both in the process of
selecting the leaders who will guide their respective countries for the next few years. These leaders will face a
host of daunting domestic and foreign issues that will demand their attention. None is more important than the task of
finding ways to block the current drift of U.S.- China relations toward strategic rivalry. If both
countries do not properly address this drift, it will become more difficult, perhaps dangerously so, to preserve
the climate of peace and prosperity that has fostered China’s rise and made East Asia such a dramatic
success story. The U.S. strategy of rebalancing in East Asia, as reflected in increased U.S. attention to the region, particularly Southeast
Asia, is part of a coherent U.S. policy approach. The policy does not seek to contain China but hopes to restore the region’s confidence that
the United States, despite its budget difficulties, is committed to maintaining a robust regional presence. With the conspicuous exception of
China, this approach has been broadly welcomed in East Asia, although not without underlying concerns. China’s more assertive behavior
following the 2008 financial crisis increased neighboring countries’ desire for the United States to continue to play a balancing role. However,
these same countries worry that the United States may go too far in provoking China by trumpeting U.S. determination to pivot back into East
Asia and to reassert a leadership role. In addition, America’s closest friends and allies in the region share the concern that the United States,
distracted by its domestic difficulties, will lack the staying power to remain fully engaged in East Asia. This ambivalence underscores the fact
that the credibility of U.S. policy in East Asia rests to a significant degree on the perception in Asian capitals of how effectively Washington is
managing its relations with Beijing. East
Asians want the United States sufficiently engaged to deter China from
using its growing military capabilities in inappropriate ways. At the same time, they do not
want the United States to
rely excessively on the military component of its regional presence, which could have an undesired polarizing effect. Above all, these
countries fear that unconstrained U.S.-China
competition could make China a more dangerous neighbor and
increase pressures on them to choose between China and the United States, a choice they do not want
to make. These considerations underline the importance of using measured rhetoric in defining U.S. regional policy. In contrast to the Cold
War era, countries in East Asia are seeking a sustainable U.S. political, economic, and military presence in the region. They do not want a
robust affirmation of U.S. leadership, which would highlight regional rivalry between China and the United States. Washington also should
show respect for the concept of centrality of the Association of Southeast Asian Nations (ASEAN) and not appear to challenge the leading role
played by the ASEAN countries in creating a new regional architecture over the past decade and a half. The Policy challenge: creaTing a new
TyPe of bilaTeral greaT Power relaTionShiP wiTh china The U.S. rebalancing strategy does not address the principal challenge in managing U.S.
relations with a rapidly rising China: how to deal with the destructive dynamic created when a rising power contests the positions of an
established power. The governments of both China and the United States are aware of the lessons from history on this question and are
determined not to let history repeat itself. On a number of public occasions in 2012, Secretary of State Hillary Rodham Clinton has spoken of
the need to find a new answer to the ancient question of what happens when an established power and a rising power meet. As she put it,
“The
United States is attempting to work with a rising power to foster its rise as an active contributor to
global security, stability, and prosperity while also sustaining and securing American leadership in a
changing world.” She added that “We are trying to do this without entering into unhealthy competition,
rivalry, or conflict.” In her view, China and the United States “are, together, building a model in which we
strike a stable and mutually acceptable balance between cooperation and competition.” This new
circumstance, in her words, requires “adjustments in our thinking and in our actions on both sides of
the Pacific.”1 The United States is not the only country that is talking in this fashion. China’s top foreign policy official, State Councilor
Dai Bingguo, has spoken in very similar terms. He has emphasized the imperative of building a new type of
China-U.S. relationship so that the two countries can break what he called the “iron-clad law” of history
that dooms established powers and rising powers to “go to war, hot or cold alike.” He has also acknowledged
that this new type of relationship should balance competition and cooperation. In his words, it “is impossible for
China and the United States not to have any competition. But such competition should be healthy and galvanizing to each
other. It should be understood in the context of cooperation.” Both countries, in short, have defined a
common goal of creating a new type of relationship that strikes a balance between cooperation and
competition. If they fail in this endeavor, they will be hard put to steer clear of the dangerous
precedents of the past. The STraTegic Problem This need to strike a balance between cooperation and
competition is the heart of the strategic problem. Both Washington and Beijing consider good bilateral
relations to be vital. But their growing strategic rivalry has the potential to evolve into mutual
antagonism. A stronger China will undoubtedly see itself as again becoming the central player in East
Asia. The United States, for its part, has long been a Pacific power with formal alliances and strategic ties
throughout the region. As successive U.S. presidents have made clear—including, most recently, President Barack Obama during his
November 2011 visit to the region—the United States intends to remain actively engaged in East Asia. The question for
the leaders of both countries is whether they can find a solution to this conundrum that lies at the heart of the bilateral ties between
Washington and Beijing. This
solution will be
the key to building
the new type of U.S.-China relationship that top
leaders on both sides see as necessary to avoid a drift toward confrontation . Where do we stand in this process? The
answer is that both China and the United States have a discrepancy between their respective defense
responses and declared strategic goal of preventing a drift toward confrontation in the U.S.-China
relationship. This condition undermines the coherence of the overall strategy. The Chinese approach is
based on developing what the Chinese call counterintervention capabilities, which are aimed at sharply
increasing the risks for U.S. forces operating in a hostile environment in areas adjacent to Chinese
territory. The U.S. term for this emerging People’s Liberation Army capability is anti-access/area denial. The U.S. Defense
Department is responding with a concept jointly developed by the U.S. Air Force and Navy called Air Sea
Battle. Because the concept is based on attacking capabilities on the China mainland, it is essentially a
formula that could quickly escalate to all-out war . Even if
reaction process
conflict on this scale is unlikely and preventable,
this action-
holds the potential for what one writer has called a “ military capabilities competition” of
unlimited duration . Such a competition not only has serious budgetary implications but also is certain to increase mutual
mistrust between Washington and Beijing. In other words, Chinese and U.S. actions and their declared strategic goals
do not yet conform with each other. A complicating factor is that despite the commitment of leaders in Washington and Beijing
to the goal of developing a positive, cooperative, and comprehensive bilateral relationship, public opinion in both countries is divided on the
question of whether the other is a friend or a potential adversary. Meanwhile, both countries’ military establishments are busy preparing for
Failure to address this problem forthrightly will make it more difficult to manage. Clearly,
active measures are needed by leaders in Washington and Beijing to address the trust deficit between the
two countries that contributes to the drift toward confrontation. Giving high priority to this strategic
challenge will make other bilateral problems easier to manage. This challenge will be the critical test of
leaders in both countries.
worst-case scenarios.
Extinction
Straight Times 2k (Ching Cheong, Senior Writer at the Strait Times, “No one gains in a war over Taiwan,”
June 25th, Lexis)
THE high-intensity scenario postulates a cross-strait war escalating into a full-scale war between the
US and China. If Washington were to conclude that splitting China would better serve its national interests, then a full-
scale war becomes unavoidable. Conflict on such a scale would embroil other countries
far and near and -horror of horrors -raise the possibility of a nuclear war. Beijing has already told the
US and Japan privately that it considers any country providing bases and logistics support to any US forces attacking China as belligerent parties open to its retaliation. In
If China were to retaliate, east Asia will
be set on fire. And the conflagration may not end there as opportunistic powers elsewhere may try to
overturn the existing world order. With the US distracted, Russia may seek to redefine Europe's political landscape. The balance of power
the region, this means South Korea, Japan, the Philippines and, to a lesser extent, Singapore.
in the Middle East may be similarly upset by the likes of Iraq. In south Asia, hostilities between India and Pakistan, each armed with its own nuclear arsenal, could enter a
new and dangerous phase. Will a full-scale Sino-US war lead to a nuclear war? According to General Matthew Ridgeway, commander of the US Eighth Army which fought
against the Chinese in the Korean War, the US had at the time thought of using nuclear weapons against China to save the US from military defeat. In his book The Korean
War, a personal account of the military and political aspects of the conflict and its implications on future US foreign policy, Gen Ridgeway said that US was confronted with
two choices in Korea -truce or a broadened war, which could have led to the use of nuclear weapons. If the US had to resort to nuclear weaponry to defeat China long before
there is little hope of winning a war against China, 50 years later, short
of using nuclear weapons. The US estimates that China possesses about 20 nuclear warheads that can destroy major
American cities. Beijing also seems prepared to go for the nuclear option. A Chinese military officer
the latter acquired a similar capability,
disclosed recently that Beijing was considering a review of its "non first use" principle regarding nuclear weapons. MajorGeneral Pan Zhangqiang, president of the military-funded Institute for Strategic Studies, told a gathering at the Woodrow
Wilson International Centre for Scholars in Washington that although the government still abided by that principle, there were
strong pressures from the military to drop it. He said military leaders considered the use of nuclear weapons mandatory if the
country risked dismemberment as a result of foreign intervention. Gen Ridgeway said that should that come to pass, we
would see the destruction of civilization.
Solvency
Joint negotiations solve
US-Mexico cooperation in the TPP solves
Heymann et al 12 - James Barr Ames Professor of Law, Harvard Law School, former Deputy Attorney
General (Phil, “A Stronger Future: Policy Recommendations for U.S.-Mexico Relations,” The Wilson
Center & The Annenberg Retreat at Sunnylands, March 2012,
http://sunnylands.org/files/pages/151/stronger_f.pdf)//AC
Cooperation on Global Issues and Foreign Policy For the United States, Mexico is a key partner in international
affairs. Mexico works hard to protect the United States from terrorist threats and to weaken
transnational organized crime groups. It is a middle income country, currently holds the presidency of the G-20, and is
expected to grow steadily for many years to come. Jim O’Neil of Goldman Sachs, for example, expects Mexico to
have the seventh largest economy in the world by 2020. Mexico has long served as a bridge between
the developed and developing worlds, and the U.S. can take advantage of this fact by working closely
with Mexico on issues of common interest. Mexico, too, has much to gain from working in partnership with the
United States. Despite significant success in its role as host of the recent United Nations Climate
Change Conference in Cancun, Mexico has punched below its weight on foreign policy for several
years. To increase international clout, Mexico must become even more active in international
institutions, perhaps getting involved in UN peacekeeping operations, among other things. Mexico has an opportunity to reclaim its role
as a regional leader by working with other hemispheric partners to help Central America fight transnational organized crime and strengthen
the rule of law. The
United States, with its strong capabilities and weighty voice, should support Mexico’s
desire to take on more leadership on the regional and global stages. Policy Option: Mexico and the United
States could work together to restore the vitality of the Organization of American States, a
struggling but critically important regional institution. Such a foreign policy partnership does not mean that Mexico
must adopt U.S. positions; it just entails recognition that on many issues the countries have shared interests
and objectives. A more active support of mutual goals, such as the consolidation of democracy in the Americas, could
benefit both nations. The best forum for joint regional efforts may often be the Organization of American States. Policy Option:
Mexico and Canada have each joined the Trans-Pacific Partnership negotiations, and the United States
should work closely with its North American partners as negotiations proceed. Mexico, the United
States, and Canada have each begun to reorient their foreign policy to focus more attention on the AsiaPacific region. The question now is whether they will pivot individually or do so as members of a North
American strategic and economic partnership. In efforts to strengthen relationships with nations
throughout Asia, grow trade, or push nations to respect their WTO obligations, the countries of
North America are more competitive and convincing when working together . North American
cooperation brings together three distinct and important voices: Canada, the consummate multilateralist; Mexico, a
large and important growth market; and the United States, still the world’s top superpower. The TransPacific Partnership is an obvious place to begin to articulate and enact such a stance. The TPP has the
potential to strengthen North America’s own integration while taking steps forward toward the
strategic goals of both the United States and Mexico.
Mexico says yes
Mexico will say yes – lack of US action is the only impediment to a deal – solves a
laundry list of impacts
Oppenheimer 13 - Latin America correspondent for the Miami Herald (Andres, “US-Mexico relations:
Obama should think North America,” Latino Times, 2/5/13, http://latinotimes.com/latinos/113492-usmexico-relations-obama-should-think-north-america.html ) //JG
Despite a lot of upbeat talk about upgrading U.S.-Mexican economic relations, there will be one big
issue that will be off the table during President Barack Obama's visit to Mexico starting Thursday Mexico's request to be part of ongoing U.S. - European free trade talks. Since Obama announced his
intention to sign an ambitious Trans-Atlantic Partnership free trade deal with the 27-member European
Union earlier this year, Mexico has been pressing to be part of the deal. But judging from what I hear
from U.S. officials, the White House is not ready for that yet. Mexican officials say that while their
country already has a trade agreement with the European Union and both the United States and Canada
is negotiating their own, having separate bilateral agreements with Europe doesn't make much sense. It
would be much better for the three countries to team up and negotiate a North American-European
Union trade deal, they say. But U.S. officials say the Obama administration has its hands full with two
very complex ongoing trade negotiations _ the Trans-Pacific Partnership with several Asian and Latin
American Pacific coast countries, including Mexico, and the Trans Atlantic Partnership with the
European Union _ and can't handle anything bigger now. "For the first time in this administration, you
have two huge trade initiatives," one senior U.S. official told me. "Adding Mexico and Canada would
massively complicate negotiations with the European Union." Mexicans are not happy about this. A
North American-European Union free trade deal would help Mexico, among other things, by allowing it
to export duty free to Europe automotive industry products made with U.S. and Canadian components.
Under free trade deals' rules of origin, countries cannot export goods made with significant components
from third nations. "Likewise, the United States would not be able to export goods with Mexican and
Canadian components to Europe," Sergio Alcocer, Mexico's under-secretary of foreign relations, told
me. "It's better to have a North American deal with Europe, than three separate ones." Robert Pastor, an
American University professor and author of The North American Idea, a book proposing a closer
economic integration between the United States, Canada and Mexico, told me that the Obama
administration's decision not to include Mexico and Canada in its talks with Europe is "extremely shortsighted." "There is no better way to enhance American competitiveness in the world than by creating a
seamless North American market first," Pastor said. During his visit to Mexico, Obama is expected to
comply with President Enrique Pena Nieto's wishes to "de-narcotize" the bilateral agenda, so that the
two countries can also focus on improving economic ties. The two presidents are expected to announce
a regular cabinet-level "consultative group" on economic issues that will meet at least once a year, much
like an existing group of a half-dozen cabinet members that currently meet annually to discuss drug and
security issues. The leaders are also expected to announce plans to increase student and academic
exchanges, including a system to make it easier for Mexican students to earn credits in U.S. colleges, and
vice-versa. Pena Nieto will most likely also ask Obama to help elect Mexican candidate Herminio Blanco
as President of the World Trade Organization. Blanco and Brazil's candidate Roberto Azevedo are the
finalists for the job after several rounds of voting by WTO member countries. The winner is to be
announced by Wednesday. Both Mexico and Brazil are actively campaigning for their candidates. Mexico
argues that _ unlike Brazil, which follows more protectionist policies and has signed few free trade deals
_ Mexico is an open economy and has signed 44 free trade agreements. My opinion: Obama deserves
credit for traveling to Mexico and Costa Rica, and for paying attention to the region after having spent
little time on it during his first term. But Pastor is right: in a global economy where countries take
advantage of regional blocs to build supply chains and produce competitive goods, Obama should focus
on upgrading the 1994 North American free trade deal with Canada and Mexico. Instead of unilaterally
launching an ambitious free trade deal with Europe, Obama should first give a new push to North
America _ which would also help solve U.S. immigration, drugs, border environment and energy
issues _ and then negotiate a North American-European Union free trade agreement.
Mexico expressed desire for greater cooperation
IIP Digital 13 – US Department of State (“Mexico-United States Joint Statement,” The White House,
5/2/13,
http://iipdigital.usembassy.gov/st/english/texttrans/2013/05/20130502146755.html#axzz2a5Ro8nON)/
/AC
Joint Statement between the United States and Mexico At the invitation of President Enrique Peña Nieto, President Barack Obama
travelled to Mexico City on May 2-3 to discuss the broad range of bilateral, regional, and global issues that
bind the United States and Mexico and touch the daily lives of citizens of both countries. Building on their positive initial meeting
in Washington, D.C. last November, the two Presidents renewed their commitment to the United States-Mexico
relationship. Looking ahead to the next 4 years during which their presidencies will overlap, the two leaders noted the importance of
taking advantage of opportunities and harnessing the enthusiasm and optimism that a new stage in bilateral relations brings. The
Presidents underscored the strategic importance of the bilateral relationship and expressed a desire for
even greater cooperation between their two nations. Specifically, the Presidents focused on: 1)
economic competitiveness; 2) people-to-people connections; 3) leadership on regional and global issues; and 4) citizen security.
Economic Competitiveness Underpinning our successful United States-Mexico economic relationship are trade
and investment flows that support jobs in both countries. Bilateral trade was almost half a trillion dollars
in 2012. The two Presidents agreed on the need to continue forging a close and productive economic
relationship to enhance their nations’ competitiveness and to create more trade and investment
opportunities. With this purpose, they decided to establish a High Level Economic Dialogue, which will be chaired at the cabinet level and
focus on promoting competitiveness, productivity and connectivity, fostering economic growth and innovation, and partnering for global
leadership. The leaders intend for the first meeting of the Dialogue to take place later this year, include representatives from relevant agencies
The two leaders also
discussed the importance of the United States and Mexico working together, and with their Canadian partners, to
make North America the most dynamic and competitive region in the world. They agreed to seek a
successful conclusion to a high-standard Trans-Pacific Partnership this year that includes 21st century
provisions that significantly strengthen the North American Free Trade Agreement. They also reiterated their commitment to
and departments from both governments, and engage with relevant stakeholders, notably the private sector.
the resolution of specific trade issues between their countries, and their interest in maintaining close coordination with regards to other
relevant trade negotiations. The Presidents also underscored the importance to both countries of a secure and efficient shared border. They
noted the recent meeting of the 21st Century Border Management Executive Steering Committee, the first under President Peña Nieto’s
tenure, and agreed to support key projects and initiatives that improve infrastructure, support the efforts of local communities, facilitate the
secure flow of legitimate trade and travel, and enhance law enforcement cooperation along the border. President Obama and President Peña
Nieto welcomed the positive steps the U.S. Congress is taking to implement the Transboundary Hydrocarbon Agreement, which will enhance
energy security in North America and bolster the two countries’ responsible stewardship of the Gulf of Mexico. They look forward to full
implementation of the Agreement.
AT: Canada solvency deficit
US-Canada trade relations negotiations are already harmonized
Fast 3/14 – Canada’s Master of International Trade and Minister for the Asia-Pacific
Gateway (Ed, “US-Canadian Trade Relations: Continued Leadership on the World
Stage “, Peterson Institute for International Economics, 3/14/2013,
http://www.piie.com/publications/papers/transcript-20130314.pdf)//JL
An area such as the services trade; things such as environmental goods, government procurement, and the digital economy face restrictions
which first generation trade agreements never accounted for. That’s
why more recently Prime Minister Harper and President
Obama committed to re-energizing the Canada-US partnership by implementing two complimentary
initiatives: the Beyond the Border action plan and the regulatory cooperation council.
So far, real progress has been made to speed up legitimate trade and travel, improve and move security
to the perimeter of our two countries. Align regulatory approaches where appropriate and make it
easier for companies in both of our countries to do business with each other. Taken together, these two
initiatives represent the most significant boost to North American competitiveness and cooperation
since NAFTA.
I am going to digress for a moment. The threat of sequestration: in fact it’s a very real threat here, in the United States. It also has a very
significant impact on Canada and of course the rest of the world. One of the concerns that I would express is that if sequestration is not
addressed very soon that we will see significant withdrawal of resources at our borders that would reinstate some of the very clear barriers
that still exist at the border.
Both the Beyond the Border vision initiative as well as the Regulatory Cooperation initiative were very significant efforts at removing the
barriers that we have at our border. So I just throw out that note of caution. The impact of sequestration could and likely will be felt far
beyond the American border.
To be fair we still have a long way to go in bringing those two initiatives to fruition. We look forward to working with you and your
administration to ensure that the current momentum is not lost. I would really covet your support in that effort. We want to make sure that,
as we continue to push to implement these various initiatives; there is about, I believe there are 31 under the Border vision package and there
are about 29 initiatives under the Regulatory Cooperation package. We’re working very hard, certainly on the Canadian side to move forward
and actually implement.
This is some of the low hanging fruit we have in terms of trade facilitation. Now the Border vision and Regulatory Cooperation pieces are
initiatives that we can also leverage as our respective countries work shoulder to shoulder within the Trans-Pacific Partnership negotiations. Of
course, the Peterson Institute has recently released
a pair of studies on the TPP looking at the potential value and
impact in the context of other regional initiatives.
These studies provide valuable insight and, I am told, have been a great interest to our negotiators at
the negotiating table. I did receive a report back two nights ago about progress being made at TPP. The
negotiators have completed those talks that round in Singapore and apparently they did go well. There are still many, many issues outstanding.
We share the United States’ goal of completing these negotiations by the end of this year.
That is quite a daunting
task I must tell you because there is still so much to be done and when you are talking about going beyond a bilateral agreement to a regional
trade agreement with 11 partners perhaps 12 partners at the table. It is a real challenge trying to find consensus on all of the outstanding
issues.
Now one of the studies that the Peterson Institute conducted and prepared indicated that the TPP is clearly a significant trade deal in the
making and if done properly would lead to even bigger deals over time. Given Japan’s interest we can see how this agreement is starting to
morph into something much more than it started off being.
The TPP not only serves as a central pathway for economic integration in the Asia-Pacific, it is designed to be expanded to include others
beyond Japan. Indeed, it is hoped that the
Organization).
Once complete, the
TPP will act as a catalyst to reinvigorate the moribund Doha Round of the WTO (World
Trade
partnership will not only strengthen Canada’s efforts to broaden and deepen its trading relationships within the
Asia-Pacific region. It will also reaffirm and invigorate our traditional partnership in the Americas, including that with the
United States. We are very pleased to be working shoulder to shoulder with you in forging new economic
links with some of the fastest growing and most dynamic markets in the world. The high level of
integration of the Canadian and American Markets and our common North American production
platform demand a shared approach to preserving and building upon our North American supply
chains. Our automotive industry is a great example of Canada’s US supply chains in action.
Plan key to Mexican leadership
Mexico has bundles of economic potential – the aff avoids Mexican politics
Garza 13 - former U.S. Ambassador to Mexico, counsel in the Mexico City office of White & Case and
chairman of Vianovo Ventures (Antonio, “A More Ambitious Vision for Mexico,” World Politics Review,
2/20/13, http://www.worldpoliticsreview.com/articles/12730/a-more-ambitious-vision-for-mexico)//AC
Mexico’s economic resurgence is attracting widespread attention and optimism, with the Financial
Times recently dubbing the country the “Aztec Tiger.” The change in focus and tone is a welcome one,
and has allowed a more balanced and accurate portrayal of Mexico to emerge. Mexico’s prospects look
better now than they have in decades. President Enrique Peña Nieto has been in office just three
months, yet there is a sense of urgency attached to his ambitious agenda. Substantial challenges loom,
and surmounting them will require his administration’s full complement of skills: from political dealmaking and legislative maneuvering to strategic communications and diplomacy. There is some
trepidation on the domestic front given the scope of change and the sectors it will touch, but there is
also optimism. I see five reasons Mexico should be able to maintain its new momentum and transition
to a higher-profile global leadership role. An Open Economy. Mexico’s economy ranks among the
world’s most open and competitive. Trade makes up a bigger proportion of Mexico’s GDP -- 63 percent - than of any other large country’s, including the U.S. and China. Mexico’s annual exports of
manufactured goods are roughly equal to the value of all exports by the rest of Latin America put
together, according to the Economist. Mexico’s 12 free trade agreements already secure it preferential
access to 44 countries, more than any other country, and last year Mexico joined negotiations for the
proposed Trans-Pacific Partnership (TPP), the multilateral FTA that the U.S. considers central to its “Asia
Pivot.” Mexico views the TPP as an opportunity both to “update” NAFTA and to build a more strategic
approach to hemispheric trade relations. Shared Democratic Values. In contrast to other Latin American
countries, Mexico’s pursuit of trade alliances has been driven not by ideology but by a pragmatic focus
on economic policy and geopolitical interests. With NAFTA, Mexico became a pioneer of economic
integration and trade liberalization among emerging markets. The agreement provided an institutional
framework on which the country has built a global presence while developing closer connections with
the world’s largest and most dynamic economy. But NAFTA also facilitated meaningful change in
Mexican society. The country is now majority middle class, bolstered by the 17 percent of Mexicans that
joined the middle class from 2000 to 2010, according to the World Bank. This new middle class is
younger, more educated, wealthier and healthier. And its rise signifies not only the possibility of greater
economic development as its members continue making gains, but also a more stable democracy as
they seek to protect those gains and a more accountable one as their demand for transparency grows.
Today, as Europe and Asia look to build stronger ties with Latin America, Mexico is a priority because of
its core values and its strong record of promoting trade and investment along with growth and effective
institutions. Solid Economic Fundamentals. Few countries, particularly within Latin America, have an
economic record as impressive as Mexico’s: more than 17 years of macroeconomic stability, low
inflation and interest rates, manageable debt, record-high international reserves, economic openness
and increasing competitiveness. Though Mexico suffered the deepest recession in Latin America during
the global financial crisis -- its economy shrank by 6.6 percent in 2009 -- it has clawed its way back. GDP
growth has been in the 4 percent range for three years running, making the country a top performer
regionally. And Mexico has supplanted Brazil as the main focus for economic optimism in the region:
Over the first nine months of 2012, Mexico’s stock market received five times as much investment as
Brazil’s. Pragmatic Leadership. Recent global economic turmoil has made it clear that economic growth
requires leaders who understand and can implement the reforms required for growth. It is far too early
in the Peña Nieto administration to declare success, but the president and his team have been highly
effective thus far. The labor, accounting and education reform measures that were passed during the
transition were substantive accomplishments and signaled a break from years of inaction and gridlock.
The “Pacto por México,” announced within hours of the inauguration, saw the three main political
parties presenting a unified front for the first time in decades. Their pledge to work together to
construct a law-based society; promote economic growth, employment and competitiveness; improve
security and justice; enhance transparency; and further democratic governance is symbolically
important, but also demonstrates an administration rapidly taking charge, focused on results and
steering the country in a new direction. Expectations for congressional action are high, and Peña
Nieto’s PRI party has adept political operators at the helm in both houses. Fiscal and energy reform
are top priorities, as both are essential if the country is to accelerate growth and improve its
competitiveness. The mere fact that a PRI government is willing to tackle both underscores the
generational shift within the party and growing acceptance of the need for change in how the country
manages its economic affairs. A Favorable Convergence of Issues. The stiff headwinds that have
battered Mexico in recent years appear to be shifting. Positive developments include a recovering U.S.
economy; growing global demand for U.S. and Mexican manufactures; a likely reform of U.S.
immigration policies; the rising costs of doing business in China; and trans-Atlantic interest in deepening
trade and investment ties with Latin America, to name a few. Mexico’s new leadership meanwhile
appears committed to taking necessary steps to encourage growth, enact reforms and improve
competitiveness. It is an economic plan of action that is long overdue. But to fully realize the promise of
what Peña Nieto termed “Mexico’s moment” in his inaugural address, the administration must do more
than ensure progress on the economic front. It must also modernize institutions, strengthen its
commitment to good governance, assert the rule of law, support human rights, enforce accountability,
lead on the environment and promote greater inclusiveness. Mexico has set its sights high. By aiming
even higher, it just might find itself not only growing, but leading in Latin America and transitioning into
a real leadership role in the world.
Plan helps Nieto
Boosting the economy is key to Nieto’s agenda
Goforth 13 - teaches international political economy at Coastal Carolina University (Sean, “Mexico’s
Pena Nieto Faces Tough Choices on Trade,” World Politics Review, 2/27/13,
http://www.worldpoliticsreview.com/articles/12745/mexico-s-pena-nieto-faces-tough-choices-ontrade)//AC
Mexico relies more than most other countries on free trade agreements to fuel economic development.
In the 1990s, the North American Free Trade Agreement helped solidify Mexico’s return to democracy, and, given that
international trade accounts for more than 60 percent of Mexico’s economy, no Mexican president can
do without a clear strategy for fostering better access to foreign markets . But while President Enrique Pena
Nieto claims that the economy is the highest priority on his agenda, his administration has yet to spell out how Mexico
will trade with the world. Pena Nieto has inherited a plan to expand Mexico’s access to Asian markets via the
Trans-Pacific Partnership. Initially, the idea behind the TPP was to boost market access among a smattering of small economies in Asia and
Latin America whose domestic markets are too small to allow their manufacturers to compete against countries with larger domestic markets.
Beyond the technical projections for increased trade volume and job creation, however, Mexico hoped to
use the TPP bloc as a balancer in its trade with China, which remains outside the proposed agreement.
Granted, in recent years Mexico’s low wages and well-educated work force have drawn thousands of
manufacturing jobs from China. But bilateral trade remains heavily skewed in China’s favor. Of the
nearly $60 billion in trade between the two countries last year, 90 percent was Chinese exports to
Mexico. And Chinese attempts to accelerate this trend have raised concerns that Mexico will reap few
benefits from Chinese investment.
Trade key to US-Mexican relations
Strengthening Mexican ties through the TPP is key to broader coop on relations
Selee and Wilson 12 – *Vice President for Programs and Senior Advisor to the Mexico Institute,
**associate with the Mexico Institute (Andrew, Christopher, “A New Agenda with Mexico,” November
2012, Wilson Center,
http://www.wilsoncenter.org/sites/default/files/a_new_agenda_with_mexico.pdf)//SJF
A New Agenda with Mexico
Few countries will shape America’s future as much as Mexico. The two countries share a 2,000 mile
border, and Mexico is the second largest destination for U.S. exports and third source of oil for the U.S.
market. A quarter of all U.S. immigrants are from Mexico, and one in ten Americans are of Mexican
descent. Joint security challenges, including both terrorist threats and the violent operations of drug
cartels, have forced the two governments to work more closely than ever. What’s more, cooperation
has now extended to a range of other global issues, from climate change to economic stability.
Nonetheless, the landscape of U.S.-Mexico relations is changing. Illegal immigration is at the lowest level
in four decades, and organized crime violence, which has driven much of the recent cooperation, is
finally declining. Violence will remain a critical issue, but economic issues—bilateral and global—have
risen to the fore as both countries struggle to emerge from the global slowdown. Trade has increased
dramatically, connecting the manufacturing base of the two countries as never before, so that gains in
one country benefit the other.
To keep pace with these changes, U.S. policymakers will need to deepen the agenda with Mexico to give
greater emphasis to economic issues, including ways to spur job creation, and they will have
opportunities to strengthen cooperation on global issues. Security cooperation will remain critical, and
determined but nuanced followthrough to dismantle the operations of criminal groups on both sides of
the border will be needed to continue the drop in violence. With less illegal immigration, it will be easier
to address legal migration in new ways. However, economic issues are likely to dominate the bilateral
agenda for the
Summary
The depth of economic ties with Mexico, together with declines in illegal immigration and organized
crime violence in Mexico, Open up an opportunity for U.S. policymakers to deepen the economic
relationship with Mexico and to engage Mexico more on major global issues. Security cooperation,
especially strengthening institutions for rule of law and disrupting money laundering, will remain
important to the relationship, and there are clear opportunities to reform the U.S. legal immigration
system over the next few years, which would have important implications for the relationship with
Mexico. The strongest engagement, going forward, is likely to be on the economic issues that can help
create jobs for people on both sides of the border, and on the shared global challenges that both
countries face.
Mexico’s security crisis begins to recede, the two countries will also have to do far more to strengthen
the governments of Central America, which now face a rising tide of violence as organized crime groups
move southward. Mexico is also a U.S. ally in deterring terrorist threats and promoting robust
democracy in the Western Hemisphere, and there will be numerous opportunities to strengthen the
already active collaboration as growing economic opportunities reshape the region’s political and social
landscape.
Managing Legal Migration Flows
Since 2007, the number of Mexican migrants illegally entering the United States has dropped to
historically low levels, with a net outflow of unauthorized immigrants from the U.S. over the past three
years. The drop is partially because of the weak U.S. economy, but it also has to do with more effective
U.S. border enforcement and better economic opportunities in Mexico. This shift offers the potential for
both countries to explore new approaches to migration for the first time in a decade.
In the United States, policymakers have an opportunity to look specifically at how to reform the legal
immigration system. Almost all sides agree that the current immigration system, originally developed in
the 1960s, fails to address the realities of a twenty-first century economy. A renewed discussion on this
issue could focus on how to restructure the U.S. visa system to bring in the kinds of workers and
entrepreneurs the United States needs to compete globally in the future. This includes both high-skilled
and lowerskilled workers, who fill important gaps in the U.S. economy. Policymakers should consider
whether those already in the United States, who have set down roots and are contributing effectively to
the economy and their communities, might also be able to apply through a restructured visa system.
Mexican policymakers, on the other hand, have huge opportunities to consolidate Mexico’s burgeoning
middle class in those communities where out-migration has been a feature of life so as to make sure
that people no longer need to leave the country to get ahead. There are a number of ambitious efforts,
including some led by Mexican migrants that can serve as models for this. Mexican policymakers could
also facilitate U.S. reform efforts by indicating how they could help cooperate with a new U.S. visa
system if the U.S. Congress moves forward on a legal immigration reform.
Addressing Major Global Issues with Mexico
Over the past few years, the U.S. and Mexican governments have expanded beyond the bilateral agenda
to work closely together on global issues, from climate change to international trade and the economic
crisis. The U.S. government should continue to take advantage of the opportunities this creates for joint
problem-solving. Mexico’s active participation in the G-20, which it hosted in 2012, and in the U.N.
Framework on Climate Change, which it hosted in 2010, have helped spur this collaboration, and the
recent accession of Mexico into the Trans-Pacific Partnership negotiations provides one obvious avenue
to continue it. The two countries also coordinate more extensively than ever before on diplomatic
issues, ranging from the breakdown of democratic order in Honduras to Iran’s nuclear ambitions.
Mexico is likely to play an increasingly active role on global economic and environmental issues, areas
where the country has significant experience, and through cooperative efforts the U.S. can take
advantage of Mexico’s role as a bridge between the developed and developing worlds, and between
North America and Latin America.
The bilateral agenda will remain critically important —and the increasingly deep integration of the two
economies and societies means that efforts on trade, security, and migration will remain vital for the
future of both countries. In addition, the maturation of the bilateral relationship means that it may one
day resemble that between the United States and Canada, in which global issues can be as important as
the strictly bilateral issues.
A balanced and wide-ranging U.S.-Mexico agenda—one that seeks creative and collaborative
approaches on topics ranging from local gangs to global terrorist networks and from regional supply
chains to international finance—promises significant mutually beneficial results in the coming years.
•
Work together with Mexico and Canada to strengthen regional competitiveness and to grow
North American exports to the world. Economic issues can drive the next phase in deepening U.S.Mexico cooperation. Investments in trusted shipper programs, pre-inspection programs, and enhanced
border infrastructure will be crucial.
•
Deepen support for Mexico’s criminal justice institutions, and strengthen U.S. antimoney
laundering efforts in order to combat organized crime and violence.
•
Reform the legal immigration system to ensure U.S. labor needs are met for both high-skilled
and low-skilled workers, and incorporate those who are already contributing to the U.S. economy and
their communities.
•
Engage Mexico more actively on hemispheric and extra-hemispheric foreign policy issues,
ranging from terrorism to international trade and finance, as Mexico’s role as a global power grows.
Boosting trade will overcome stickier issues in relations
Wilson et. Al 13 – The Wilson Center, Mexico Institute (Christopher, “New Ideas for a New Era: Policy
Options for the Next Stage in U.S.-Mexico Relations,” The Wilson Center, January 2013,
http://www.wilsoncenter.org/sites/default/files/new_ideas_us_mexico_relations.pdf ) //JG
U.S.-Mexico trade is booming, growing faster than U.S. trade with China and faster than it did after
NAFTA took effect in the 1990s. In a way that cannot be said for drugs, violence, or illegal immigration,
focusing on the creation of jobs and improving the competitiveness of manufacturers on both sides of
the border is a good-news story. Greater focus on this dimension of the relationship could potentially
change the tone of the relationship in a way that makes the stickier issues of security and migration a
little less intractable . Progress on the economic agenda, including intraregional efforts to move goods
and services across the border more efficiently as well as cooperation on global trade issues like the
Trans-Pacific Partnership, could provide a significant boost to both the U.S. and Mexican economies.
Mexican participation kt TPP
Mexican participation increases the chance of TPP success
Lugar 12 – US Senator (Richard, “In strong Support of Mexico Joining the Trans-Pacific Partnership
(TPP),” 6/14/12, http://votesmart.org/public-statement/706990/in-strong-support-of-mexico-joiningthe-trans-pacific-partnership-tpp#.Ue7lEUFQGCk)//SJF
Mexico has expressed its keen interest in joining the Trans-Pacific Partnership (TPP), and the Obama
Administration (U.S.) should promptly endorse its intention to join TPP negotiations. With over $1 billion
of trade per day, Mexico is the U.S.'s third largest trading partner in the world. For the U.S., Mexico
represents a reliable ally and strategic global partner. Mexico's participation in TPP negotiations would
benefit both U.S. producers and consumers. With a large and expanding market, Mexico is the second
largest destination for U.S. exports. Mexico buys more U.S. products and services than all of the BRIC
(Brazil, Russia, India, and China) nations combined. It even buys more U.S. exports than the United
Kingdom, Germany, France and the Netherlands together, more than China and Japan together, and
more than all of Latin America and the Caribbean combined.
Our trade with Mexico produces jobs in the U.S. The U.S. Chamber of Commerce has estimated that
trade with Mexico directly supports almost six million American jobs. Mexico is a major partner in our
production and supply chains, which are tightly integrated. For each dollar of products that the U.S. buys
from Mexico, there are 40 cents of U.S. inputs. Additionally, there is a 37 percent value added in
Mexico's global exports, and for every dollar that Mexico earns from exports, 50 cents are spent on U.S.
goods. An increase of Mexican exports through TPP would represent an increase of U.S. exports -- a
boon for job creation in the U.S.
Mexico's participation in TPP would benefit U.S. business. The U.S. is the main source of foreign direct
investment (FDI) to Mexico, and an expanded market in the Asia-Pacific region would usher in new
opportunities and higher returns for U.S. corporations operating in Mexico. Mexico's vast network of
free trade agreements already includes free trade agreements with three TPP participants (the United
States, Chile, and Peru) and with two other candidates (Canada and Japan). By working together through
the TPP, the competitiveness of North America would be significantly enhanced, and exports to Asia of
regionally produced goods would boost the prosperity of our nation and strengthen U.S. influence in the
Americas into the future.
Through the North American Free Trade Agreement (NAFTA), the U.S. and Mexican economies have
become deeply connected. As a member of this treaty, Mexico has demonstrated a commitment to
maintaining an open economy to promote growth and prosperity. Welcoming Mexico into TPP
negotiations would provide an expedient and effective avenue to upgrade NAFTA. Taking the necessary
steps to move towards an enhanced NAFTA promotes job creation in the U.S. and enhances commercial
and economic competitiveness for North America as a whole.
Including Mexico in TPP is good diplomacy and good business. It would bring the largest Latin American
economy in the Pacific region, and our close strategic partner, together with like-minded nations in the
construction of a modern, free and fair, rules-based trade regime.
Mexico is our neighbor, but it is also an open society with which we share history, culture, and the
values of freedom and democracy. Mexico's participation in TPP would further strengthen our existing
bonds, as well as the economies of the U.S. and its TPP partners. It is in the U.S. interest that Mexico join
the TPP.
AT: NAFTA trade barriers
TPP inclusion lays the political groundwork to renegotiate NAFTA
Barfield 12 - former consultant to the office of the U.S. Trade Representative and a resident scholar at
the American Enterprise Institute (Claude, “Let's Bring Canada and Mexico Into the Pacific Trade Pact,”
Real Clear Markets, June 13, 2012,
http://www.realclearmarkets.com/articles/2012/06/13/lets_bring_canada_and_mexico_into_the_pacifi
c_trade_pact_99716.html)//AC
It is time for the United States to stop dragging its heels and allow Canada and Mexico to enter the
negotiations for a Trans-Pacific Partnership Trade Agreement (TPP). Both nations have now signaled that they want to join before the
end of 2012 and are actively lobbying TPP national capitals. While it is true that decisions to bring in new partners to the
negotiations require a consensus among all of the nine current members - and that New Zealand and Australia have
important parochial reservations about Canadian participation - a positive signal by the Obama administration would
certainly seal the deal. The TPP, if the negotiations are successful, will become the single most
important regional trade agreement in the world trading system. Though it consists of only nine nations at this point,
the goal is to provide stepping stones to the conclusion of a regionwide Free Trade of the Asia-Pacific
Agreement (FTAAP) over the next decade. For the United States, there are strong economic, political and
strategic reasons to support both Canada and Mexico. On the economic front, Canada and Mexico are already the first
and third most important U.S. trade partners (China is number two), and the top two export markets for
American goods. Individually, U.S. exports to these two markets are almost three times greater than all of the current TPP members
combined. As another comparison, both Canada and Mexico also consume more U.S. goods than China and Japan combined. Similarly, the two
nations rank as the second and third largest sources of U.S. imports (China, number one).Behind
these statistics is the larger
reality that as a result of the North American Free Trade Agreement (NAFTA), the three countries are
combined in a truly North American single market. Burgeoning investment flows over the two decades since the passage of
NAFTA have spawned vital supply chains as parts and components pass back and forth across national boundaries will little impediment. This is
particularly true in the key automobile, electronics, chemical, and textiles and apparel sectors. As Mexican officials have pointed out, as a result
of joint production, U.S. value added in Mexico's global exports is 37 percent. Within the global trading system, both Canada and Mexico
have demonstrated the will and ability to forge liberalizing trade agreements with both developed and
developing countries. Canada has ratified nine agreements since 2006, and currently is actively pursuing pacts with the EU and Japan.
After NAFTA, in order to diversify and expand market opportunities, Mexico became a champion
bilateral and regional negotiator, and now has established a network of 12 FTAs with more than 40
countries. For its part, the U.S. has negotiated FTAs with 18 nations (exclusive of the ongoing TPP negotiations). The above statistics for the
U.S., Canada, and Mexico highlight one overwhelmingly important fact: the 18-year old NAFTA agreement is badly in need
of updating, and the TPP negotiations that aim for a much proclaimed "21st Century" agreement are
the obvious vehicle to craft new rules to meet the novel challenges of the evolving trading system . At
the same time, the political reality is that NAFTA has always been, and remains, a highly controversial pact - remember
candidate Obama's vow to trash NAFTA provisions and start over. President Obama, to his credit, has moved beyond such demagoguery, but
even today an effort to revise NAFTA standing alone risks a political firestorm, certainly in the U.S. but also possibly in Mexico and Canada.
Achieving a 21st Century NAFTA update through the TPP process, however, is likely to reduce such political
risks. In this instance, the U.S., Mexico and Canada would be part of a regionwide negotiation that thus far has
produced no political or social turmoil-and in the United States has attained substantial bipartisan
political support. Moving beyond the economic and trade rationales, there are also larger political and strategic imperatives. Both
countries are mature and robust democracies, and it is hard to defend putting off their bids for
membership when authoritarian states such as Viet Nam and Brunei have been welcomed to the
negotiating table. Further, after 9/11 Canada became a key NATO ally in the war against Al-Khaeda in Afghanistan, and both Canada and
Mexico are central allies in the war against terrorism, transnational criminal organizations, and drug trafficking. It should be noted that
Mexico, despite increasing gang-induced violence spurred on by the insatiable U.S. appetite for illegal drugs, still has achieved a
commendable economic record even in the face of the worldwide financial crisis: 5.4 percent in 2010
and nearly 4 percent in 2011 There are two important obstacles to near term TPP membership for Canada and Mexico: one relates to
the pace and timing of the negotiations and the second to national protection in each country. With regard to the first, there is widespread fear
that bringing in new TPP negotiating partners will slow down the process and force renegotiation of already settled issues. This is a valid
concern, but the reality is that the goal to complete negotiations by end of 2012 is now considered unattainable (though the negotiators in
order to maintain pressure cannot admit this). The U.S. presidential elections - and the difficulty of sorting through the challenges - means that
resolution of the most difficult substantive questions - new rules on intellectual property, market access, rules of origin, investor-state dispute
settlement, as examples - have been put off. It will almost certainly be well into 2013 before difficult compromises in these areas can be
crafted. Under these circumstances - where there are no texts yet written and disagreements still exist among current partners - Canada and
Mexico should become part of the process. They should not, however, be given a free pass. Particularly in regard to Canada, the top political
leaders must give a signal that the most important barriers - the protectionist supply management system for dairy and poultry products - will
be on the table and open to change. Further, Mexico must live up to its promise to review services regulations, as well as continue to revise
intellectual property laws. But beyond a certain point neither country should be forced to "pre-negotiate" final terms. Just as the United States,
New Zealand, Australia and the other current TPP members negotiate on the basis of offsetting deals (the much decried but necessary
mercantilist tradeoff of "conceding" the lowering of barrier in return for an equivalent lowering by trading partners), Canada and Mexico
should be allowed into the tent to makes their own deals on the basis of their perceived national
interest. The bottom line is that the Obama administration, following current precedents, should be prepared to notify Congress by
September that Canada and Mexico will join the TPP negotiations - leading to a formal entrance under congressional rules by December 2012.
In sensibly pursuing larger economic gains through new Pacific partnerships, the United States should
not jeopardize long-standing economic and strategic alliances with our nearest neighbors.
AT: IPR disputes block
The Aff jumpstarts regional cooperation on broader issues like IPR
Wilson 12 – Associate at the Mexico Institute of the Woodrow Wilson International Center for
Scholars (Christopher, “U.S. Competitiveness: The Mexican Connection,” Issues in Science and
Technology, www.issues.org/28.4/p_wilson.html)//SJF
A “giant sucking sound” was the memorable description made by presidential candidate Ross Perot
during the 1992 campaign of the impact that the North American Free Trade Agreement (NAFTA) would
have, as businesses and jobs moved from the United States to Mexico. The reity is that economic
cooperation with Mexico has been a boon for U.S. industry and has strengthened the country’s
competitive position in ways that have produced broad economic benefits. Today, as China and other
Asian countries have emerged as major economic challengers, expanding economic cooperation with
Mexico is one of the best ways for the United States to improve its global competitiveness.
Regional integration between the United States and Mexico is already vast and deep. As the United
States’ second largest export market and third largest trading partner, Mexico is clearly important to the
U.S. economy. Merchandise ade has more than quintupled since NAFTA went into effect in 1994, and in
2011, bilateral goods and services trade reached approximately a half-trillion dollars for the first time.
The U.S. Chamber of Commerce has calculated that the jobs of six million American workers depend on
U.S.-Mexico trade. Many of those jobs are in border states, which have especially close ties to Mexico,
but Mexico is also the top buyer of exports from states as far away as New Hampshire (mostly
computers and electronics). In fact, 20 states, from Michigan to Florida, sell more than a billion dollars’
worth of goods to Mexico each year, and Mexico is the first or second most important export market for
21 states.
The United States and Mexico are also major investors in one another. In fact, combined foreign direct
investment holdings now total more than $100 billion. According to the most recent count by the
Department of Commerce, U.S.-owned companies operating in Mexico created $25 billion in value
added and employed nearly a million workers. Mexican investment in the United States is less than U.S.
investment in Mexico, but it is has been growing rapidly in recent years. Several of Mexico’s top
companies, which are increasingly global operations, have made significant investments in the United
States. Mexico’s Cemex, for example, is North America’s largest maker of cement and concrete
products. Grupo Bimbo, which owns well-known brands such as Entenmanns’s, Thomas’s English
Muffins, and Sara Lee, is the largest baked goods company in the Americas. Even Saks Fifth Avenue and
the New York Times Company are supported by significant Mexican investment.
The massive volume of commerce and investment is important, but the depth of regional integration is
the primary reason why Mexico contributes to U.S. competitiveness. Mexico and the United States do
not just trade products, they build them together. In fact, to understand regional trade, it is necessary to
view imports and exports in a different light. Whereas imports from most of the world are what they
appear to be—foreign products—the same cannot be said of imports from Mexico. During production,
materials and parts often cross the southwest border numerous times while U.S. and Mexican factories
each perform the parts of the manufacturing process they can do most competitively. Because of the
complementary nature of the two economies, close geographic proximity, and NAFTA, which eliminated
most tariff barriers to regional trade, the U.S. and Mexican manufacturing sectors are deeply integrated.
Demonstrating this integration is the fact that 40% of the value of U.S. imports from Mexico comes from
materials and parts produced in the United States. This means that 40 cents of every dollar the United
States spends on Mexican goods actually supports U.S. firms. The only other major trading partner that
comes close to this amount is Canada, the United States’ other NAFTA partner, with 25% U.S. content.
Chinese imports, on the other hand, have an average of only 4% U.S. content, meaning that the
purchase of imports from China does not have the same positive impact on U.S. manufacturers.
The regional auto industry is a good example of this production-sharing phenomenon. The United
States, Mexico, and Canada each produce and assemble auto parts, sending them back and forth as they
work together to build cars and trucks. Cars built in North America are said to have their parts cross the
United States borders eight times as they are being produced, and between 80 and 90% of the U.S. auto
industry trade with its North American partners is intra-industry, both of which signal an extremely high
level of vertical specialization. As a result, Detroit exports more goods to Mexico than any other U.S.
city, and the North American auto industry has proven much more resilient than many expected.
Although several of North America’s largest automakers nearly collapsed during the financial crisis in
2008 and 2009, a robust recovery is now under way. Mexico and the United States have each
experienced the sharpest rise in vehicle production of the world’s top 10 auto producers during the past
two years, growing 51 and 72%, respectively, between 2009 and 2011.
From competitors to partners
The United States and Mexico once worked relatively independently to manufacture goods and export
them, but now they work together to produce goods that are sold on the global market. With their
economies so intimately linked, the United States and Mexico now experience the cycle of growth and
recession together. If they ever were economic competitors, it is clear that they have now become
partners that will largely sink or swim together. Because they are in the same boat, the United States
and Mexico should develop a joint strategy to increase regional competitiveness vis-à-vis the rest of the
world.
The groundwork is already laid, and several recent trends are in North America’s favor. To begin with,
Mexico and the United States are among the most open economies in the world. Through their
extensive networks of free trade agreements, the two countries have tariff-free access to more than 50
countries, including the large economies of the European Union and Japan. This presents a tremendous
opportunity for jointly produced goods to be exported around the world, something that could create
jobs and improve the trade balance of the United States. The key, of course, is getting costs sufficiently
low and productivity sufficiently high that North American goods are competitive with their European
and Asian competitors.
Labor costs in China are rising while oil prices are increasing transportation costs, and new advanced
manufacturing techniques are making labor an ever-smaller portion of the total cost of making a
product. These factors have led to what the Economist recently called the boomerang effect: Some
companies that chased cheap wages in China in the previous two decades have reconsidered their
decision to move production offshore. Some are now more interested in either increasing production in
Mexico or moving it back to the United States.
What is amazing is that North America is recovering its competitiveness without much of a strategy.
Imagine how much more could be done if policymakers fully understood and took advantage of this
opportunity. Instead of simply enjoying the moderate recovery of the manufacturing sector, the United
States, Mexico and Canada should work as partners to develop policies that could lead to a real
resurgence of the region.
Without a doubt, each country must address a number of domestic challenges. Many, such as education
and fiscal reform, are needed in Mexico and the United States. Mexico also needs to strengthen the rule
of law, increase competition, and improve productivity in the energy sector, and the United States
needs to revamp its immigration system so that it can continue to attract the most motivated and
talented individuals to contribute to its economy. The regional policy options outlined below go hand in
hand with these domestic efforts, and together they have the power to truly revitalize the regional
economy.
Policy for a competitive region
The border. With an integrated regional manufacturing sector, the same goods cross the U.S.-Mexico
border several times as they are being produced. Consequently, the effects of any barriers to trade,
tariff or nontariff, are multiplied by the number of border crossings that take place during production. In
the NAFTA region, tariffs are not a significant trade barrier, but the importance of having efficient
border management and customs procedures is difficult to overstate.
After NAFTA took effect and trade barriers fell, bilateral trade skyrocketed, more than tripling by 2000.
But after the terrorist attacks of 9/11, a new approach to homeland security led to a “thickening” of the
border. Trade and passenger travel ground to a near halt. Although trade has been moving since then,
the new security concerns have meant that there was never a return to the status quo. Between 2000
and 2010, legal entries of commercial trucks into the United States at the southern border dropped by
41%. Since then, several studies have attempted to estimate the cost of increased border wait times on
the regional economy, particularly of border communities. The results are varied, but there is
widespread agreement that border-related congestion has had a multibillion-dollar effect on the U.S.
and Mexican economies.
Seeking to mitigate these costs, the U.S. and Mexican governments developed the 21st Century Border
initiative, which is based largely on the idea that neither security nor efficiency has to be sacrificed to
improve the other. By expediting the flow of safe and legal border crossers and cargo, officials can focus
more of their attention on seeking dangerous people and goods. This is the concept behind the trusted
traveler (SENTRI) and trusted shipper (FAST and C-TPAT) programs in place at the Mexican border.
Frequent border crossers prove they are low risk by undergoing an extensive background check and
interview process. In return, they get to use special lanes to quickly cross the border.
There is no silver bullet in border management, but these programs are the closest thing. They make the
border safer while lessening the need for building more vehicle lanes at entry ports and increasing the
number of border staff. They should be expanded and vigorously promoted. Where they are in place,
the United States should work with Mexican officials to ensure that use of the dedicated express lanes
significantly reduces waiting times, so that there is an incentive to join the programs.
Moderate infrastructure investments are also needed, because although trade has quintupled, relatively
few entry ports have seen any major upgrades or expansions. Public/private partnerships are an
important mechanism to bring needed funding to the border area, and the Department of Homeland
Security should work with Congress to create secure and appropriate mechanisms to encourage their
use, if it determines that the current legal environment excessively limits such use. Such partnerships
have been successful in some areas, but many border communities and businesses would be willing to
commit more resources to facilitate travel and commerce.
Transportation networks. Given the importance of U.S.-Mexico trade, the development of regional
transportation networks to facilitate trade is too important to leave to chance and ad hoc processes.
Local, state, and federal representatives should and do have a voice in the process of guiding the
development of border infrastructure and the highway and rail lines that link the interior states of
Mexico and the United States. What is lacking is a coherent and robust master planning process to
ensure that strategic rather than political interests are the guiding force behind border and
transportation infrastructure investments.
In 2006, California and Baja California took the initiative to begin developing a regional master plan, an
awardwinning project that many believe could be successfully replicated. Other regions of the U.S.Mexico border have similar plans in various stages of development, but a true master plan spanning the
entire border would best facilitate the competitiveness of the United States and Mexico.
Customs. In addition to the cost of long and unpredictable border wait times, importers and exporters
must meet significant documentation requirements, especially in order to take advantage of the tariff
preferences granted by NAFTA. The agreement’s rules of origin, for example, stipulate that only
products from the United States, Canada, or Mexico should get preferential treatment. This means that
firms must maintain records proving that their products, and sometimes the parts contained within
them, were made or sufficiently altered within the NAFTA area. This paperwork burden can at times be
substantial, especially for small- and medium-sized businesses.
In theory, the way to solve this issue is to create a customs union (like that of the European Union) with
a set of common external tariffs for all nonmember countries. With a common tariff, the movement of
goods within the region would be subject only to security checks, because customs requirements would
all be addressed as goods enter or exit the perimeter of the customs union. In practice, this would be
very difficult to achieve in North America, given the number of trade agreements each country is party
to and the various industries each has sought to protect while negotiating those agreements.
As has been suggested by former U.S. Trade Representative Carla Hills, a more appropriate approach
may be to take things product by product. For goods that already face similar external tariffs in each of
the NAFTA countries, negotiations could be started to have tariffs lowered to the lowest of the three.
When a common external tariff is reached for a product, it could then be exempted from most customs
requirements at the United States’ southern and northern borders.
A regional partnership for global trade issues. In order to develop a North American export platform, the
NAFTA countries should begin to see themselves as an economic alliance. The countries of North
America should, whenever possible, engage the global community as partners on trade issues. It may
often make sense for the United States, Canada, and Mexico to jointly approach third countries to
resolve trade disputes, given the integrated nature of regional manufacturing.
Each of the three North American countries has made a strategic decision to strengthen its engagement
with Asia. Given the dynamism of so many Asian economies, this is entirely appropriate. A strategic
question, though, is whether they should each make this pivot individually or do so as a bloc. The United
States is currently engaged in trade negotiations with a number of Pacific Rim countries to form the
Trans-Pacific Partnership. Both Mexico and Canada have signaled their desire to join the negotiations,
and finding a way to bring them in is the right strategic move for the United States. The Trans-Pacific
Partnership has the potential to actually deepen North American integration, strengthening rules on
topics such as intellectual property rights. With full regional participation, it would also open new
markets for jointly produced goods
US leadership key to TPP
US lead role is key
Lewis 11 - Meredith Kolsky Lewis received her BA from Northwestern University and her J.D.
and MSFS degrees from Georgetown University. Prior to entering academia she praacticed
international trade and litigation in the Washington, DC and Tokyo offices of Shearman &
Sterling LLP. Lewis’s research focuses on international economic law, with a particular
emphasis on international trade law and the World Trade Organization. She teaches public and
private international law subjects, including International Trade Law and International
Business Transactions. She is also Director of the Canada-United States Legal Studies Centre,
(“The Trans-Pacific Partnership: New Paradigm or
Wolf in Sheep’s Clothing?”, 1-1-2011,
http://lawdigitalcommons.bc.edu/cgi/viewcontent.cgi?article=1264&context=iclr)//sawyer
An expanded TPP could lead to a different path toward Asian economic integration, which
would have neither ASEAN nor the three anoints or an East Asian FTA. In particular, an
expanded TPP ou inserting itself into what is likely to be the more powerful f tw Depending on
how the expansion is structured, the TPP additionally has the potential to
multilateralize some aspects of regionalism,66 m r East Asian economies as its driver,
and which would instead have the United States as a central participant.64 If the
expanded TPP becomes the basis for a Free Trade Area of the Asia Pacific (FTAAP),
Asian integration will likely develop along lines more similar to those envisioned (even if
primarily in an aspirational sense) by the members of the Asia Pacific Economic Cooperation
(APEC) than those being contemplated in the context of ASEAN-plus arrangeme w ld lead to a
trans-Pacific integration rather than an intra-Asian integration. The United States’ decision
to negotiate to join the TPP is therefore quite savvy. By joining the TPP, the United States
has the potential not only to thwart efforts to shape Asian economic regionalism models that
exclude it, but, if the TPP expansion is successful and continues, the United States will also
be a leader and agenda-setter with respect to the parameters of a future FTAAP. Further, if
the TPP grows into an FTAAP, the global economic order would also be altered. At present
there are three major economic blocs—the Americas, Europe, and Asia—and the American bloc
is not necessarily the most economically powerful among these.65 An Asia-Pacific integration
has the potential to alter the balance into a two-bloc model comprising Europe and the AsiaPacific, with the latter including Asia, the United States, Oceania, and much of South America.
Therefore, joining the TPP could help the United States play an active role in altering
the regional power balance, thereby o o large blocs as opposed to remaining on the wrong
side of a divided Pacific.
USTR does the plan
The Office of the United State Trade Representative should push for TPP and take a
leadership role
Lewis 11 - Meredith Kolsky Lewis received her BA from Northwestern University and her J.D.
and MSFS degrees from Georgetown University. Prior to entering academia she praacticed
international trade and litigation in the Washington, DC and Tokyo offices of Shearman &
Sterling LLP. Lewis’s research focuses on international economic law, with a particular
emphasis on international trade law and the World Trade Organization. She teaches public and
private international law subjects, including International Trade Law and International
Business Transactions. She is also Director of the Canada-United States Legal Studies Centre,
(“The Trans-Pacific Partnership: New Paradigm or
Wolf in Sheep’s Clothing?”, 1-1-2011,
http://lawdigitalcommons.bc.edu/cgi/viewcontent.cgi?article=1264&context=iclr)//sawyer
The Office of the United States Trade Representative (USTR) is currently negotiating with
seven other countries to form a new trade agreement called the Trans-Pacific Partnership
(TPP). The TPP has the potential to expand into a Free Trade Agreement of the Asia-Pacific
(FTAAP). At present there are several competing models for Asia-Pacific economic
integration that exclude the United States entirely. In such an environment, the TPP
presents the United States with a welcome opportunity, not only to participate, but also to take
a leadership role in establishing the terms for a region-wide agreement.
Nevertheless, the USTR must make the TPP sufficiently attractive to other Asia-Pacific
economies, such that those countries will prefer the TPP over other integration models. This
will require the USTR to partially diverge from its standard FTA template and liberalize in new
areas. Although doing so may be politically challenging, it is the United States’ best
strategy if it wishes to solidify a role for itself in an economically integrated AsiaPacific.
The USTR will push the plan – then Obama will pass it with Fast Track Authority
Stoller 12 – Matt Stoller has a background in financial journalist and was a Roosevelt fellow
(“Trans-Pacific Partnership: The biggest trade deal you’ve never heard of”, October 23, 2012
http://www.salon.com/2012/10/23/everything_you_wanted_to_know_about_the_trans_paci
fic_partnership/)//sawyer
The TPP is being negotiated by an agency called the Office of the United States
Trade Representative. As with other such agreements, Congress must vote to approve
it, most likely under a “Fast Track” provision that prohibits any amendments and
limits debate. Trade, though constitutionally a congressional prerogative, is now
firmly in the hands of the executive branch. And “trade” negotiations have become a
venue for rewriting wide swaths of domestic non-trade policy traditionally determined by
Congress and state legislatures. The current USTR is a former Dallas mayor and former
corporate lobbyist named Ron Kirk. Michael Froman, a deputy assistant to the president and
deputy national security advisor for international affairs, is also heavily involved. Froman is a
disciple of former Treasury Secretary Robert Rubin who followed him to Citigroup, and headed
the Obama transition team in 2008. According to journalist Matt Taibbi, Froman apparently led
the hiring of Tim Geithner for the Treasury secretary role. The philosophy behind these
international agreements thus follow the model laid down during the Clinton administration.
Economy advantage
Exports solve debt
US debt and trade deficits are inseparable – threatens economic instability
Sahu 98 – Ph.D. in economics, Economics Department Chairperson at Oakland University (Anandi,
“Balance of Trade,” Reference for Business, no date but referencing studies from 1998,
http://www.referenceforbusiness.com/encyclopedia/Assem-Braz/Balance-of-Trade.html ) //JG
For most of the 1980s, the U.S. economy faced both federal budget deficits and foreign trade deficits,
often called the twin deficits. This was, however, no mere coincidence. As explained above, higher
interest rates had pushed up the foreign exchange rate and the foreign trade deficit increased
dramatically. Higher interest rates in the United States were, in turn, at least partly, caused by the U.S.
budget deficit. An existence of a budget deficit implies that the government is spending more than it is
receiving in tax revenue. As a result, the government has to borrow to meet the shortfall in tax revenue.
Such government borrowing adds to the demand for credit in the debt (financial) market, which, in turn,
raises the cost of borrowing, the interest rate. This phenomenon is often called the international
crowding out. U.S. budget deficits were in large part financed by investors from abroad (lured by higher
interest rates in the United States relative to interest rates in their home countries). Thus, the
simultaneous existence of budget and trade deficits appeared convenient and painless for the U.S.
economy—the overspending on foreign goods and services (the negative net exports) were largely
financed by borrowing from abroad. This seemingly odd arrangement works as follows. The United
States needs to pay for importing more than exporting (equal to the value of net exports). When foreign
nationals invest in the United States by buying U.S. Treasury bonds, they lend funds to the U.S.
government to finance the federal budget deficits. This inflow of funds from foreign nationals to buy the
Treasury bonds (called the inflow of capital and deemed to be a part of the capital account), however,
offsets the outflow of funds from the United States that would have been necessary to pay for the
excess of imports over exports (often referred to as activities on the current account). The need for the
payment by the United States on account of the current account is avoided due to the offsetting
transaction on the capital account. Nevertheless, the net result of the twin deficits was that the U.S.
dependence on foreign funds grew, and so did the U.S. foreign debt. In fact, the United States turned
into a debtor nation for the first time during the Reagan administration—that is, the United States owed
more to other countries than other nations owed to the United States. Foreign debt is not simply a
matter of national prestige. It has certain economic implications. Sudden withdrawal of funds from the
United States, by foreign nationals (for example, due to a lack of confidence in U.S. currency), can
destabilize the U.S. and world financial markets. During the late 1990s, while the United States has
continued to experience a trade deficit of over $100 billion a year, the fiscal budget has started to have a
surplus. The interest rates are low as well. Thus, interest rates can no longer be held as being primarily
responsible for the trade deficit. It is now the growing U.S. economy and mediocre foreign economies
that are the main culprits. Factors determining the balance of trade are explained as follows.
AT: Debt inevitable
Even if debt is inevitable, having high exports makes debt manageable
Bagus 12 - associate professor at Universidad Rey Juan Carlos (Phillipp, “The Danger of External
Debts,” Ludwig von Mises Institute, June 5 2012, http://mises.org/daily/6059/ ) //JG
In regard to the stability of a currency or the sustainability of government debts, the balance of trade
(the difference between exports and imports of goods and services) is also important. An export surplus
(abstracting from factor income and transfer payments) implies that a country accumulates foreign
assets. As foreign assets are accumulated, the currency tends to be stronger. Foreign assets can be used
in times of crisis to pay for damages. Japan again is a case in point. After the earthquake in March 2011,
foreign assets were repatriated into Japan, paying for necessary imports. Japanese citizens sold their
dollars and euros to repair damage at home. There was no need to ask for loans denominated in foreign
currencies, thereby putting pressure on the yen. Japan's export surpluses manifest themselves also on
the balance sheet of the Bank of Japan. The Bank of Japan has bought foreign currencies from Japanese
exporters. These reserves could be used in a crisis situation to reduce public debts or defend the value
of the currency on foreign exchange markets. In fact, the net level of Japan's public debts falls 20
percent taking into account the foreign exchange reserve holdings of the Bank of Japan (over $1 trillion).
Thus, export surpluses tend to strengthen a currency and the sustainability of public debts. On the
contrary, import surpluses (abstracting from factor income or transfers) result in net foreign debts.
More goods are imported than exported. The difference is paid for by new debts. These debts are often
held in the form of government bonds. A country with years of import deficits is likely to be exposed to
large holdings of external public debts that may pose problems for the government in the future as we
have discussed above. The balance of trade may also be an indicator for the competitiveness of an
economy, and, indirectly, for the quality of a currency. The more competitive an economy, the more
likely the government can support its fiat currency by expropriating the real wealth created by this
competitive economy and will not get into public-debt problems . Further, the more competitive the
economy, the less likely that public-debt problems are solved by the production of money. While an
export surplus is a sign of competitiveness, an import surplus may be a sign of a lack thereof. Indeed,
long-lasting import deficits may be the sign of a lack of competitiveness, and often go hand in hand with
high public debts, exacerbating the lack of competitiveness. Economies with high and inflexible wages —
as in southern Europe — may be uncompetitive, running a trade deficit. The uncompetitiveness is
maintained and made possible by high government spending. Southern eurozone governments hired
people into huge public sectors, arranged generous and early retirement schemes, and offered
unemployment subsidies, thereby alleviating the consequence of the unemployment caused by
inflexible labor markets. The result of the government spending was therefore not only a lack of
competitiveness and a trade deficit but also a government deficit. Therefore, large trade and
government deficits often go hand in hand. In the European periphery, imports were paid with loans.
The import surplus cannot go on forever, as public debts would rise forever. A situation of persisting
import surpluses such as in Greece can be interpreted as a lack of political will to reform labor markets
and to regain competitiveness. Therefore, persisting import surpluses may cause a currency or publicdebt sell-off. In this sense, the German export surplus supports the value of the euro, while the
periphery's import surplus dilutes its value. In sum, high public (external) debts and persisting import
surpluses are signs of a weak currency. The government may well have to default or to print its way out
of its problems. Low public (external) debts and persisting export surpluses, in contrast, strengthen a
currency.
Debt kills hege
Debt causes heg collapse – empirics prove
Khalizad 11 – former United States ambassador to Afghanistan, Iraq, and the United Nations (Zalmay,
“The Economy and National Security,” National Review, Feb 8 2011,
http://www.nationalreview.com/articles/259024/economy-and-national-security-zalmay-khalilzad )
//JG
Without faster economic growth and actions to reduce deficits, publicly held national debt is projected
to reach dangerous proportions. If interest rates were to rise significantly, annual interest payments —
which already are larger than the defense budget — would crowd out other spending or require
substantial tax increases that would undercut economic growth. Even worse, if unanticipated events
trigger what economists call a “sudden stop” in credit markets for U.S. debt, the United States would be
unable to roll over its outstanding obligations, precipitating a sovereign-debt crisis that would almost
certainly compel a radical retrenchment of the United States internationally. Such scenarios would
reshape the international order . It was the economic devastation of Britain and France during World
War II, as well as the rise of other powers, that led both countries to relinquish their empires. In the late
1960s, British leaders concluded that they lacked the economic capacity to maintain a presence “east of
Suez.” Soviet economic weakness, which crystallized under Gorbachev, contributed to their decisions to
withdraw from Afghanistan, abandon Communist regimes in Eastern Europe, and allow the Soviet Union
to fragment. If the U.S. debt problem goes critical, the United States would be compelled to retrench,
reducing its military spending and shedding international commitments.
Threatens national security
Byrnes 13 - Concerned Veterans for America field representative (John, “Reducing the Debt Should Be
the True National Security Priority,” TIME, July 11 2013, http://nation.time.com/2013/07/11/reducingthe-debt-should-be-the-true-national-security-priority/ ) //JG
Is President Obama concerned by the runaway spending that has taken place under his watch?
Sometimes he pays lip service to the notion. For example, here’s the President in the 2010 National
Security Strategy of the United States: Our strategy starts by recognizing that our strength and influence
abroad begins with steps we take at home. We must grow our economy and reduce our deficit. Back
then the President recognized that deficit reduction is critically linked to military preparedness and
national security. But you wouldn’t it know now by his Administration’s actions. From 2009 until today,
the President has lurched from crisis to crisis, with little regard for spending control. He, with
congressional assent, has enlarged the deficit and the debt at every step. To be fair, the President had
plenty of company in mismanaging our fiscal affairs. Republicans in the House of Representatives talk a
good game on spending, but when their backs are against the wall, they too often choose to punt,
postponing real reform until later. Congressional Democrats have been even more irresponsible, if that’s
possible. They’ve deferred budgets for years on end and, relying instead on short-term continuing
resolutions to keep the wheels of government turning. Perhaps that’s why in a June CNN poll, 83% of
Americans said they disapprove of the job Congress is doing. The fact is that this fiscal dereliction is
undermining our economic and military strength. Continued deficit spending has swelled our national
debt to nearly $17 trillion. Servicing that debt (the equivalent of monthly minimum payments on your
credit cards) is costing us roughly $250 billion a year, an amount that will only rise as deficit spending
continues and interest rates climb. These numbers are a drag on future economic growth. That’s a recipe
for disaster, as Admiral Mike Mullen warned when he was chairman of the Joint Chiefs of Staff: “The
most significant threat to our national security,” he said in 2010, “is our debt.” That challenge cannot be
met with vague promises to further “tax the rich.” Nor will defense-budget cuts alone suffice. While the
defense budget can certainly stand some reductions as the wars in Iraq and Afghanistan wind down, it is
a simple fact that there’s not much more to cut from the military, without compromising force
readiness. America, instead, requires a responsible, balanced approach to budget control that
encompasses spending reform at the Pentagon, and in the nation’s entitlement programs. Programs like
Social Security, Medicare and Medicaid were established as safety-net programs to protect the most
vulnerable Americans against poverty. Unfortunately, these programs have grown so large that we
cannot pay for them as they are currently structured. It’s time for real leadership in Washington, D.C., to
reform them so they remain sustainable for the future. To ensure that the debate on spending receives
proper focus, Concerned Veterans for America (CVA) is hosting a session Thursday in Washington titled
The Need for Spending Reform. Speakers included former Democrat Ed Rendell, the former governor of
Pennsylvania, Senator Marco Rubio, R-Fla., and Senator Ted Cruz, R-Tex., who’ll share their views on
how to tackle the debt (you can watch it here). In President Obama’s second inaugural address six
months ago, he laid out his plans for the next four years. Unfortunately, his stated goals don’t include
facing down the reality about spending and the debt. That can only leave our nation less prosperous at
home, and less prepared to defend itself abroad. The President should look back at his National Security
Strategy from three years ago, to remind himself of the importance of fiscal responsibility to national
strength, both here and overseas. Then he should lead the charge to make it happen.
Debt impact – China
Debt causes vulnerability to China – risks heg collapse and nuclear war – assumes all
the warrants in their defense
VanNess 13 - Senior Outreach Manager at The Center for Security Policy (Alex, “China and U.S. Debt,”
American Thinker, March 22 2013, http://www.americanthinker.com/2013/03/china_and_us_debt.html
) //JG
As the U.S. federal debt is steadily climbing closer to $17 trillion, President Obama and Congressional
leadership are making statements that we "don't have an immediate crisis in terms of debt." All the
same, our bloated federal debt does pose a crisis. Not only will it slow economic growth, threaten us
with higher interest rates, and increase inflation; it also allows China to threaten our national security
and status as a world power. How does China's ownership of the U.S. debt really pose a danger to our
national security? China currently owns over 7% of U.S. federal debt via U.S. treasury securities. If China
were to decide to dump those treasuries, it would greatly increase the burden of servicing U.S. debt.
This could lead to a currency crisis forcing the U.S. to raise interest rates. Higher interest rates and
higher risk for borrowers will potentially make it difficult for the U.S. to find creditors and will create the
conditions for a recession. Additionally, statements made by numerous Chinese officials have expressed
support for the use of U.S. debt ownership as a weapon . Statements such as a senior editor of the
state-run media outlet China's People's Daily who wrote, "now is the time for China to use its 'financial
weapon' to teach the United States a lesson if it moves forward with a plan to sale arms to Taiwan." In
addition, according to China Times, the country's central bank deputy governor Yi Gang announced,
"China is fully prepared for a looming currency war should it, though 'avoidable,' really happen." Despite
statements such as these, most analysis of U.S.-China policy, including reports from the U.S.-China
Business Council (UCBC) as well as a report issued in July 2012 by former Secretary of Defense Leon
Panetta, argue that the threat of using large holdings of U.S. debt for political advantage is nothing more
than hot air. The conventional wisdom is that China would never dump U.S. securities because an abrupt
movement out of U.S. securities would be detrimental to both China and the United States. It would not
be rational for China to take huge losses because they would be harming themselves. The problem with
the conventional wisdom is that it leaves several questions unanswered, such as: what if China is not
rational? Alternatively, what if the potential damage to the Chinese economy is a calculated harm,
which will serve an ultimate end goal? China has been growing their financial sector but not for reasons
of improving the livelihood of their citizenry. The growth in their financial sector has had little effect on
the country's GDP, which they have covered by artificially inflating their GDP growth to a reported 7.8%
when in actuality, economic indicators indicate it to be closer to 3-4%. China has pumped extensive
liquidity into their internal currency markets and it is easy to assume that the growth of their currencies'
liquidity is a step toward gaining international reserve status for the Yuan. This currency liquidity
requires China to have an export market to develop for the Yuan. Over the past few decades, China has
become a global manufacturing hub with a near-monopoly on numerous key rare earth resources, China
is positioning itself as the key global manufacturing and trade hub for an array of components and
finished goods. The country now produces 20% of global manufacturing output, rendering the rest of
the world dependent on the flow of goods out of China. The icing on the cake of being the hub of
manufacturing and trade would be to have the Chinese Yuan as the world's reserve currency. At present,
the global financial system is centered on the U.S. dollar. Countries from around the world keep huge
reserves of our currency lying around for the sake of international trade. This reserve currency status
that the dollar possesses allows the U.S. to sustain an assertive foreign policy. If the dollar were to cease
being the global reserve currency, the U.S. government will be much weaker internationally. In addition,
the country will have a much harder time financing our debt, leading an already difficult to manage debt
impossible to maintain and collapsing our economy. It is important to note that China is not a capitalist
nation. Capitalist nations have thriving open markets and numerous freedoms such as an open internet.
The people of China do not have the luxury of capitalism; they have a repressive communist government
interested in power. China's power grab does not involve only financial markets. The Chinese military
has been growing at exorbitant rates over the past few years. Not only does China have a large nuclear
stockpile and a growing drone program, the growth of their naval fleet through the development of the
aircraft carrier Liaoning -- along with several more planned in the future -- will help solidify their status
as a superpower. An aircraft carrier will allow China to deploy troops and aircraft to regions around the
world. The Chinese People's Liberation Army has been linked to hacking groups that are seeking the
ability to sabotage power grids and steal intellectual property at alarming rates. Chinese hackers have
stolen terabytes of data from U.S. corporations involved in the United State's critical infrastructure. Not
only is China employing a highly antagonistic posture towards America. Their actions have grown more
aggressive toward their neighbors over the past several years. These activities continuously test
America's commitment to its Asian allies. China has grown increasingly belligerent towards Japan both
militarily as well as through their financial markets thanks to a longstanding dispute over the contested
Senkakus Islands in the East China Sea. Additionally, China, which regards Taiwan as a renegade
province, has threatened to use nuclear weapons in response to Taiwan's interests in autonomy. This
makes China the only country with nuclear capabilities to threaten to use the bomb against people and
territories they consider their own. When one looks at their trajectory, it is not hard to conclude that
China's long-term goal is to replace the U.S. as the world's sole superpower . While they have a lot to
lose by reverting to financial terrorism and dumping the dollar, they may feel that they will come out on
top after toppling the dollar. With a weakened America, and the international community relying on the
Yuan as a reserve currency, it is not hard to imagine China making good on their belligerence towards
their neighbors. After island hopping across Asia and the Pacific, it would only be a matter of time
before we start seeing the Chinese navy patrolling around Europe, Africa, and America. Despite
statements made by various analysts, there is a real threat that China will dump U.S. debt. The theory
that they will not because it would hurt their economy is predicated on the idea that China is a rational
actor looking for financial growth. However, any country that manipulates and lies to prop up their
financial markets; considers financial terrorism as a viable option for getting what they want; and
threaten their neighbors as well as their own people with nuclear weapons is not a rational actor that
belongs in the category of "superpower." Our growing national debt is a danger in and of itself, but
giving China the ability to flex its muscles by means of that debt is something that should not be allowed
to happen.
Debt tanks US/China relations
Dorn 8 - Vice President for Academic Affairs at the Cato Institute59 (James, “The Debt Threat: A Risk to
U.S.–China Relations?” The Cato Institute, Spring/Summer 2008,
http://object.cato.org/sites/cato.org/files/articles/dorn_bjwa_142.pdf ) //JG
The U.S. trade deficit and the foreign-held share of U.S. public debt should not be used as decoys to
divert attention from the imbalance between domestic saving and investment driven in large part by
too much government chasing too few markets. Shrinking the size and scope of government to increase
economic growth and generate more domestic savings is the main challenge that lies ahead. Economic
nationalism can only divert attention from that goal and interfere with productive and peaceful U.S.–
China relations. The United States’ economic and national security is best protected by a strong rule of
law and the safeguarding of economic and personal freedoms, not by crude protectionism. Individual
sovereignty under the rule of law has always been a hallmark of U.S. freedom. We should not let a
growing national debt and excessive government taxing and spending destroy that heritage in favor of
“economic sovereignty” or “investment protectionism.” If China follows a more market-liberal path and
the U.S. refrains from protectionism and is fiscally prudent, U.S.–China relations should evolve
peacefully and global prosperity will continue. The “balance of financial terror” strategy would then give
way to a more positive agenda for free trade and capital freedom, allowing markets to work their
magic.
Solves every impact
CFR 7 – Council on Foreign Relations Task Force (“U.S.-China Relations,” Council on Foreign Relations,
April 2007, http://www.cfr.org/china/us-china-relations/p12985 ) //JG
No relationship will be as important to the twenty-first century as the one between the United States,
the world’s great power, and China, the world’s rising power. China’s development is directly
transforming the lives of one-fifth of the world’s population, and is otherwise influencing billions more.
China’s rapid economic growth, expanding regional and global influence, continued military
modernization, and uneven human rights record are also shifting the geopolitical terrain and
contributing to uncertainty about China’s future course. After thirty-five years of “engagement,” the
United States and China have a relationship that was truly unimaginable two generations ago. At the
same time, there are some Americans who believe that China’s strategic interests are incompatible with
those of the United States. The Council on Foreign Relations established an Independent Task Force to
take stock of the changes under way in China today and to evaluate what these changes mean for China
and for the U.S.-China relationship. Based on its careful assessment of the developments in the country
and China’s likely future trajectory, the Task Force recommends that the United States pursue a strategy
focused on the integration of China into the global community and finds that such an approach will best
encourage China to act in a way consistent with U.S. interests and international norms. The Task Force
concludes with a series of recommendations aimed to reinforce recent efforts to deepen U.S.-China
cooperation. The overall message is that while the United States should not turn a blind eye to the
economic, political, and security challenges posed by China’s rise and should be clear that any aggressive
behavior on China’s part would be met with strong opposition, U.S. strategy toward China must focus on
creating and taking advantage of opportunities to build on common interests in the region and as
regards a number of global concerns .
Debt impact – economy
Debt causes Fitch to downgrade the dollar – kills the economy
Newsmax 12 – (“Fitch: US Risks 2013 Rating Downgrade Without 'Credible' Deficit Plan,” Newsmax,
June 7 2012, http://www.newsmax.com/Newswidget/Fitch-USRatingCut/2012/06/07/id/441536?promo_code=EF021&utm_source=Shark&utm_medium=nmwidget&utm_campaign=widgetphase1 ) //JG
Fitch Ratings reiterated that it would cut its sovereign credit rating for the United States next year if
Washington cannot come to grips with its deficits and create a "credible" fiscal consolidation plan. It also
said it would immediately cut the credit ratings on Cyprus, Ireland, Italy, Spain and Portugal if Greece
were to exit the eurozone. Additionally, all eurozone nations would have their ratings put on its negative
ratings watch list, setting a six-month time frame for a potential downgrade. Europe's ongoing sovereign
credit crisis undermines already below-trend growth seen in the United States, the world's biggest
economy. Editor's Note: Startling Proof of the End of America’s Middle Class. Details in the Video "The
United States is the only country (of four major AAA-rated countries) which does not have a credible
fiscal consolidation plan," and its debt-to-GDP ratio, or how much debt it has relative to the size of the
economy, is expected to increase over the medium term, Ed Parker, sovereign ratings analyst, told a
Fitch conference in New York. Lower credit ratings typically lead to higher borrowing costs, putting more
strain on government balance sheets already straining to cut spending without sending their economies
into a tailspin . Only in the last week have European leaders broached the prospect of closer economic
and political ties to overcome the crisis which has forced severe austerity budgets on Europe's citizens.
German and European Union officials are looking into ways to rescue Spain's debt-stricken banks even
though Madrid has not called for aid and resisted international supervision. A voter backlash returned a
socialist government in France and boosted the chances for the same in Greece which could put its 130billion-euro international bailout plan in jeopardy. Fitch revised down its credit outlook for the United
States to negative in November from stable after a special congressional committee failed to agree on at
least $1.2 trillion in deficit-reduction measures. At the time it said there was a chance for a U.S.
downgrade in 2013, saying the failure of the committee increases the fiscal burden on the next
administration. A change in an outlook sets a 12-18 month time frame for making a decision. A negative
outlook signifies there is a greater than 50 percent chance for a downgrade, and vice versa if the outlook
is positive. "The United States is the only one of the four largest economies whose debt as a percentage
of GDP is expected to increase over the next five or six years," Parker said, referring to the United States,
Britain, Germany and France. The U.S. economy's growth rate in the first quarter was revised down last
month to 1.9 percent from a prior estimate of 2.2 percent as businesses restocked shelves at a
moderate pace and government spending declined sharply. It grew 3.0 percent in the fourth quarter of
2011. Standard & Poor's made history in August 2011 when it cut the U.S. credit rating to AA-plus from
AAA. It has held it with a negative outlook ever since. Moody's Investors Service has the United States
rated at Aaa, also with a negative outlook as of November last year. All three of the ratings agencies
have said they essentially do not expect much change in the U.S. budget situation or fiscal position until
after the November presidential election. The negative outlook from S&P gives it a six-to-24-month
window for making a decision while Moody's defines its time frame as 12 to 18 months. Fitch respects
the size and flexibility of the U.S. economy but the "rising trajectory" of its debt could lead to the same
kind of economic stagnancy that has long plagued Japan, Parker said.
Global economic collapse causing nuke war
Porter 6 - Director of Business Development-Structures at General Dynamics (Dave, “Oregon Steel,”
Blue Oregon, December 8 2006, http://www.blueoregon.com/2006/12/ff_oregon_steel.html ) //JG
There could be a soft landing or a domestic and international disaster. As Clyde Prestowitz in "Three
Billion New Capitalists: The Great Shift of Wealth and Power to the East" writes: "The nightmare
scenario - an economic 9/11 - is a sudden, massive sell-off of dollars; a world financial panic whose
trigger might be as minor, relatively speaking, as the assassination of a second-rate archduke in a thirdrate European city. A collapse of the dollar and its consequent abandonment as the world's reserve
currency would create a deep recession in the United States . Gas and fuel prices would soar, anything
imported would suddenly become much more expensive, interest rates would jump, as would
unemployment. The "stagflation" of the 1970's - slow growth and high unemployment combined with
double-digit interest rates-would look like a walk in the park. And since the United States is at present
the world's only major net importer, all of the exporters that depend on it for their economic stability
would suffer severely as well. It's the thought of these consequences that make the big dollar holders so
nervous, and makes them, for now, hold on to their excess dollars." Our economy has been totally
mismanged and it's scary. And beyond the worldwide economic ruin, international cooperation would
break down and wars would erupt . Peoples around the world would be so vulnerable and angry that
they would blame and envy their neighbors. I am particularly concerned about China-US relations
during the rest of the 21st century. Both countries would be under severe stress in such a scenario.
Nuclear exchanges would not be impossible . As I have argued in our proposal "Developing the China
Connection through Educational Programs," we need to give our children the skills to get through such a
crisis.
AT: Debt crisis exaggerated
The debt crisis is substantially worse than official estimates – many reasons
Altman and Haass, 10 – *former US Deputy Treasury Secretary AND **President of the Council on
Foreign Relations (Roger and Richard, “American Profligacy and American Power: The Consequences of
Fiscal Irresponsibility,” Foreign Affairs, November/December, proquest)
It is important to understand the impact of all this debt. As it grows, interest rates inevitably rise. As
they do, the U.S. government's annual interest expense-the cost of borrowing money-will rise from one
percent of gdp to four percent or more. At that point, interest expense would rival defense
expenditures. And it would exceed all domestic discretionary spending, a category that includes
spending on infrastructure, education, energy, and agriculture-in effect, anything other than
entitlements and national security. The U.S. Treasury would need to borrow a staggering $5 trillion
every single year, both to finance deficits and to refinance maturing debt.
Yet the real outlook for deficits and debt is much worse than these forecasts. For one thing, the debt
that the United States effectively guarantees but that is not included in official totals is almost equal to
the Treasury Department's stated $9 trillion total. In particular, the debt of government-sponsored
enterprises is another $8 trillion. The biggest of these are the essentially bankrupt housing finance
agencies, Fannie Mae and Freddie Mac . They have been placed into federal conservatorship, and for all
practical purposes, their debt is equivalent to U.S. Treasury debt. The American taxpayer stands fully
behind it.
State and local governments also owe huge amounts, on the order of $3 trillion. And again, Washington
indirectly stands behind much or all of it. This sector is deeply distressed, with the largest state,
California, recently issuing ious. Moreover, many state and municipal pension systems use an antiquated
pay-as-yougo funding approach, which has left them underfunded by another $1 trillion.
The post-2020 fiscal outlook is downright apocalyptic, for two reasons. First, the aging of the U.S.
population will drive sharp increases in health care costs (and at the same time, more Americans will be
retired). Second, federal interest expense will rise exponentially, as the Treasury's borrowing costs grow
with the debt. The Congressional Budget Office projects that official federal debt (excluding
government-sponsored enterprises) could hit 110 percent of gdp by 2025 and 180 percent by 2035.
Adjusting these forecasts for the inevitably slower growth that would accompany such quickly rising
debt levels means hitting those stratospheric ratios sooner.
High deficits will continue through 2020
Altman and Haass, 10 – *former US Deputy Treasury Secretary AND **President of the Council on
Foreign Relations (Roger and Richard, “American Profligacy and American Power: The Consequences of
Fiscal Irresponsibility,” Foreign Affairs, November/December, proquest)
Then, on top of this, the financial and economic crisis struck in 2008, and the United States confronted
the possibility of a i93os-style depression. Washington correctly chose to enact a large stimulus program
and rescue tottering financial institutions. So far, such efforts have worked, at least to the degree that a
depression was averted. A recovery (albeit one that is halting and weak by historical standards) is under
way. But the gap between spending and revenues has widened much further. Revenues, which had
averaged 20 percent of gdp during the 1990s, fell to nearly 15 percent, while spending reached 25
percent in 2009. The deficit for fiscal year 2009 hit a staggering $1.6 trillion, or nearly 12 percent of a
gdp of just over $14 trillion. In nominal terms, it was by far the largest in U.S. history. The deficit for
2010, at $1.3 trillion and nine percent, was nearly as huge.
The medium-term outlook is poor. The Congressional Budget Office forecasts $9.5 trillion of cumulative
deficits through 2020-in other words, roughly $1 trillion per year. The deficit-to-GDP ratio should
decrease briefly during the middle of this period, as modest economic growth boosts revenues. But as
2020 approaches, it will rise again, back to nearly six percent, the consequence of sharply higher
entitlement costs and slow gdp growth. President Barack Obama's own budget shows this same trendthe first time a U.S. president has ever projected deficits that go back up.
Federal debt is the dollar-for-dollar result of deficits, and it has essentially tripled over this past decade,
from $3.5 trillion in 2000 (35 percent of gdp) to $9 trillion in 2010 (62 percent of gdp). The Congressional
Budget Office now sees it reaching 90 percent by 2020.
Trade advantage
Mexico key to global trade
American leadership is vital to Mexican integration – solves wide scale liberalization
measures
Scissors 12 – Research Fellow for Asia Economic Policy at The Heritage Foundation's Asian Studies
Center (Derek, “Boost for the U.S. and the Trans-Pacific Partnership,” 6/18/12,
http://blog.heritage.org/2012/06/18/boost-for-the-u-s-and-the-trans-pacific-partnership/)//SJF
The G-20 meetings in Mexico over the weekend might actually have accomplished something.
Mexico was today invited to join the nine countries, including the U.S., currently negotiating the TransPacific Partnership (TPP), an investment and trade agreement. If nurtured properly, this development
has the potential to improve the global trading system.
First, caution is required. The terms of the TPP accord to this point have been closely guarded, most
likely to spare the Obama Administration from attacks by protectionists. So what the TPP will actually
accomplish is an open question.
What it could accomplish with Mexican participation, though, is heartening. Since the inception of the
global trading system, the American market has been an irresistible lure to countries that pin their
development hopes on exports. While the system is hardly perfect, it has enabled multi-sided
liberalization in the form of countries making deals to ensure the best possible access to the U.S.
Mexico, of course, is part of the North American Free Trade Agreement (NAFTA). Nonetheless, a key
reason Mexico wants to join is because TPP might improve on NAFTA in certain respects. Mexico is
concerned that the evolving TPP framework could give countries such as Vietnam, a current party to the
talks, a bit of an edge in winning U.S. business.
Now the fun part. If Mexico does sign a vibrant, effective TPP, which admittedly doesn’t exist yet, the
world will sit up and take notice. There are a lot of countries that see Mexico as serious competition.
Some of these countries can be seen as outright trade predators, others as obstacles to progress at the
World Trade Organization (WTO).
A TPP with Mexico could very well prompt these countries to meet challenging requirements to join TPP
or to be “flexible” in discussing more powerful liberalization under the WTO. It doesn’t stop there. One
major economy responding to Mexico will get the attention of others.
Japan is an obvious domino: Tokyo does not seem capable of acting decisively, despite its obvious need
for reform. A critical mass of countries in the TPP may be the best hope to spur Japan on. And if Japan
were somehow able to join the TPP, it would in turn be a tremendous gain for the initiative.
First and foremost, TPP has to be a good agreement. If it does turn out to be one, Mexico joining just
changed the game for the better.
Spills over to negotiation leverage on environmental and labor provisions – ensures
stable talks
Wasson 12 – Staff writer at the Hill (Erik, “Mexico invited to join US-backed Pacific free trade
agreement talks,” 6/18/12, http://thehill.com/blogs/on-the-money/1005-trade/233221-mexico-invitedto-join-us-backed-pacific-trade-talks)//SJF
The United States formally announced Monday that Mexico has been invited to join the Trans-Pacific
Partnership (TPP) trade talks.
"We are obviously two of our most important trading partners to each other, but we both recognize that
growth is going to take place in the Asia Pacific region," President Obama said at the meeting of the G20 in Los Cabos, Mexico.
The administration has been negotiating the free-trade agreement — the only major trade deal high on
the U.S. agenda at the moment — with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore
and Vietnam.
Until this week, NAFTA partners Mexico and Canada had been unable to meet conditions needed to join
the talks.
The U.S. had pressured Mexico to resolve issues related to the beef and potato trade as well as to
intellectual property protection. The U.S. also wanted Mexico to agree on negotiating labor and
environmental provisions which are not in NAFTA.
The announcement now puts pressure on Canada to make agricultural trade concessions in order not to
be left out. So far, Canada has resisted putting its supply-managed dairy and livestock sectors on the
table.
"[M]ost importantly, at this time of recession in some areas of the world, of a slowdown in others, the
TPP, or Trans-Pacific Partnership, perhaps represents the greatest potential area of growth in an entire
decade," Mexican President Felipe Calderon said in response to the announcement, which was timed to
coincide with the G-20 summit in Mexico. "So this is a great piece of news for Mexicans because it
implies jobs and economic growth for at least the next two decades."
There have been 12 rounds of negotiations since TPP talks started under President George W. Bush's
administration. The next round is in San Diego in July.
House Ways and Means Committee Chairman Dave Camp (R-Mich.) welcomed the news.
"I applaud Mexico’s decision to resolve key issues and its commitment to adopt TPP’s high standards
and ambition," he said.
Republicans in Congress want President Obama to push for fast-track trade negotiating authority as
soon as possible in order to smooth a TPP deal. Unless fast-track is renewed, the administration will not
be able to complete the TPP talks without worries that Congress could delay or amend any final
agreement.
Japan is also seeking to join the TPP talks but doing so would mean putting its highly protected farm
sector on the table.
As more nations join the talks, the TPP is fast becoming the most ambitious trade agreement the U.S.
has ever undertaken.
Mexico’s experienced and contributes to TPP success – bilateral cooperation is key
Garcia de Alba 12 – Mexico’s secretary of economy (Bruno Ferrari, “Let Mexico in on trade
agreement,” 3/5/12,
http://www.economia.gob.mx/files/7_Let_Mexico_trade_agreement_Ferrari.pdf)//SJF
Since 2007, Mexican President Felipe Calderon has expressed our country’s interest in joining
negotiations to create what is known as the Trans-Pacific Partnership, a new trade agreement linking
nations throughout the Pacific region.
The countries involved in these talks are creating a groundbreaking agreement with the highest of
standards. As the United States, and the eight other TPP partners, considers new entrants to this pact, it
should do so with the same forward-thinking approach that has governed the talks so far.
For example, the United States must consider the steady growth of its exports to Mexico, which is, dollar
for dollar, the most dynamic U.S. export market. It is the second-largest U.S. export destination,
consuming nearly $200 billion in U.S. goods last year — more than China and Japan combined. In
addition, last year’s $34 billion increase in U.S. exports to Mexico outpaced the value increase to all the
priority export markets for the U.S.’s National Export Initiative.
Even more compelling is the fact that, after 18 years of the North American Free Trade Agreement, the
economies of the United States and Mexico are closely integrated and grow ever more intertwined. The
United States and Mexico now produce goods jointly for global consumption, demonstrated by the 37
percent U.S. value added in Mexico’s global exports. In contrast, U.S. value added in Chinese exports is
only 3.7 percent.
Moreover, for every dollar Mexico gains from exports, 50 cents is spent on U.S. goods and put back in
U.S. coffers.
So Mexico’s inclusion in the TPP would be of real value to Washington — not only because it could
provide an immediate boost to U.S. exports but also because increased Mexican sales to TPP markets
would translate into more U.S. exports, a virtuous cycle. It would result in more jobs on both sides of the
border. Our bilateral trade already supports nearly 6 million jobs in the United States, according to a
2010 U.S. Chamber of Commerce study.
Washington must also take into account the size and value of Mexico’s expanding market. Mexico is, by
population, the second-largest market among current TPP members. Our gross domestic product grew
5.4 percent in 2010 and almost 4 percent in 2011. Mexico is on pace to become the fifth-largest
economy in the world by 2050, according to Goldman Sachs.
In developing U.S. trade policy moving forward, it would be unwise for Washington to exclude the
largest Latin American economy in the Pacific region from this comprehensive trade bloc.
Mexico is a top economic partner that should not be ignored — an ally that has worked hard and is well
prepared to engage in this next-generation trade pact. It already has an established network of 12 freetrade agreements with more than 40 countries — including three current TPP members. We clearly have
the experience and readiness to join the TPP discussions.
Notably, we recently concluded an exercise similar to the TPP, merging three free-trade agreements
with Central American countries into a single pact. Mexico has also successfully deepened its free-trade
agreements with Colombia and Japan.
Internally, Mexico’s interest in joining the TPP takes another step in our drive toward a better future.
Mexico has undergone a transformative process in the past two decades, releasing its economy from
the chains that prevented development. Our commitment to robust monetary policy and sound public
finances has given Mexico a new level of macroeconomic stability. Major investment in our people has
led to a flourishing middle class — one that will make up to an estimated 80 percent of the population
by 2030, according to The Brookings Institution.
In addition, trade in Mexico has expanded and diversified because of unilateral reduction of tariffs, the
initiation of substantial regulatory reforms, and the simplification of import and export permit
procedures. Coupled with these measures, we have stepped up efforts to work with the United States
on increasing regional cooperation, building a modern and efficient border, boosting innovation and
protecting intellectual property rights.
We have also sought to work together to promote exports of small- and medium-sized enterprises
because our geographic closeness and assured access provide them with significant opportunities. These
efforts find many parallels in the TPP agenda.
Over NAFTA’s nearly two decades, Mexico has proved to be a trusted and collaborative partner, one
that believes in a rules-based, free-trading system. The TPP presents a new horizon with great
opportunities for our trade relationship.
In preparing for the long term, the United States should embrace its ties with Mexico and continue
building on our successful decades of bilateral trade experience to further our mutual well-being.
TPP key to trade
The TPP will reassert US leadership and increase free trade
Lewis 11 - Meredith Kolsky Lewis received her BA from Northwestern University and her J.D.
and MSFS degrees from Georgetown University. Prior to entering academia she praacticed
international trade and litigation in the Washington, DC and Tokyo offices of Shearman &
Sterling LLP. Lewis’s research focuses on international economic law, with a particular
emphasis on international trade law and the World Trade Organization. She teaches public and
private international law subjects, including International Trade Law and International
Business Transactions. She is also Director of the Canada-United States Legal Studies Centre,
(“The Trans-Pacific Partnership: New Paradigm or
Wolf in Sheep’s Clothing?”, 1-1-2011,
http://lawdigitalcommons.bc.edu/cgi/viewcontent.cgi?article=1264&context=iclr)//sawyer
The Obama administration is wise to negotiate for a Trans-Pacific Partnership. Such an
agreement has the potential to re-assert the United States’ position as a leader and
economic participant on both sides of the Pacific. It also represents the best chance,
among the options otherwise in play, for the United States to play a role in shaping a future
Free Trade Area of the Asia-Pacific (FTAAP). The TPP agreement has the potential to act
as a building block toward further liberalization, and to multilateralize some of the
fragmentation resulting from the panoply of FTAs today. If a TPP agreement is
reached in the form of one unified agreement with common market access schedules, it will have
a greater potential to attract more participants and meaningfully reduce trade barriers among a
growing circle of nations. Nevertheless, there is a significant risk that the TPP will not live up to
its potential. The more the TPP looks like a series of bilateral U.S. FTAs with exclusions for
products the United States considers sensitive, the less likely the TPP will attract other
countries to accede. Thus, the United States must carefully assess its goals for the TPP.
Moreover, the United States must be careful not to shoot itself in the foot by following a
“business as usual” approach, if it truly intends to create a high-standards agreement that will
be a model for an FTAAP. The traditional U.S. FTA model is not as likely as the model
advocated by Australia, New Zealand, and Singapore, to achieve the result the USTR claims to
be pursuing. Nonetheless, it will be surprising if the United States agrees to diverge from its
previous negotiating strategies and assent to the model advocated by Australia, New Zealand,
and Singapore. There are a number of impediments that may torpedo the TPP agreement
before it is concluded, and other factors that could render any agreement of no more
significance than any other U.S. FTA. Nevertheless, the TPP agreement has the potential to
become a new paradigm for trade agreements, to help the United States re-assert its position in
the Asia-Pacific, and to begin the process of defragmenting international trade. The potential
payoffs are significant and important: hopefully the United States can resist the temptation to
pursue “business as usual” —an approach that would actually undermine its strategic
objectives—and instead take the necessary steps to achieve those goals.
TPP solves problems with Free trade and leads to convergence
Perales 12 - José Raúl Perales is executive director of the Association of American Chambers
of Commerce in Latin America (AACCLA) and a lecturer at the Elliott School of International
Affairs at The George Washington University(“The Hemisphere's Spaghetti Bowl of Free-Trade
Agreements”, April 27, 2012, http://www.americasquarterly.org/perales)//sawyer
But the growing number of free-trade agreements has also posed management challenges and
transaction costs that can potentially affect the gains from free trade. The increasingly
complicated web of FTAs raises concerns about overlap, duplication and conflicts
of rules and technical standards. For example, standards vary from agreement to
agreement on issues such as the acceptable levels of pesticides for certain agricultural exports
and in-country content requirements for machinery equipment exports. Even when free-trade
agreements exist among countries participating in a commodity chain, differences in rules of
origin may impose additional costs by forcing producers to change their supply chains to
source from an FTA-partner country or from one where the rules of origin involve more
favorable terms. This is a salient feature of Mercosur’s automotive regime, which was conceived
to promote investments by a key group of transnational companies that sought to boost
production linkages and build supply chains with local providers, particularly small- and
medium-size businesses. The Mercosur example illustrates how rules are often tailored in
response to sectoral pressures as producers adapt to foreign competition. Rules of origin also
may serve a political and economic function: they facilitate an adjustment process to foreign
competition that results from greater commercial openness. This is particularly the case in key
or sensitive sectors like textiles, autos and agricultural products like poultry or beef. As countries
adapt to freer trade and lower trade barriers, they should, in theory, have greater incentives to
standardize the FTAs’ rules of origin. In Latin America, about 89 percent of foreign trade is
covered by a preferential or free-trade agreement, while the average external tariff for the
remaining items hovers near 10 percent—down from over 40 percent in the early 1980s. In
addition, negotiating an FTA with a powerful trading partner like the U.S. ought to provide
another strong incentive to converge rules of origin. But this has not happened. In
more than half of the FTAs concluded by Mexico, Chile and Peru (all signatories to FTAs with
the U.S.), the same rules of origin apply for only slightly more than 40 percent of traded
products. Regionally, FTAs include a complex web of rules of origin involving nearly 40 annexes
of rules per product and 24 regulatory chapters.6 Complicated or restrictive rules of origin
hinder the development of “cumulation processes” in which producers in one FTA country use
inputs from another FTA country to make goods without affecting the preferential status of the
finished product. This runs contrary to one of the basic premises of free-trade agreements:
countries are likely to be more attractive to foreign investors because preferential market access
and the possibility of cumulation allows companies to build lean cross-country supply chains
and lower costs of production. Successful examples of cross-border production include textiles
in Central America and automobile production in the Mercosur countries. Policy Responses
Beyond just getting a trade agreement in place, governments also have to ensure its proper
functioning and to develop complementary agendas in areas, such as trade facilitation and
customs efficiency, competitiveness policies, and even workforce development. Governments
sometimes use the policy space created by FTA implementation to pursue policies associated
with, but not strictly belonging to, the concluded trade agreement. This was the case in Peru. In
the wake of negotiating the FTA with the U.S., President Alan García’s government submitted 99
legislative decrees on a wide range of issues, including the creation of a civil service, supposedly
to comply with the U.S.–Peru Trade Promotion Agreement. For countries like Mexico and Chile,
implementation of FTAs has created an opportunity to make necessary reforms both in the way
trade policy is formulated and in the overall policymaking environment, especially on issues of
transparency and the business environment.7 These reforms, including competition policy,
investment rules and regulatory framework changes, supported the ambitious array of trade
negotiations both countries launched in the 1990s. But doing so requires a commitment of
resources, both financial and human, that may lie beyond the means of many government
budgets and the capacity of technocrats. Concerns over these resources and commitments to full
FTA implementation have underpinned recent efforts in support of trade facilitation,
particularly in the Dominican Republic–Central America–United States Free Trade Agreement
(DR-CAFTA) region. In the same vein, the idea of linking or harmonizing the various Latin
American free-trade agreements is gathering strength. Doing so would also reduce the hub-andspoke behavior of regional FTAs, where multiple countries possess an FTA with a given country
(the “hub”), but there is no connection among the different partners (the “spokes”). In cases
where there are similar FTAs—both in terms of scope and actors involved—a convergence of all
or portions of these FTAs, especially rules of origin, would dramatically reduce the burdens of
administration and enforcement. That would apply, for instance, to the FTAs concluded by
Mexico and Chile with Central American countries, or to the partial-scope agreements
concluded under the rubric of the Latin American Integration Association. Convergence
would also reduce the private sector’s burden of complying with competing or
overlapping rules and regulations, and thereby allow businesses to improve
productivity. It would expand the universe of cumulation sources, thus reducing the
transaction costs of sourcing and eliminating possible disincentives arising from competing
rules applied to the same product.8 Consequently, the private sector has expressed interest in
convergence. But actual convergence would require a negotiation exercise that may be politically
difficult because of the enormous effort required to secure ratification of the FTA in the first
place. In some cases, however, specific FTAs have language that allows for the possibility of
extended cumulation with other countries that share FTAs, thus avoiding separate approval
processes. This is the case in Canada’s FTA with Peru (2009), allowing it to negotiate extension
to the other countries with which it shares FTAs (like Chile and the U.S.).9 Furthermore, since a
substantial percentage of Latin America’s trade already takes place through some type of
preferential program, convergence of FTAs can lead to increased gains from trade that extend
beyond the actual network of free-trade agreements. This is different from the now-abandoned
dream of creating a Free Trade Area of the Americas. The countries tied up in individual FTAs
have already worked on the elimination of tariff and nontariff barriers for trade in goods and
services. Many are now searching for ways to streamline rules and create a more dynamic and
efficient way of engaging in free trade. Such is the case for Mexico and the Central American
countries, which in November 2011 concluded the process of consolidating their various FTAs
into a regionwide trade regime for goods and services. Considering its central role in the
spaghetti bowl of free-trade agreements in Latin America, the U.S. should play a pivotal role in
FTA convergence. This could start with harmonizing the rules of origin for textiles in the various
FTAs negotiated by the U.S. with Latin America and the Caribbean. Since textiles involve some
of the most politically sensitive aspects of trade negotiations, both in the U.S. and in Latin
America, an agreement on a single rule of origin for textiles would pave the way for convergence
in other realms. Of course, any move in this direction would require a serious investment of
political capital that is currently not evident in Washington. Yet the current
negotiations of the Trans-Pacific Partnership (TPP) between the U.S. and six
countries in the Pacific Rim offer a renewed possibility of FTA convergence. Three
of the countries engaged in TPP negotiations already have FTAs with the U.S.
(Singapore, Chile and Peru) and two others have applied for admission into the negotiations
(Mexico and Canada). Their accession raises the chance that, given the convergence of
possibilities already being negotiated among these countries, the process might eventually be
expanded to all Latin American countries in the Pacific Rim that have an FTA with the United
States. Given that it remains the central axis for most trade agreements in the region, the U.S. is
uniquely positioned to start the process. Political support for trade expansion is difficult, but
already the movement toward harmonization is starting to pick up strong backing from the U.S.
and regional business communities. This should surprise no one. If Latin America is to fully
realize the potential unlocked by trade liberalization, it must move in the direction of greater
convergence. The foundation has already been laid. The region already has a robust
set of trade rules and preferential pacts that have woven together markets that
once operated at cross-currents to one another. Arguably, the task of harmonization will
be no easier to accomplish. Existing free-trade agreements must be fully implemented, and the
clutter of overlapping rules and regulations that continue to stand in the way of full
harmonization must be eliminated—with the ultimate goal of developing a set of clear and
transparent rules for doing business anywhere in the Americas. But by keeping that goal firmly
in mind, the governments of the Americas can free up the resources and recently developed
expertise currently devoted to FTA management to craft policies that can truly bolster the
region’s competitive position—and at the same time improve the lives and living conditions of
their people.
The TPP is the embodiment and survival of free trade
Gordon 12– Bernard Gordon is a writer for Americas Quarterly and is Professor Emeritus of
Political Science at the University of New Hampshire. He is the
author of America’s Trade Follies and a forthcoming book about the Trans-Pacific Partnership,
(“Reducing trade barriers makes sense at any level.” October 2012,
http://www.americasquarterly.org/Gordon)//sawyer
Bilateral and regional trade agreements like the Trans-Pacific Partnership (TPP) are not
only consistent with the spirit and commitments of the World Trade Organization (WTO), they
are the only things keeping the global push toward free trade alive. In fact, given the
current paralysis in the WTO’s Doha Round of negotiations, agreements like the TPP may
represent the future of free trade. Foreign trade was not a prominent issue during much of
President Barack Obama’s first year in office. That changed in November 2009, when he
announced the U.S. would “engage” in an ambitious effort to establish a genuine free trade area
in the Pacific region: the Trans-Pacific Partnership. The TPP grew out of a 2002 agreement
among Chile, Singapore and New Zealand, became formalized in 2005 when Brunei joined and
picked up speed in 2008 when Australia, Vietnam, Peru, and the U.S. all expressed interest in
joining. The TPP would encourage small-business participation in foreign trade, deal with such
sensitive issues as government procurement policies and the products of state-owned
enterprises, and deeply affect trade involving issues of copyright, patents, and intellectual
property. The U.S.’ formal participation brought the TPP’s size to nine, and Washington has
since taken the leading role in TPP negotiations—making it the central feature of U.S.
trade policy. Inevitably, these developments led to questions about their meaning for the
integrity and future of the WTO. The recent prominence of the TPP makes those questions
especially pertinent because the number of “regional” economic and trade arrangements, of
which the TPP is one, has risen sharply during the past two decades. In contrast, the WTO is
intended to be the single global body dedicated to setting the rules for international trade,
generally by reducing trade barriers among nations. Leading trade economists such as Anne O.
Krueger and Jagdish Bhagwati have been outspoken in expressing concerns that this more
focused activity on trade may portend a decline in America’s long-standing support for the WTO
and its goals. Article 24 of the WTO, drawn from its predecessor, the General Agreement on
Trade and Tarriffs (GATT), allows exceptions for regional arrangements as long as their
agreements apply to “substantially all the trade” among participants. Neither GATT nor the
WTO has had any ability to enforce that provision. One result is that more than 500 such
regional trade arrangements, called RTAs by the WTO, now exist; for many of those RTAs, their
principal relationship to the WTO has been to simply notify the world body of their existence.
Although the WTO does not draw formal distinctions among the different kinds of RTAs, it is
possible nevertheless to distinguish three distinct categories of regional trade bodies. Type I
includes the European Union and the North American Free Trade Agreement (NAFTA). Both
have brought significant lowering of trade barriers among their members, and expanded their
intra-regional trade. Specific sectors of some members’ economies have been negatively
affected—for example, in NAFTA, U.S. exports to Mexico of less-expensive American corn and
wheat caused problems for Mexican farmers. But since the key actors in both NAFTA and the
EU continued to be supporters of the multilateral trade agenda, neither agreement has damaged
the broad purposes of the WTO. A different judgment applies to the much larger Type II
category of regional trade agreements, often called “free trade areas.” They include Mercosur,
the China-ASEAN FTA, and several “economic partnership” agreements. Mercosur in its early
years did contribute to increases in intra-regional trade. But it has fallen on hard times and
Venezuela’s recent admission, as an experienced analyst puts it, “effectively puts to rest the
pretense of Mercosur as a serious economic integration arrangement.”1 Likewise, the large
China-ASEAN FTA, with its dozens of exceptions, also makes a mockery of its “free trade area”
label. Critics cite three complaints. First, they argue all such FTAs should instead be called
“preferential trade agreements” (PTAs), because by granting trade-opening measures only to
their members, they detract from the goals of the WTO. Second, the sharp rise in regional
arrangements has damaged the WTO’s centrality to the world trading system. If states can
achieve their goals by virtue of regional FTAs, why bother with the WTO? Finally, because many
RTAs allow for numerous exceptions—so members can exclude select goods and services from
their trade agreements—they do not meet the “substantially all trade” standard of the WTO’s
Article 24. The same is not true for the TPP. What puts the TPP into a separate category, Type
III, is both its plurilateral nature and its genuine free trade goals. Indeed, the
TPP’s more than 20 chapters reach into every sector of a nation’s economy that is
involved in foreign trade, including merchandise, agricultural goods, banking,
insurance services, and trade-related activities on the Internet. One indication of the
significance of the TPP is that both Canada and Mexico just joined in October, meaning the bloc
will encompass 658 million people and a combined GDP of $20.5 trillion. Another telling clue
about the nature of the TPP is in its origins: the three small states that began negotiations—
Chile, Singapore and New Zealand—have led the world with their open-trade policies. In sum,
the TPP aims for a comprehensive trade-liberalizing agreement that will not only
deepen traditional WTO reforms but add new obligations in “areas not yet subject
to WTO disciplines.” No one knows whether these aims will be fulfilled, but their purpose
reflects deep and enduring U.S. goals fully consistent with the GATT’s original commitment to a
world of open trade. The multilateral and global GATT/WTO approach had strong U.S. support
for more than 50 years, and its successes helped the WTO grow to more than 150 members. In
fact, it may be the WTO’s size that has contributed to its present stasis, partly explained by
former USTR Robert Zoellick’s comment that the “won’t do” nations have prevailed over those
who “can do.” In contrast, the TPP reflects that “can do” mission, and, rather than detracting
from the WTO, is likely to sustain the genuinely open-trade goals shared by the U.S. and the
WTO.
TPP is key to trade and commitment in the Pacific
Gordon 12– Bernard Gordon is a writer for Americas Quarterly and is Professor Emeritus of
Political Science at the University of New Hampshire. He is the
author of America’s Trade Follies and a forthcoming book about the Trans-Pacific Partnership,
(“Trading Up in Asia Why the United States Needs the Trans-Pacific Partnership” July 2012,
http://relooney.fatcow.com/0_New_14336.pdf)//sawyer
To move its trade agenda forward, the White House has instead embraced a measure between
the global Doha Round and the bilateral FTAs: a plurilateral process centered on the
Trans-Pacific Partnership. Currently being negotiated by Australia, Brunei, Chile, Malaysia,
New Zealand, Peru, Singapore, the United States, and Vietnam, the TPP will represent one
of the world’s most expansive trade agreements. And if Canada, Mexico, and especially
Japan, all of which expressed interest in joining the negotiations last November, also sign the
agreement, the TPP will add billions to the U.S. economy and solidify Washington’s political,
financial, and military commitment to the Pacific for decades to come. Given the potential
windfall, the Obama administration believes that the TPP has a better chance of
overcoming domestic opposition than would a Doha agreement or new bilateral
deals
TPP will increase trade, competitiveness, and the economy
James 10 -Sallie James is a policy analyst with Cato’s Herbert A. Stiefel Center for Trade Policy
Studies. James writes and speaks on a variety of trade topics, with a research emphasis on the
subject of agricultural trade policy, James received her Bachelor of Economics and Master of
Economics degrees from the University of Adelaide, and her Ph.D. in Agricultural Economics
from the University of Western Australia, (“Is the Trans-Pacific Partnership Worth the Fuss?”,
March 15, 2010, http://www.cato.org/publications/free-trade-bulletin/is-transpacificpartnership-worth-fuss)//sawyer
There is potential for the agreement to expand even further. Indeed, in his letter to
congressional leaders announcing the administration’s intentions, Ambassador Kirk pointed to
the deal’s potential to one day take in other members as one of the reasons for joining: “U.S.
participation in the TPP Agreement is predicated on the shared objective of expanding this
initial group to additional countries throughout the Asia-Pacific region.” Malaysia, with whom
bilateral negotiations stalled in 2007, signaled some interest in joining in February 2010.1 It is
true, as Ambassador Kirk wrote, that the Asia- Pacific region is huge and growing. Table 1 shows
the relatively fast growth rates in most members over the last decade. Economic engagement
in the region is overwhelmingly in the U.S. national interest. Kirk pointed out that
U.S. goods exports to the region grew by more than 8 percent in 2008 and its service exports by
7.7 percent2 (although he neglected to mention that’s a slower pace of export growth than
occurred generally: U.S. exports of goods and services to all regions grew 12 percent in 2008).3
Moreover, that modest growth obscures some loss in market share: Kirk pitched the TPP as a
way to halt the “significant decline in the U.S. share of key Asia-Pacific markets over the past
decade,” partly as a result of proliferating bilateral and regional agreements to which the United
States has not been a party. The idea, Kirk wrote, was to “reverse this trend and enhance
U.S. competitiveness and our share of job-creating economic opportunities in the
region.”4 A successful TPP that extends to all members the trade liberalizing parts of
individual agreements would indeed reduce distortions in the market caused by overlapping
tariff treatment and other trade regulations. Harmonizing so-called rules of origin, which
determine where a product originates for the purposes of applying duties—a complicated
exercise in this era of frequent transshipment—would be helpful to business by reducing
transactions costs. That would be especially beneficial in Asia, an important hub for global
supply chains. Beyond harmonizing existing provisions and rules, the TPP could liberalize trade
even further for all signatories and improve on the trade relationships already established.
These opportunities, however, must be weighed against the real prospect of backsliding if
existing agreements within the TPP are re-opened, for example, by inserting labor and
environmental standards.
Trade good
2ac trade prevents war
Prefer our evidence – prior trade studies are limited to bilateral trade – multilateral
trade eliminates conflict
Kinne, 12 - assistant Professor of Political Science, School of Economic, Political, and Policy Sciences, The
University of Texas at Dallas (Brandon, “Multilateral Trade and Militarized Conflict: Centrality, Openness,
and Asymmetry in the Global Trade Network” The Journal of Politics, January, doi:
10.1017/S002238161100137X )
The relationship between trade and militarized interstate conflict continues to receive a great deal of
attention.1 Most of this attention focuses on dyadic or bilateral interdependence—that is, trade
between discrete pairs of states.2 Much less attention has been paid to the effects of multilateral trade,
despite the fact that neither supporters nor critics of trade limit their arguments to dyads. Indeed,
dyadic interdependence provides little information about the integration of states into global markets. A
pair of states might, for example, trade heavily with one another but lack trade ties to the rest of the
system. Analysis of multilateral trade allows us to determine whether integration ultimately constrains
or empowers states in their political relations, thus addressing an enduring puzzle: does trade
integration reduce the incentive to engage in militarized conflict?
There are two general perspectives on this question. The first asserts that as states integrate into the
international trade network, they grow increasingly dependent on the stability of global markets.
Disruptive events like militarized conflict generate economically damaging negative externalities. Trade
integration thus inhibits uses of force either by increasing the opportunity costs of conflict or by acting
as a signaling mechanism for highly resolved states. A second, more critical perspective argues that
integration, especially when based on asymmetric trade relations, reduces dependence on any one
trade partner and creates opportunities for diversion to alternative import and export markets, thus
increasing political autonomy. In this case, integration actually reduces the costliness of militarized force
and emboldens states, encouraging conflict.
Common methods of measuring multilateral trade, such as trade openness, do not capture the complex
interdependencies that affect conflict behavior. I instead develop a social networks approach to trade,
focusing specifically on the concept of network centrality. Centrality is often associated with power or
prestige, but, depending on the substance of the network, it can also indicate sensitivity or vulnerability.
The measure of centrality used here simultaneously captures three essential facets of trade integration:
(1) the breadth of states’ trade ties; (2) the strength or depth of trade ties; and (3) the “commercial
distance” between states that lack direct trade ties.
I find that trade network centrality unilaterally constrains conflict behavior; the more central a state, the
less likely it is to initiate conflict. Trade openness, in contrast, has no effect. I also find that asymmetric
trade correlates strongly with centrality. Consequently, when states accrue asymmetric trade ties,
rather than being emboldened by their increased political autonomy, they are instead constrained by
their increased centrality. I find no evidence that asymmetry increases conflict. The results are
extremely robust to alternative model specifications.
Multilateral trade integration substantially decreases the risk of war
Kinne, 12 - assistant Professor of Political Science, School of Economic, Political, and Policy Sciences, The
University of Texas at Dallas (Brandon, “Multilateral Trade and Militarized Conflict: Centrality, Openness,
and Asymmetry in the Global Trade Network” The Journal of Politics, January, doi:
10.1017/S002238161100137X )
I find strong evidence that trade integration, when defined and measured in terms of network centrality,
substantially reduces a state’s likelihood of initiating militarized disputes. Trade openness, on the other
hand, despite its popularity in the literature, is a poor conceptual fit for interstate conflict and,
unsurprisingly, yields insignificant estimates. I find no support for the hypothesis that trade integration
increases the probability of conflict. Even when operationalized in terms of asymmetric relations,
integration never positively correlates with conflict. Indeed, the results suggest that cultivation of
asymmetric trade ties often has the effect of increasing a state’s centrality in the trade network; in turn,
this increased centrality constrains conflict behavior, despite the asymmetries of trade. This finding
suggests that even if strategically minded states attempt to cultivate asymmetric trade ties as a means
of boosting political autonomy, they will in fact be constrained, perhaps unexpectedly, by their
increasingly central position in the trade network.
In addition to contributing to the long-standing debate on the relationship between trade and conflict,
this article offers an important new approach to theorizing and measuring multilateral influences. More
generally, this approach shows how network analytics can be brought to bear on controversial and longstanding research questions in international relations. This is a promising development; as HafnerBurton, Kahler, and Montgomery (2009) note, network analysis too often proceeds atheoretically,
incorporating network measures into regression models without probing their causal logics or explicitly
connecting them to broader international relations literatures. This paper instead applies network
analysis to a research question that is highly salient and hotly debated, showing that this approach can
provide novel answers to enduring questions without ignoring or altering the fundamental issues at
stake.
Multilateral trades puts an impact cap on all wars
Martin et al 6 - Philippe Martin university of Paris 1 Pantheon-Sorbonne (CES), PSE and CEPR, Thierry
Mayer, University of Paris-Sud, CEPII, PSE and CEPR, mathias Thoenig, University of Geneva, PSE and
CEPR, (“make trade not war”, April 12, 2006, http://www.ecore.be/Papers/1177063947.pdf)//acjs
Our paper is the first, to our knowledge, to highlight the opposite effects of bilateral and multilateral
trade on the probability of war and to base the empirical analysis on testable predictions generated by a
theoretical model. Our results are somewhat ambivalent on the impact of trade and more generally of
globalization on the prevalence and the nature of war. We have shown that even in a model where trade
increases welfare and war is Pareto dominated by peace, higher trade flows may not lead to peace. The
intuition that trade promotes peace is only partially right: bilateral trade, because it increases the
opportunity cost of bilateral war indeed deters bilateral war. However, multilateral trade openness,
because it reduces the opportunity cost of going to war with any given country, increases the probability
of war between any given pair of country. Trade globalization also affects the nature of war: multilateral
trade openness increases the probability of local wars and deters global conflicts. This last point is
important: our paper should not be interpreted as suggesting that trade globalization leads to war.
Given that World Wars are certainly the most costly in terms of human welfare, this is not a small
achievement. We interpret more our paper as a word of caution and a possible explanation of the
changing nature of wars. Our model suggests a way through which multilateral trade openness and
globalization could become conducive to peace at the local level. Remember that the condition under
which multilateral trade increases the probability of war is that the increase in multilateral trade costs
following a war is small. Our empirical analysis confirms this is the case. However, if countries in bilateral
war were to suffer large multilateral trade losses, for example through multilateral trade sanctions
imposed by an international organization, then multilateral trade would become a deterrent to local
wars. A second possible implication is that local trade integration should be encouraged by international
organizations. Various extensions are possible on the impact of globalization on information flows and
through this channel on the probability of war. A recent literature in trade (see Rauch 1999) has argued
both theoretically and empirically that trade in differentiated products (as opposed to homogenous
products traded anonymously) should generate more interactions between traders and therefore more
information flows. Hence, we could more precisely test the impact of trade on war through the
information channel by following Rauch distinction between differentiated and homogenous products.
Another possible extension is to focus on the impact of regional trade agreements on the probability of
war and in particular to better understand which features of trade agreements are peace-promoting.
This could provide an assessment of whether regional free trade, allowing for an increase in regional
trade, is enough to augment peace prospects, or whether countries should be tied further by
institutional and political ties.
Protectionism risks nuclear war
Fouda, 12 - a Student at Shanghai Maritime University in Shanghai, China. She is from Cameroon, and
studies in the Department of Logistics Management (Regine, “Protectionism and Free Trade: A Country‘s
Glory or Doom?” International Journal of Trade, Economics and Finance, Vol. 3, No. 5, October 2012,
http://www.ijtef.org/papers/226-CF312.pdf)
My point of view, as a freshman economist is to try to understand the degree in which countries have
suffered or gained out of these two principles. In spite of evidence of damage caused by trade
restrictions, pressure for more "protectionist" laws persists. Who is behind this, and why? Those who
gain from "protectionist" laws are special-interest groups, such as some big corporations, unions, and
farmers' groups – all of whom would like to get away with charging higher prices and getting higher
wages than they could expect in a free marketplace. These special interests have the money and
political clout for influencing politicians to pass laws favorable to them. Politicians in turn play on the
fears of uninformed voters to rally support for these laws. Who are therefore the losers in this
international game? YOU and all other ordinary consumers. Your freedom is being trampled into the
dust by these laws, and you are literally being robbed, through taxes and higher prices, in order to line
the pockets of a few politically-privileged "fat cats." This situation made it clear to economist‘s mind that
some are favored while others…also "Protectionism is a misnomer. The only people protected by tariffs,
quotas and trade restrictions are those engaged in uneconomic and wasteful activity. Free trade is the
only philosophy compatible with international peace and prosperity." by Walter Block [12] (Senior
Economist, Fraser Institute, Canada). Moreover, another great economist pointed out the fact that, the
world enjoyed its greatest economic growth during the relatively free trade period of 1945-1970, a
period that also saw no major wars. Yet we again see trade barriers being raised around the world by
short-sighted politicians. Will the world again end up in a shooting war as a result of these economicallyderanged policies? Can we afford to allow this to happen in the nuclear age? Well, I think not
really…because I suppose there is still much to cover, for this better world we‘re all fighting for. Another
great economist pointed out the fact that, the economic war fought in our world today is due to a huge
variety of economic philosophy of nationalism, as quoted below. "What generates war is the economic
philosophy of nationalism: embargoes, trade and foreign exchange controls, monetary devaluation, etc.
The philosophy of protectionism is a philosophy of war.” Ludwig Von Mises (Great Economist).
AT: World War 1 disproves
World War 1 proves nothing
Weede, 10 – professor of sociology at the University of Bonn (Erich, “The Capitalist Peace and the Rise
of China: Establishing Global Harmony by Economic Interdependence” International Interactions:
Empirical and Theoretical Research in International Relations, DOI:10.1080/03050621003785181)
The occurrence of World War I is the standard argument against peace by trade or economic
interdependence because there was substantial economic interdependence between the Western
powers and the Central European powers. Certainly, World War I serves as a useful reminder that
commerce makes war less likely without making it impossible. But World War I is not as much of a
problem for capitalist peace theory as frequently assumed. Moreover, there was no democratic
contribution to pacification because the Central European powers were, at best, imperfect democracies.
By contemporary standards, even the democratic character of the United Kingdom was not beyond
suspicion because of franchise limitations. As far as trade linkages were concerned they were strongest
where least needed—between Britain and France, between Britain and the United States, between
Germany and Austria-Hungary. These pairs ended up on the same side in the war. Whereas strong trade
links between Germany on the one hand and Britain or Russia on the other hand did not prevent them
from fighting each other, Germany and France exemplify weak trade ties where strong ties were needed
most in order to avoid hostilities (Russett and Oneal 2001:175).
Skeptics rightly observe that increasing trade did not prevent World War I, but they overlook that trade
volumes rose not because of free trade policies, but in spite of mounting protectionism . Trade
increased because of falling transportation costs, but in spite of protectionist policies. Finally, capitalist
or commercial peace theory is an admittedly incomplete theory. It says only how risks of war may be
reduced but it says nothing about what generates them in the first place. But commercial peace theory
is certainly compatible with World War II, which was even bloodier than the previous world war as well
as with the later reconciliation between the former Axis powers and the West. There was little trade
between the Western powers and the Axis powers. Since the Axis powers were no democracies, the
democratic peace could also not apply between the Axis and the West.
2ac trade solves poverty
Free trade decreases poverty - prefer our evidence – it’s reverse-causal, their authors
ignore statistics, and don’t assume other causes for poverty – this is Latin America
specific
Ganuza et al 5 (Enrique, resident representative of the United Nations in Santiago de Chile and was chief
economist for Latin America and the Caribbean of the United Nations Development Program (UNDP) at
the initiation of the project leading to the present publication, “Are Export Promotion and Trade
Liberalization Good for Latin America’s Poor?,” May 2005,
http://www.oas.org/udse/english/documentos/IIgrupostrabajo/Chapt3Ganuza.pdf)//acjs ECLAC =
Economic Commission on Latin America and the Caribbean
We have used
the ECLAC estimations on household data to preserve comparability. ECLAC uses poverty lines that
reflect the cost of a market purchased basket of necessities and they make a correction for
underreporting of survey-based incomes and for income in kind, which was generally not done by our
country authors. For these reasons the country level estimates shown in Annex Table A3.4 may differ from the poverty estimates in the
It is useful to begin the discussion of poverty and inequality with an overview of observed trends in those two variables.
country papers. That is of less concern to us here because what we want to determine are the trends in poverty over the 1990s rather than
the levels of poverty. For that the estimates shown in the table are useful. For the region as a whole the total and extreme poverty incidence
are presented in Table 5 for the period 1980-1999, including estimations for 2002.23 Overall, both in absolute and in relative terms, total
poverty and extreme poverty worsened between 1980 and 1990.and then improved somewhat in the period before 1997. But even in the
early 1990s the numbers in poverty continued to increase even though there was a decline in the headcount ratio. The table also suggests that
after 1997 there was no further progress in reducing either poverty or indigence. Reducing current extreme poverty rates by half toward 2015
has been defined as the central objective of the United Nation’s Millennium declaration. Reaching this goal will require a major effort for many
countries in the region (UNDP, ECLAC, IPEA, 2003). The region totals for the 1990s shown in Table 5 hide a great deal of heterogeneity among
the different countries (see Annex Table A3.4). Brazil, Chile, Costa Rica, Guatemala, Panama and Uruguay all made significant progress in
poverty reduction, particularly between 1990 and 1997, while Argentina, Paraguay, Ecuador, and Venezuela had large increases in poverty
particularly after 1997. Because of its size, Brazil’s good performance makes the performance for the region seem better than it for most of
the other countries. Between 1990 and 1999 Brazil cut its indigent population by 13 million people. Indigence in the rest of Latin America rose
by nine million. Thus for most countries observed trends in poverty followed the performance of the economy. Countries in crisis after 1997
such as Argentina, Ecuador, Paraguay and Uruguay of Mexico in 1995-96 had big increases in poverty whereas poverty fell rapidly in countries
growing rapidly like Chile, the Dominican Republic and Mexico after 1996. The region did not manage to decrease inequality in per capita
household income distribution during the 1990s, with the sub-continent remaining the world’s most unequal area (ECLAC, 2002). Measuring
inequality by the Gini coefficient, the available evidence shows that inequality increased further in at least 11 out of 18 countries between
1990 and 1999 (see Annex Table A3.4). Two countries (Honduras and Uruguay) show decreasing inequality, while it is unchanged in four
countries (Chile, Guatemala, Nicaragua and Panama). 4.2 Effects of export-led economic strategies on poverty and inequality We have seen
what happened to output, employment, and earnings differentials in the simulations reported in Section 3. What we now want to know is what
these changes might mean for poverty and the distribution of income at the household level. As explained in Section 2, we do this by taking
the CGE model simulation outcomes and applying these through the microsimulation approach as counterfactuals to the observed labor
market parameters using the full distribution as given by household surveys of each country case. We report the comparative results of the
microsimulations in two ways. First, the final two columns of Table 4 above report the poverty and income inequality effects as percentage
changes from the base for each of the policy simulations using the countryspecific closures for the CGE models. Second, since the absolute
changes in policy variables and the distribution of income differ across countries we also report the changes as elasticities, defined as the
percentage change in poverty or inequality per percent change in a policy variable.
To make the changes easier to visualize,
for each policy simulation we have transferred the elasticities into four quadrant diagrams, and we have
calculated the elasticity for both earned income and household income per capita (see Figures 4 and 5). The
diagrams put poverty on the vertical axis and the Gini coefficient of per capita household income on the horizontal axis. Thus poverty increases
in the two top quadrants, and inequality increases in the two right hand quadrants of each diagram. Poverty effects of trade liberalization
Unilateral trade
liberalization reduces poverty and raising tariffs increases it. There is only one pointsource natural resource abundant country where that is not the case (Ecuador) and even in this case the
increase in poverty is small as a consequence of a unilateral tariff cut. More generally, the poverty effects are not
very big. Income inequality at the household level rises (slightly) in most natural resource abundant economies as predicted (Argentina,
Bolivia, Costa Rica, Ecuador, and Peru), though Venezuela provides an exception to this rule. The small effects on poverty and inequality
should not be surprising, as under this scenario we are cutting tariffs further from already low, post-reform levels. A
key conclusion is
though, that pre-reform counterfactual (raising tariffs) would enhance poverty suggesting that trade
liberalization is indeed poverty-reducing. These results are broadly consistent with moving to
completely free trade under the WTO or to a region-wide multilateral trade agreement under FTAA.
Both of these changes also reduce poverty and inequality in most of the countries. However, poverty rises
(modestly) under these scenarios in Costa Rica (only WTO), Ecuador, Paraguay, and Venezuela, mainly due to the negative effects on the
agricultural sectors in these countries which is not sufficiently picked up with employment and income growth in other sectors. Across-theboard increases in export subsidies are generally poverty reducing as well (in apparent contradiction with the WTO scenario), with a few
exceptions. Under this scenario export production is stimulated in a broad sense and given the smalleconomy assumption is assumed not to
affect world prices. In this sense it works alike a tariff cut stimulating aggregate employment as mostly more labor-intensive (e.g. agriculture)
sectors benefit from subsidies that are increased in the scenario. These results have to be interpreted with some caution though. These are
general equilibrium, comparative static results that do not take into account the costs of adjusting to a changed production structure. If the
exchange rate is fixed, the
simulation determines the impact of lowering the tariff rates and bringing in more
foreign capital to permanently finance a bigger balance of payments deficit. In the previous section we saw that
this change is expansionary (though growth is led by non-traded goods rather than exports). If foreign saving is fixed, the
exchange rate has to depreciate to allow exports to expand enough to pay for additional imports. But
total output and employment increase in both cases and poverty declines. The simulation results also
suggest that if no poverty reduction was observed in practice after trade liberalization, it is either
because a lot of other poverty-increasing factors were changing at the same time (most typically
dealing with macro shocks; see Taylor and Vos 2002) or because the economies are still in the process
of adapting their production structures. Poverty and external balance shifts As we saw in the previous section devaluation is
contractionary and an increase in foreign saving is expansionary. These changes have the expected effects on poverty. Devaluation increases
poverty, in some cases by quite large amounts and foreign saving reduces it. It is also clear that devaluation increases income inequality.
Curiously enough however it does not increase earnings inequality. That suggests that traded goods are in most countries are not skill
intensive. Thus while total output and employment go down with a devaluation (or a fall in foreign saving), for those who keep their jobs
Far and away the largest amount of poverty reduction comes from
increasing productivity. That is true whether the change is measured in absolute amounts or in
elasticities. In most cases increasing productivity also reduces inequality. This quite clearly underlines the obvious
skillintensity falls. Productivity increases
and important role that economic growth plays in poverty reduction. Labor market adjustment and poverty impact As explained above, the
study assumed that the labor markets are the main transmission channel of the impact of trade reforms on poverty and distribution. The effect
of alteration of parameters of the labor market structure on poverty and inequality was analyzed in the country cases and is summarized in
Annex Table A3.5. This table indicates, for each country, the labor market parameter which shows the largest change, in absolute terms, when
explaining total changes in poverty and inequality for different simulations. The following stylized facts can be observed: • Mean wage (and
other labor-earnings) adjustments (W1 as defined in section 2.4) tend to have the largest effect on the poverty incidence in most simulations.
• Changes in the remuneration structure (W2) are also the most important variable explaining absolute changes in income inequality at the
household level (rather than quantity shifts in the employment structure or reductions in unemployment) in most country cases.
Unsurprisingly, this also applies to the simulated effects on the Gini coefficient of labor income inequality for the full distribution. • Quantity
adjustment in the form of a falling rate of unemployment are key in explaining poverty reduction under trade liberalization in a few cases, most
notoriously Brazil and Peru, as well as in Cuba and Venezuela in the FTAA scenario. 5. Conclusions The purpose of this project was to
determine the impact of trade liberalization, external shocks and domestic policy responses on output, employment, poverty and the
distribution of income. We
found that trade liberalization increased output in almost every country in our
sample. It also increased either wages or employment depending on the closure used in the countryspecific models. Consistent with this, poverty declined in all but one country in the unilateral trade
liberalization scenario. Rising labor inequality, particularly between skilled and unskilled workers, emerges in the larger
number of cases, but does not necessarily translate into more inequality in per capita household incomes
because of offsetting positive employment effects. These results are very different from the historical
experience of most Latin American countries in the period after trade liberalization. This is partly due to
the many other disturbances that affected the region during the period and partly because ours are
comparative static equilibrium results that say nothing at all about the adjustment period during which
the economy adjusts to changes in tariff protection. Two alternative trade liberalization scenarios, WTO
and FTAA have exactly the same positive effects on output, employment and poverty as a uniform and
unilateral tariff reduction case in most countries. In contrast, devaluation as an isolated policy measure is contractionary
according to our results. It causes a decline in output and employment almost everywhere and an increase in poverty. The opposite is true for
an increase in foreign borrowing. In both cases the simulation assumes a permanent change in the exchange rate or the inflow of foreign
saving which is very different than the short run effect of devaluation on an economy out of equilibrium and in either a recession or a balance
of payments crisis. The model results also do not consider likely negative effects of increased debt servicing following an increase in foreign
borrowing neither do they take account of the possibility of emerging debt-solvency constraints. Subsidizing exports is expansionary in all but
Brazil and Argentina (for the fixed exchange rate closure). Employment increases and poverty declines in most cases.
Skilldifferentials however rise in some countries and fall in others. Thus one cannot say that choosing a more export-led growth strategy will in
general favor either the skilled or the unskilled. This depends on the export structure of individual countries. In terms of results on poverty,
the analysis confirms the main results of the macro CGE simulations showed under Section 3. Policy
measures with
contractionary effects on the level of economic activity have negative results on poverty, leading to
increased poverty incidence in most of the countries. This is the case for nominal devaluation and
increase in tariffs. On the other hand, tariff reductions, productivity increases, and trade and integration
agreements in line with FTAA and WTO have positive effects on the level of economic activity and
contribute to reduce the poverty incidence in a majority of the countries. If labor market parameters are crucial to
explain poverty and inequality variations, and most of the evidence point in that direction, wages levels and relative wage structures seem to
explain most of the variations in those welfare outcomes. Aggregate employment changes as a consequence of trade reforms are mostly not
big enough to exercise a significant impact on poverty and inequality. In sum, export-led economic strategies have not been the panacea for
welfare improvements, in the form of poverty and inequality reduction, many of its supporters expected when advocating these policy
choices. But they have not been the devil its detractors predicted either. To
reduce poverty and inequality from the severe
levels most of the countries of the region are showing at the beginning of the new century may require
policy mixes far more complicated and tailored to country specificities than the Washington medicine
predicted a decade ago.
Zero evidence supports the trade-poverty connection – their evidence is correlation,
not causation, and controlling for non-trade variables disproves it
Teson, 12 – Tobias Simon Eminent Scholar at Florida State University College of Law; former career
diplomat for the Argentine Foreign Ministry (Fernando, WHY FREE TRADE IS REQUIRED BY JUSTICE,
Social Philosophy & Policy29.1 (Jan 2012): 126-153, proquest)
The theoretical prediction is that freer trade causes global and national growth in aggregate terms.
Critics of free trade have long argued that the beneficial aggregate effect of trade is consistent with the
bad effect of leaving the poor out, as it is possible that the gains of trade fall on the rich or the middle
class of both trading partners.16 Nations must be disaggregated to find out who wins and who loses
with open trade. On this view, when we take persons or families as units, free trade may well lead to
losses for the poor.17
This objection finds no support in theory or evidence.18 An analysis of the effect of trade on poverty
centers on a simple two-step argument: trade enhances growth, and growth reduces poverty.19 Even if
openness to trade at first blush does not help the poor more than it helps others, why assume that the
poor will end up worse off than before? When a country grows, good things happen. More industries
are created, more jobs are available, and so the opportunities for the poor expand. Further, when a
country grows, so do societal resources that can be used to alleviate poverty. The more resources a
country has, the more resources the government will have. And the more resources the government will
have, the more effectively it will address the country's poverty. So whether a country's economic
policies are laissez-faire or redistributive, the poor will benefit from access to global markets as
producers and consumers.
In general, empirical studies have found that "in most cases, trade reform increases the income of the
poor as a group and that the transition costs are generally relatively small relative to the overall
benefits.â[euro]20 However, a country may liberalize trade yet simultaneously pursue policies that are
counterproductive for either growth or wealth distribution. This conflict of forces occurred in Argentina,
where the liberalizing measures of the 1990s were accompanied by massive unproductive public
spending and political corruption. 21 Under those circumstances, it is of course fallacious to attribute
the cause of the country's collapse (and the corresponding increase in poverty) to trade liberalization. It
is therefore crucial to control for non-trade variables when assessing the effects of trade on the poor.
Specialists recommend that governments accompany the country's adaptation to the law of
comparative advantages, for example, by easing industrial adjustment or helping the country diversify
its exports, always in the light of its comparative advantages. 22
But even if the gains from trade were partially skewed against the poor, trade would still be beneficial.
For consider: The main goal of development policy is to get poor countries to develop, even prior to
computing distributional effects. So it is a bit strange for trade skeptics to reject a practice that
concededly makes a poor country grow by saying: "no, not that kind of growth.â[euro] At the very least,
they should welcome free trade and then propose measures to correct the undesirable distributional
effects.
To be sure, trade liberalization will produce winners and losers, and many of those losers will be poor.
But my claim here is not that each poor person will improve as a result of trade liberalization; in fact, no
policy can do that. The claim is that, in virtually every instance, the poor as a class will improve. On the
issue of cost of goods, trade liberalization will help the poor in the same way it helps all consumers: by
lowering prices of imports and keeping the prices of substitutes for imported goods low, thus increasing
people's real incomes. On the question of wages, the evidence seems to show a number of things. Labor
markets need flexibility to adjust to comparative advantages. If firms are too constrained by labor laws
from reducing their work forces, then the poor may suffer as a result. This is ironic, given that
supporters of strict labor regulations claim to act on behalf of the poor.23 Also, the gap between the
wages of skilled and unskilled workers may increase, but this is hardly an objection to the claim that the
poor as a class benefit from trade liberalization. The objection that liberalizing trade will reduce
government revenues, and thus its ability to fight poverty, is also misplaced because it ignores the
dynamic effects of trade liberalization. If trade liberalization produces growth, taxable incomes will grow
as well, and government revenues will grow with them. And independently of whether the poor are able
to export (that is, independently of whether or not foreign markets are open to the goods they
produce), the poor benefit from having a wider variety of available goods to consume, either because
the imported product is not available domestically or because trade lowers the price of the product,
bringing it within the reach of the poor.
Free trade on balance is key to reducing poverty – high Latin American poverty rates
have their roots in nationalist economic policies from the 60s
Teson, 12 – Tobias Simon Eminent Scholar at Florida State University College of Law; former career
diplomat for the Argentine Foreign Ministry (Fernando, WHY FREE TRADE IS REQUIRED BY JUSTICE,
Social Philosophy & Policy29.1 (Jan 2012): 126-153, proquest)
Some people who criticize protectionism by rich countries are nonetheless reluctant to condemn
protectionism by developing countries. This is a mistake. The arguments against protectionist laws apply
equally to developing nations. Powerful local monopolies enlist the government in protecting them
against foreign competition, thus hampering economic growth and perpetuating economic stagnation.
The debate, once again, suffers from a fatal rhetorical glitch caused by the public's failure to understand
the economics of trade.
Critics of rich-country protectionist barriers correctly see that those barriers hurt producers in
developing nations, thus hampering those nations' growth. But they do not believe that poor-country
protectionist laws will hurt producers in rich countries much, and even if they did, it wouldn't matter
much from the standpoint of global justice, since the critics' moral concern is to alleviate the plight of
the world's poor. Protectionism in developing countries, they claim, is at worst morally neutral because
it doesn't harm foreign persons in a way that global justice should care: producers in rich countries have
vast markets at their disposal, in particular their own wealthy domestic markets. In fact, some have gone
further and insisted that protectionism by developing countries benefits those countries. This approach
enjoyed considerable vogue during the 60s and 70s mainly as a result of the promotion by the United
Nations Economic Commission for Latin America and the Caribbean (CEPAL, an acronym of the Spanish
name.) It recommended a nationalist economic policy based on import substitution and massive public
spending as prescriptions for growth and development. This policy ("Cepalismâ[euro]) was implemented
in Latin America and Africa with disastrous results . 40 Vastly discredited today, this theory is still
sporadically invoked by populist demagogues to justify nationalist policies.41
The view that protectionism by poor countries is benign ignores the central premise of international
economics, which bears repetition: the government that erects trade barriers hurts its own citizens.
Protectionism is self-destructive. In developing countries, the problem is not that these laws hurt
producers in rich countries, but rather that they prey on domestic consumers in two ways. First, those
laws force them to forego the economic choices generated by international trade; second, they abort
the creations of new industries by redirecting resources toward inefficient activities. As I indicated, this
harm is opaque. Tragically, the unemployed person in my native Buenos Aires cannot see that a main
reason for his predicament is that inefficient producers and their powerful unionized workers have
successfully lobbied the Argentine government to get protection against foreign competition. In this
way, the labor unions have improved their situation vis-à-vis our unemployed person, because the latter
now will not be employed by an industry that was aborted by the perverse incentives created by
protectionist laws. Because understanding this requires, not only knowing the complex and counterintuitive law of comparative advantages, but also positing a counterfactual that is itself hard to grasp,
the victim of this governmental depredation does not see himself as such and, sadly, continues to
support the populist demagogues in the hope that he, too, will benefit from some subsidy or other. A
society of producers, sadly, has become a society of beggars.
When we think about who benefits from these laws in developing nations, we realize that the
redistribution of wealth resulting from protectionist laws cannot possibly be supported by moral
reasons. The crude reality is that more often than not the industries that benefit are close allies of the
regime in place. In exchange for protection those industries consolidate the rulers' power by helping
them win elections or enabling them to persist in their undemocratic ways. But even ignoring this
political reality, even assuming that trade protection is not a corrupt deal between government and
industry, the redistribution of resources is a reverse subsidy in favor of the better-off members of
society. This occurs in two ways. First, the owners and workers of protected industries benefit at the
expense both of local consumers (who, remember, in these nations are overwhelmingly the poor ).
Second, the protectionist laws abort the creation of new, efficient industries, thus hurting those persons
who would have been hired in those industries but is now unemployed. No political theory I know of can
justify these transfers.
A final point. It is no mere coincidence that, with some exceptions, the wealthier countries have less
trade barriers than the developing countries. If protectionist barriers were so good for developing
nations we should see some evidence of this in the numbers. Not so. Nations who defeated poverty did
so mostly by establishing market-friendly institutions and fixing their non-economic institutions, such as
the judiciary. Trade openness is a component of economic openness, and the correlation between
market-friendly institutions and economic prosperity is undeniable.
Free trade is the best remedy for structural violence – protectionism is ethically
indefensible
Teson, 12 – Tobias Simon Eminent Scholar at Florida State University College of Law; former career
diplomat for the Argentine Foreign Ministry (Fernando, WHY FREE TRADE IS REQUIRED BY JUSTICE,
Social Philosophy & Policy29.1 (Jan 2012): 126-153, proquest)
With few exceptions, the literature on global justice has been indifferent or hostile to free trade. Yet
anyone who cares about justice should support free trade for empirical and moral reasons. The benefits
from trade to the poor are denied both by protectionist measures in developed countries and by local
monopolies and foreign interests allied with those in power in developing nations. Few things have done
as much to cause the economic stagnation in the developing world as the policies of import substitution
and similar protectionist devices (perhaps only political failure ranks higher in the list of such causes.)73
Trade barriers cannot possibly be justified by a theory of justice, domestic or international. Domestically,
trade barriers transfer resources from the worse-off (local consumers) to the better-off (workers and
owners of protected industries). Internationally, trade barriers in rich countries transfer resources from
poorer foreign producers and workers to richer local owners and workers. And this, assuming the best
scenario: More often, trade barriers allow governments to transfer resources in favor of rent-seekers
and other political parasites.
Developed countries deserve scorn for not opening their markets to products made by the world's poor
by protecting their inefficient industries, while ruling elites in developing nations deserve scorn for
allowing bad institutions, including misguided protectionism. International reform, then, should try to
create those effectively functioning institutions that best secure economic growth while helping the
poor. Because trade relies on mutual advantage and not on altruism, there is little doubt that liberalizing
global voluntary exchanges will go a long way toward that goal.
Critics of free trade simply do not believe that the poor can compete in world markets. They conjure up
the image of a poor and uneducated peasant immersed into a whirlwind of overwhelming economic
forces which he cannot possibly shape or control. Yet only by allowing this poor peasant to participate
freely in a global free market will he regain the freedoms he does not currently have: the freedoms to
produce, work, and trade at will. The evidence unequivocally shows that freeing world markets
improves the lives of millions of persons. Our poor peasant is the victim, not of free trade, but of one or
more of the following: oppressive political conditions, in particular denial of human rights; collusion of
the government with local monopolies or foreign producers; lack of protection of property and contract;
lack of labor mobility; and stifling cultural structures. These institutional failures cause poverty, not the
other way around.
The kritik is based on flawed logic – empirics proves that trade solves poverty
Koshy 7 – Robin Koshy is a trade economist based in London, (“Can multilateral trade work for the
poor?”, 2007, http://infochangeindia.org/trade-a-development/backgrounder/can-multilateral-tradework-for-the-poor/print.html)//acjs
Protectionism, self-reliance and village republics are not enough to lift 1.3 billion of the world’s poor
out of absolute poverty. There is sufficient empirical evidence to demonstrate that trade can be a
powerful catalyst for poverty reduction, that free trade with fairer policies will benefit the world's
poor more than aid or charity . The problem is that World Trade Organisation negotiations and global
trade are far from free and fair, with the balance skewed in favour of powerful trading blocs like the US
and EU and against poorer nations The recent collapse of the Doha Round of trade talks presents a
dilemma to both champions of free trade and opponents of free trade. For supporters of free trade and
multilateralism, the World Trade Organisation (WTO) provides the ideal framework for relatively
unrestricted movement of goods and services, which will free markets, strengthen competition, spur
innovation, and trigger growth and development around the world. Its apparent failure represents the
undoing of years of progressive global integration and the success of protectionist governments and farleft outfits. To them, any doubts cast over the efficacy of multilateralism in reducing poverty are
misplaced -- free trade will cure all! They fear that repairing faith in multilateralism will take years, and
alternatives such as Free Trade Agreements (FTAs), also known as Preferential Trading Agreements
(PTAs), are a poor second choice. For opponents of economic globalisation, the WTO is the epitome of
the West’s neo-colonial agenda, the greed of transnational corporations, and the perpetration of the
developing world’s economic dependence. To them, the WTO is the rich world’s negotiating range
where developing countries are enmeshed in unfair trade agreements that diminish the policy space for
national governments, open up domestic markets to the dumping of subsidised foreign goods and limit
the access of producers from developing countries to rich-country markets. The WTO represents a
growing web of binding agreements that threaten to stretch beyond regulating goods and services, to
controlling basic services and traditional knowledge. Opposing the WTO has served both as a rallying
point and a profession for thousands of campaigners and advocacy outfits in the North and South. Now
that the talks have actually stalled, most anti-WTO campaigners find themselves without a popular
battle cry or answers about the immediate future of world trade.
--XT – trade solves poverty
Trade liberalization is on balance better for the poor – protectionism is ethically
indefensible
Teson, 12 – Tobias Simon Eminent Scholar at Florida State University College of Law; former career
diplomat for the Argentine Foreign Ministry (Fernando, WHY FREE TRADE IS REQUIRED BY JUSTICE,
Social Philosophy & Policy29.1 (Jan 2012): 126-153, proquest)
In this essay I argue that free trade is required by justice. Protectionist laws are indefensible on two
grounds. First, they are indefensible in principle because they coercively redistribute resources in favor
of persons who are not deserving beneficiaries under any plausible theory of domestic or international
justice. Second, protectionist laws have objectionable consequences because they harm persons
generally (they cause more harm than good), and they particularly tend to harm the poor. Resting on a
robust consensus in the economic literature, I claim that liberalizing trade would contribute significantly
to global and national growth and, mainly for that reason, would help in reducing poverty. An important
corollary of my argument is that protectionist laws are indefensible, not just under a classical-liberal
view of politics, but under any plausible moral-political theory.
Protectionist laws assume various forms: tariffs, import licenses, export licenses, import quotas,
subsidies, government procurement rules, sanitary rules, voluntary export restraints, local content
requirements, national security requirements, and embargoes. All these trade barriers, while different in
a number of respects, have this in common: they raise the cost (sometimes prohibitively) of importing
goods and services. 1 Protectionist laws are artificial, coercive obstacles placed by governments on
voluntary transactions across borders. Citizens, and especially the poor, are doubly harmed by trade
barriers. On the one hand, protectionist barriers erected by governments of poor countries harm their
own people. Seen from this perspective, interference with trade is one more instance of the marketunfriendly policies that have caused much of the stagnation in the developing world.2 Protectionism in
developing countries goes hand in hand with unproductive public spending, corruption, ineffectual
regulations--all features of economically and socially burdened societies. But on the other hand, when
governments in rich countries enact protectionist laws, in addition to harming their own citizens, they
harm the world's poor by denying them access to wealthy markets. This is an injustice done by
governments of wealthy countries to the world's poor. This particular injustice is a harmful, coercive
interference with voluntary transactions--an unwarranted interference in the pursuit of personal
projects in order to benefit persons who, as I shall show, are not deserving beneficiaries.
Trade solves environment
Free trade solves back the environment
Ubben 2 (John R., “Trade Liberalization and Environmental Quality: Opposing Viewpoints, Additional
Issues, and the Necessity of Intervention,” 8/26/2,
http://business.uni.edu/economics/Themes/ubben.pdf)//acjs
Trade Liberalization Benefits the Environment How might trade liberalization help the environment? Trade liberalization can benefit
the environment in a number of ways. Free trade can promote the transfer of genetic material and
technology that can improve agricultural development and environmental protection in the form of a
reduction in chemical use. Trade liberalization can also help improve the efficiency of resource
allocation by removing inefficient prices and subsidies. Trade also encourages environmentally
sustainable use. Finally, trade can be argued to be a key factor in the increase in environmental
standards and increase the speed with which developing countries reach the environmental stage
because it serves to increase income [Brack, 1998, 1, 14]. In the area of biotechnology, the transfer of
biological pest controls, such as predator organisms and genetically developed crops resistant to disease
and insects, can reduce the dependence on chemicals. In agriculture, the transfer of farming practices
such as crop rotation and low till or no till farming, can be instrumental in developing sustainable
agriculture practices and reducing soil erosion in lesser-developed countries [Zilberman, 1992, 1145].
Trade liberalization may also serve to break down exchange rate policies that subsidize the importation
of chemicals. Hence, free trade could reduce chemical usage and lead to environmental improvement
[Antel, 1993, 784]. Trade liberalization can help improve resource allocation by removing inefficient prices. Trade liberalization
can improve resource allocation by allowing countries to specialize in the production of goods and
services in which they are most efficient. Efficiency allows a country to maximize its output for a given
level of resources. It can be argued that the efficient allocation of resources is a step toward
environmentally sustainable development [Brack, 1998, 1]. If an allocation is Pareto optimal, than there are no other allocation
of resources that could make one group better off without hurting any other group. As long as environmental quality is taken into
Trade can also
serve to increase environmental standards in the manufacturing sector. Companies who produce goods
for export face a number of different standards, some higher than others. It is simply easier and more
cost effective to produce products to meet the highest standards, so when the company looks to
expand into new markets it will have the advantage of already complying with standards regarding the
environment, labeling, safety, and many other factors [Brack, 1998, 14]. An increased rate of growth of income caused by
trade can help promote environmental quality. Increased income creates potential for investment in environmental
protection and may also speed up the transition from purely economic concerns to a balance of
environmental and economic growth for developing countries [Antel, 1993, 787]. However, this link is not automatic
consideration when resources are allocated, then, in theory, trade that promotes efficiency will benefit the environment.
and policies will need to be implemented to ensure environmental concerns are pursued simultaneously. “Poverty per se is a form of
environmental degradation and thus economic well-being is an environmental plus, regardless of its effect on pollution control or
environmental protection efforts” [GATT Secretariat, Esty, 1994, 64]. The study performed by Perroni and Wigle (1994) is most often
cited for the lack of impact trade restrictions, and therefore trade, have on the environment and the type of intervention most successful in
promoting environmental protection. The authors attempted
to assess international trade’s relationship to
environmental degradation by examining the effects on environmental quality and welfare of the
following
environmental policies: 1) Business as usual (current environmental protection levels). 2) A move to full global internalization meaning, that
the internalization rate for the domestic and international components of environmental externalities is 1 or 100%. 3) Unilateral domestic
environmental action by North America, meaning that the internalization rate for the domestic component of environmental externalities was
1 or 100% in North America. The authors also examined three trade-policy scenarios: 1) benchmark trade barriers; 2) a removal of all trade
barriers (free trade); 3) a three-fold increase in trade barriers (trade wars). Environmental damage was measured locally in terms of emissions
summed for all sectors in a region, and globally by summing all sectors in all regions. “The relationship between emissions experienced and
environmental damage is modeled by means of convex, constant elasticity damage function: D L (EL ) = kL (EL ) pl Where D = environmental
damage D G (EG ) = kG (EG ) pg E L & EG are the sum of net local and global emissions k L & kG are constants pl & pg represent elasticities of
damage with respect to emissions (assumed to be greater than 1)” [Perroni & Wigle, 1994, 552-558]. Environmental quality was then
modeled on the consumption side of the economy as the difference between endowments of environmental quality and damage. A utility
function described by consumption goods and environmental quality was used to measure individual valuations of environmental quality.
Environmental policies were described in the model using emission fees that internalized some or all of the external costs associated with
emissions. The revenue from these taxes went to the residents of the country where the emissions took place [Perroni & Wigle, 1994, 552558]. The primary factors of production and trade were labor and capital, which were modeled as domestically mobile but internationally
immobile. In the model, this prevented dirty industries from moving to regions with lower emission taxes.
Finally, six goods were chosen, representing both industries having high emission levels and those with low levels, as well as high technology
and low technology industries. These goods were also identified by their intensities related to labor, skills, capital, and environmental inputs.
Countries were then grouped together by their per capita income level and their environmental quality relative to one another [Perroni &
Wigle, 1994, 552-558]. By examining trade in these products, environmental damage caused by their production, and environmental policies
crossed against each trade-policy scenario, the researchers drew important conclusions on the relationship between trade and the
environment. At the benchmark level of the tradepolicy scenario, international trade had a small adverse affect on environmental quality. The
removal of all trade barriers resulted in a slight worsening of environmental quality, while a three-fold increase in trade barriers had only a
small positive impact on the environment [Perroni & Wigle, 1994, 561-562]. The welfare effect on different regions tells a much different story.
Trade liberalization had the greatest benefit for the U.S., Canada, and other developed countries, while the remaining regions saw small or no
gains. However, trade regulations/barriers had a substantial negative effect on welfare for all regions. Other results showed that all regions had
more than a 39% improvement in environmental quality when externalities were fully internalized regardless of the trade-policy scenario. On
the other hand, environmental quality improvements were never more than 2% when trade barriers were used to address environmental
issues. The conclusion is that the trade policies of different regions in the study
Trade key to leadership
US-led free trade in Latin America is vital to leadership in the region – it improves the economy,
fortifies democracy, and strengthens rule of law
Daremblum 9 - director of the Center for Latin American Studies at the Hudson Institute (Jaime, “Latin
America Needs Free Trade,” The American, 2/6/9, http://www.american.com/archive/2009/february2009/latin-america-needs-free-trade)//AC
While there is never a “good time” to start a trade war, the current moment is especially inconvenient.
Yet Congress seems intent to push through an economic stimulus package containing nakedly protectionist measures
that make a mockery of the U.S. commitment to free trade. The House-approved stimulus plan says that all public works
projects funded by the legislation must use U.S.-made iron and steel. The Senate bill has its own “Buy American” plank, which is even broader
than the House provision and would cover all manufactured goods used in stimulus-funded public works projects. On Wednesday, the Senate
voted to water down the “Buy American” clause by demanding that it be “applied in a manner consistent with U.S. obligations under
international agreements.” This was meant to assuage concerns raised by the Europeans and Canadians, not to mention those voiced by
President Barack Obama, who on Tuesday told Fox News that “we
can’t send a protectionist message” and also told ABC News
that “we need to make sure that any provisions that are in [the stimulus plan] are not going to trigger a
trade war.” Unfortunately, even in its revised form, the “Buy American” stipulation may still provoke retaliatory actions from U.S. trading
partners. “I would bet everything I have on a trade war breaking out within WTO-consistent rules,”
Columbia economist Jagdish Bhagwati told a reporter on Thursday. The “Buy American” language makes no economic
sense. As Gary Clyde Hufbauer and Jeffrey J. Schott of the Peterson Institute for International Economics have pointed out, it would do very
little to promote U.S. job creation. But if
other countries responded with protectionist moves of their own, that
could have a highly negative impact on U.S. jobs. “The negative job impact of foreign retaliation against Buy American
provisions could easily outweigh the positive effect of the measures on jobs in the U.S. iron and steel sector and other industries,” write
Hufbauer and Schott. “The difference is that jobs lost would be spread across the entire manufacturing sector, while jobs gained would be
concentrated in iron and steel and a few other industries.” However the “Buy American” debate turns out, one hopes that it does not signal a
U.S. retreat from free trade and globalization. At a time of economic crisis at home and abroad, a
trade war could have disastrous
consequences. That’s what happened during the 1930s, when America’s Smoot-Hawley Tariff Act—
passed by Congress and signed by President Herbert Hoover in 1930—unleashed a flurry of
protectionism around the globe and exacerbated the Great Depression. The Democratic Congress has close ties with
organized labor and is heavily protectionist in its attitudes. Indeed, one of President Obama’s biggest challenges will be
to uphold U.S. support for free trade despite resistance from his own party. Of course, that assumes Obama himself
is a free trader. During the campaign, he opposed bilateral free trade agreements (FTAs) with Colombia and Panama and called for
renegotiating NAFTA. In his first meeting with Mexican President Felipe Calderón, shortly before Inauguration Day, Obama expressed his desire
to “upgrade” NAFTA. The world is now waiting to see whether, as president, Obama will be more skeptical of trade liberalization than
Republican George W. Bush or Democrat Bill Clinton, the latter of whom championed NAFTA in the face of intense opposition from his fellow
Democrats in Congress. If
Obama wishes to maintain U.S. credibility and bolster America’s trade partnerships,
he cannot govern as a protectionist. His remarks on the stimulus package have been encouraging. But when push comes to shove,
will he risk angering Democratic lawmakers—and powerful Democratic constituencies—in order to defend free trade? The Europeans and
Canadians are eager to know. So are political and business leaders in Latin America. Free
trade is especially important to Latin
America. In countries throughout the region, U.S.-led trade liberalization has improved economic
opportunities, fortified market-oriented democracy, and strengthened the rule of law. At a time of major
economic turmoil, U.S. leadership on free trade is critical. Obama must provide it. He faces at least three big tests on
hemispheric trade: whether he will revisit NAFTA; whether he will endorse (and urge Congress to approve) the Colombia and Panama FTAs; and
whether he will pursue new FTAs with countries such as Brazil and Uruguay. The U.S.-Mexico relationship is fundamentally sound, so hopefully
any disagreements over NAFTA can be ironed out without upsetting the basic framework of bilateral trade. The Colombia and Panama deals
were both signed in late 2006; their approval by Congress is long overdue. Colombia is a key U.S. ally in South America whose government
deserves credit for reducing violence and working with the United States to curb drug production. Brazil and Uruguay are both members of
Mercosur, the South American trade bloc, which would complicate U.S. efforts to negotiate bilateral FTAs but not necessarily stymie them. In
2006, U.S. and Brazilian officials launched a new U.S.-Brazil Commercial Dialogue designed to enhance their bilateral trade relationship. Obama
should build on this dialogue and push for a formal FTA. (Admittedly, this would require both the United States and Brazil to make some tough
decisions on agriculture policy.) As for Uruguay, in 2007 U.S. and Uruguayan officials signed a Trade and Investment Framework Agreement,
which created a U.S.-Uruguay Council on Trade and Investment. Obama should use this as a launching pad to pursue FTA talks with
Montevideo. Whether or not the United States seeks to expand its trade relationships in the Western Hemisphere, China will seek to expand its
own. Beijing is moving rapidly to boost its economic links with Latin America. Meanwhile, Venezuelan strongman Hugo Chávez is
trying
to enlarge his anti-U.S. trade bloc, known as the Bolivarian Alternative for the Americas. If Washington
does not make hemispheric trade expansion a priority, it risks losing influence in the region . That
would be bad for the United States, and bad for Latin America.
Free trade in Latin America rejuvenates US credibility
CI 9 – Cato Institute (“Cato Handbook for Policymakers,” Cato Institute, 2009,
http://object.cato.org/sites/cato.org/files/serials/files/cato-handbook-policymakers/2009/9/hb11159.pdf)//AC
The divergence in performance between the two models in the region will become even clearer in the coming years. The United States
can continue to buttress that demonstration effect by ratifying the free trade agreements with Colombia
and Panama. Those free trade agreements would benefit the United States and its trade treaty partners,
and they would be yet another signal to the region that the United States is willing to reward countries
that implement free-market policies. Nowhere is that more important than in the case of Colombia. That country is properly
seen as the ideological opposite of Venezuela, successfully fighting the leftist FARC guerrillas on its own territory; aggressively pursuing free
trade with the United States; and denouncing the kinds of populist policies and belligerent foreign policy of its neighbor, Venezuela. Were the
United States to deny signing the free trade agreement with Colombia into law, it would not only be a blow to Colombia and Alvaro Uribe, who
enjoys the highest popularity ratings of any president in Latin America, it would also be seen throughout the region as a blow to all those in
Latin America who favor democratic capitalism. Washington
should likewise continue to pursue free trade with other
Latin American countries that have liberalized their economies and are eager to sign a trade treaty with
the United States. Independent of free trade negotiations, the United States should immediately reduce
its barriers to Latin America’s exports, especially textiles and agricultural products. At a time when U.S.
credibility is being questioned, such a move would restore some goodwill toward Washington and
might help persuade reluctant countries to reduce some of their own trade barriers. At the very least,
the United States could then not be blamed for hypocrisy, and the welfare of both the United States and
Latin America would improve. Such a unilateral policy of reducing trade barriers, moreover, would not
conflict with the goal of negotiating free trade agreements. As Cato Institute scholar Brink Lindsey points
out, the United States has regularly signed trade agreements affecting sectors of the U.S. economy that
enjoy virtually no protection. For countries that are interested in free trade with the United States, such
agreements offer the advantage of ‘‘locking in’’ free trade both at home and abroad. Indeed, the
certainty provided by free trade treaties is one of their greatest benefits and explains why they tend to
result in increases of both trade and investment.
Trade is moral
Free trade is justified and alternatives are morally bankrupt – 7 warrants
Griswold 2 - director of the Cato Institute's Center for Trade Policy Studies (Daniel, “Seven Moral
Arguments for Free Trade,” Cato Institute, May 1 2002,
http://www.cato.org/publications/commentary/seven-moral-arguments-free-trade ) //JG
U.S. trade policy is almost always debated in terms of economic utility. Does free trade raise or lower
incomes? Does it help or hurt U.S. industry? Does it create or destroy jobs? But behind the statistics and
anecdotes lie moral assumptions about human nature, the sovereignty of the individual, and the role of
government in a free society. Free trade may deliver the goods and boost efficiency, but is it morally
superior to protectionism? The Bush Administration is sending contradictory signals on the issue of free
trade. In March, President Bush announced measures to protect the U.S. steel industry from foreign
competition. In May he signed a farm bill that inflates subsidies for U.S. “agribusinesses” and distorts
global trade. But in a speech in May of last year before the Council of the Americas, President Bush
joined the moral debate, telling his audience, “Open trade is not just an economic opportunity, it is a
moral imperative. Trade creates jobs for the unemployed. When we negotiate for open markets, we are
providing new hope for the world’s poor. And when we promote open trade, we are promoting political
freedom. Societies that open to commerce across their borders will open to democracy within their
borders, not always immediately, and not always smoothly, but in good time.” Western moral thought
provides a solid foundation for pursuing a policy of economic openness. Drawing on that tradition, here
are seven moral arguments to support free trade among nations: 1. Free trade respects the dignity and
sovereignty of the individual . A man or woman engaged in honest work has a basic right to enjoy the
fruits of his or her labor. It is a violation of my right to property for the government to forbid me to
exchange what I produce for something produced by a fellow human being, whether the person I’m
trading with lives across town or across the ocean. Protectionism is a form of stealing, a violation of the
Eighth Commandment and other prohibitions against theft. It takes from one group of people, usually a
broad cross-section of consumers, and gives the spoils to a small group of producers whose only claim to
the money is that they would be worse off under open competition. Free trade meets the most
elementary test of justice, giving to each person sovereign control over that which is his own. As
Frederic Bastiat wrote in his 1849 essay, “Protectionism and Communism,” “Every citizen who has
produced or acquired a product should have the option of applying it immediately to his own use or of
transferring it to whoever on the face of the earth agrees to give him in exchange the object of his
desires. To deprive him of this option when he has committed no act contrary to public order and good
morals, and solely to satisfy the convenience of another citizen, is to legitimize an act of plunder and to
violate the law of justice.” 2. Free trade restrains the power of the state . Free trade is morally superior
to protectionism because it places trust in what Adam Smith called “the natural system of liberty” rather
than in a man-centered system of centralized industrial policy. And by doing so it allows citizens to fulfill
their creative and productive potential. There is no compelling moral reason why a small group of
politicians should decide what goods and services an individual can buy with his earnings based solely on
where those products are produced. By diffusing economic decision-making as broadly as possible, free
trade reduces the power of fallible and fallen people in high places to inflict damage on society. As
economists have been pointing out for two centuries now, the gains that protectionism confers on a
select group of producers and the government’s coffers are almost always outweighed by the losses
imposed on the mass of consumers. This dead-weight loss weakens the productive capacity of the
country as a whole compared to what it would be if its citizens were allowed to engage in free trade.
Producers who seek protection are not only robbing their fellow citizens of income and freedom of
choice; they are sapping the economic strength of their own society. Protectionists are prone to wrap
their agenda in words of patriotism and compassion, but their aim is self-centered and self-serving. 3.
Free trade encourages individuals to cultivate moral virtues . To be successful in a free and open
marketplace, producers must serve their fellow human beings by providing goods and services others
want and need. And the most economically successful will be those who provide not just for a select few
but for a broad segment of consumers. In the 1991 papal encyclical Centesimus Annus, Pope John Paul II
observed that a market system encourages the important virtues of “diligence, industriousness,
prudence in undertaking reasonable risks, reliability and fidelity in interpersonal relationships, as well as
courage in carrying out decisions which are difficult and painful but necessary.” On top of such character
traits, trade encourages good manners and the decent treatment of others. In the long run, trade
rewards those participants who act in a trustworthy manner. A supplier who misses deadlines for
shipment or a buyer whose credit is no good will soon lose business to their competitors with better
reputations. In other words, there is no inherent conflict between good business and good morals, and
in a free and open market under the rule of law the two complement each other. 4. Free trade brings
people together across distance and cultures . Trade opens the door for relationships that transcend
economic exchange. When nations trade with one another, more than material goods cross borders.
People and ideas inevitably follow through the same open doors. Fax machines, cellular telephones, and
the Internet are rapidly spreading as tools of international business, but they are also tools of friendship
and evangelism. At a Cato Policy forum in 1999, Ned Graham, son of Billy Graham and president of East
Gates International, spoke about the impact of expanding trade on his organization’s missionary work in
China: Ten years ago, there was almost no information-exchange technology available to the average
Chinese citizen. If we wanted to contact a friend in China, we usually had to do so by mail unless that
individual had a private phone, which was extremely rare in the inland provinces. Today, despite
difficulties, much of that has changed. We routinely communicate with thousands of friends all over
China via fax, cell phones, and email. The proliferation of information technology has allowed us to be
much more effective in developing and organizing our work in the PRC. Today more than 100 Western
missionary groups are either working or attempting to work openly in China to spread the faith. Since
1992, Ned Graham’s organization has legally distributed more than 2.5 million Bibles to non-registered
believers in China. This ministry would have been impossible without China’s economic opening to the
world that began 20 years ago and America’s ongoing policy response of engagement. More than 20
million Chinese are now on the Internet and that number has been growing exponentially. The number
of telephone lines and cell phones in China has grown more than ten-fold in the last decade. The works
of Friedrich Hayek, probably this century’s most influential defender of a free society, are now being
distributed legally on the Mainland. Free trade has brought new ideas and new relationships to China
and other previously closed societies. 5. Free trade encourages other basic human rights, such as
freedom of speech and religion . This is probably the most contentious of the seven reasons, and it goes
to the heart of the current debate about trade with China and the use of sanctions in the name of
human rights and democracy. By raising the general standard of living, free trade helps people achieve
higher levels of education and to gain access to alternative sources of information. It helps to create a
more independently minded middle class that can form the backbone of more representative kinds of
government. The wealth created from expanded trade can help to nurture and sustain civil institutions
that can offer ideas and influence outside of government. The emergence of civil liberties and more
representative government in countries such as Taiwan, South Korea, and Mexico can be credited in
large part to economic development spurred by free trade and market reforms. As a general rule,
nations that are more open economically tend to enjoy other liberties as well. In the last 25 years, as the
world has turned away from centralized economic controls and toward a more open global market,
political and civil freedoms have also spread. In 1975, only 42 countries in the world were classified by
the non-profit group Freedom House as being politically free, where citizens enjoy full civil and political
freedoms. Today the number has more than doubled to 85. The percentage of the world’s people
enjoying full civil and political freedom has also more than doubled during that time, from 18 percent to
40 percent. In his book, Business as a Calling, Michael Novak explains the linkage with what he calls “the
wedge theory”: Capitalist practices, runs the theory, bring contact with the ideas and practices of the
free societies, generate the economic growth that gives political confidence to a rising middle class, and
raise up successful business leaders who come to represent a political alternative to military or party
leaders. In short, capitalist firms wedge a democratic camel’s nose under the authoritarian tent.
Religiously motivated conservatives who want to impose sanctions against China would undermine
progress on human rights by removing one of the most positive influences in Chinese society. Granted,
the Chinese government today remains an oppressive dictatorship, a bad regime that jails its political
opponents and interferes in the private lives of its citizens. But for all its unforgivable faults, the Chinese
government today is not nearly as bad as the government was during the totalitarian rule of Mao Tsetung, when millions were killed and the entire social order was convulsed by the Great Leap Forward
and the Cultural Revolution. The people of China do not yet enjoy the range of political and civil rights
we do in the West, but they are freer and materially better off than they were three decades ago. For
that they can thank economic and trade liberalization. 6. Free trade fosters peace by raising the cost of
war. In an 1845 speech in the British House of Commons, Richard Cobden called free trade “that
advance which is calculated to knit nations more together in the bonds of peace by means of
commercial intercourse.” Free trade does not guarantee peace, but it does strengthen peace by raising
the cost of war to governments and their citizens. As nations become more integrated through
expanding markets, they have more to lose should trade be disrupted. In recent years, the twin trends of
globalization and democratization have produced their own “peace dividend”: since 1987, real spending
on armaments throughout the world has dropped by more than one-third. Since the end of the Cold
War, the threat of major international wars has receded. Those nations most closely associated with
international terrorism — Libya, Sudan, Syria, Iraq, Iran, Afghanistan, and North Korea — are among the
least globalized countries in the world in terms of non-oil trade and foreign investment. Not one of them
belongs to the World Trade Organization. During the 1930s, the industrialized nations waged trade wars
against each other. They raised tariffs and imposed quotas in order to protect domestic industry. The
result, however, was that other nations only raised their barriers even further, choking off global trade
and deepening and prolonging the global economic depression. Those dark economic times contributed
to the conflict that became World War II. America’s post-war policy of encouraging free trade through
multilateral trade agreements was aimed at promoting peace as much as it was prosperity. 7. Free
trade feeds and clothes the poor. Free trade and free markets empower poor people by giving them
greater opportunity to create wealth and support their families. By dispersing economic power more
widely, free trade and free markets undercut the ability of elites in less developed countries to pillage a
nation’s resources at the expense of its poor. Proof can be found in the immigration patterns of poor
people throughout the world. By the millions, they seek to leave closed and centrally controlled
economies for those that are more open and less controlled. Poor people themselves understand that a
free economy serves their interests, even if many of their self-appointed intellectual advocates in the
West do not. Nations open to trade tend to be more prosperous, just as cities along coastlines and
navigable rivers tend to be wealthier than those in more remote, inland locations. The most recent
Economic Freedom of the World study, by James Gwartney and Robert Lawson, found that the nations
that were most open economically from 1980 through 1998 grew nearly five times faster than those
that were most closed. And that trade-related growth lifts the lot of the poor. To cite the most dramatic
example of this, the World Bank estimates that the number of Chinese citizens living in absolute
poverty—that is, on less than $1 per day—has fallen since 1978 by 200 million. Revoking China’s normal
trade status, among all its other negative consequences, would set back one of the most successful antipoverty programs in the history of mankind. In contrast, those regions of the world where poverty has
been the most intractable, sub-Saharan Africa and South Asia, have been the least open to trade and
foreign investment. For all these reasons, trade sanctions fall heaviest on the poor of the target nation.
Political rulers have the power to protect their pampered lifestyles, while the poor are left to suffer the
consequences of U.S. policies that were enacted in the name of helping the very people they victimize.
You can be sure that the communist leaders in Cuba and the ruling junta in Burma will continue to enjoy
their fine, catered meals and chauffeur-driven cars while the millions of poor people they oppress are
made even more miserable by U.S. trade and investment sanctions. When all these arguments are
weighed, it should become clear that a policy of free trade is moral as well as efficient. Free trade limits
the power of the state and enhances the freedom, autonomy, and self-responsibility of the individual. It
promotes virtuous and responsible personal behavior. It brings people together in “communities of
work” that cross borders and cultures. It opens the door for ideas and evangelism. It undermines the
authority of dictators by expanding the freedom, opportunity, and independence of the people they try
to control. It promotes peace among nations. It helps the poor to feed and care for themselves and
creates a better future for their children. For which of these virtues should we reject free trade?
Alternatives to free trade are immoral – liberalization solves poverty and war
Bhagwati 11 - dean of international-trade economists at Columbia University (Jagdish, “A convincing
case for free trade found in the history books,” The National, June 27 2011,
http://www.thenational.ae/business/industry-insights/economics/a-convincing-case-for-free-tradefound-in-the-history-books?pageCount=0 ) //JG
Contrary to what sceptics often assert, the case for free trade is robust. It extends not just to overall
prosperity (or "aggregate GNP"), but also to distributional outcomes, which also makes the free trade
argument morally compelling. The link between trade openness and economic prosperity is strong and
suggestive. For example, Arvind Panagariya of Columbia University divided developing countries into
two groups: "miracle" countries that had annual per capita GDP growth rates of 3 per cent or higher;
and "debacle" countries that had negative or zero growth rates. Mr Panagariya, an Indian economist,
found commensurate corresponding growth rates of trade for both groups from 1961 to 1999. It could
be argued that GDP growth causes trade growth, rather than vice versa - that is, until one examines the
countries in depth. Nor can one argue that trade growth has little to do with trade policy: while lower
transport costs have increased trade volumes, so has steady reduction of trade barriers. More
compelling is the dramatic upturn in GDP growth rates in India and China after they turned strongly
towards dismantling trade barriers in the late 1980s and early 1990s. In both countries, the decision to
reverse protectionist policies was not the only reform undertaken, but it was an important component.
In the developed countries, too, trade liberalisation, which started earlier in the postwar period, was
accompanied by other forms of economic opening (including a return to currency convertibility),
resulting in rapid GDP growth. Economic expansion was interrupted in the 1970s and 1980s, but the
cause was the macroeconomic crises triggered by the success of the Opec nations and the ensuing
deflationary policies pursued by Paul Volcker, the US Federal Reserve chairman at the time. Moreover,
the negative argument that historical experience supports the case for protectionism is flawed. Douglas
Irwin, the economic historian, has challenged the argument that 19th-century protectionist policy aided
the growth of infant industries in the US. He has also shown that many of the 19th century's successful
high-tariff countries, such as Canada and Argentina, used tariffs as a revenue source, not as a means of
sheltering domestic manufacturers. Nor should free traders worry that trade openness prevented
additional growth for some developing countries, as critics contend. Trade is only a facilitating device. If
your infrastructure is poor, or you have domestic policies that prevent investors from responding to
market opportunities (such as south Asia's stifling licensing restrictions), you will see no results. To gain
from trade openness, you have to ensure that complementary policies are in place. B ut then critics shift
ground and argue that trade-driven growth benefits only the elites and not the poor; it is not "inclusive".
In India, however, the shift to accelerated growth after reforms that included trade liberalisation has
pulled nearly 200 million people out of poverty. In China, which grew faster, it is estimated that more
than 300 million people have moved above the poverty line since the start of reforms. In fact, developed
countries also benefit from trade's effect on poverty reduction. Contrary to much popular opinion, trade
with poor countries does not pauperise rich countries. The opposite is true. It is unskilled, labour-saving
technical change that is putting pressure on the wages of workers, whereas imports of cheaper, labourintensive goods from developing countries help the poor who consume them. If freer trade reduces
poverty, it is presumptuous for critics to claim greater virtue. In truth, the free traders control the moral
high ground: with at least 1 billion people still living in poverty, what greater moral imperative do we
have than to reduce that number? Talk about "social justice" is intoxicating, but actually doing
something about it is difficult. Here the free traders have a distinct edge. As the historian Frank
Trentmann has demonstrated, the case for free trade was made in 19th-century Britain in moral terms:
it was held to promote not just economic prosperity, but also peace. It is also worth recalling that in
1945, Cordell Hull, at the time the US secretary of state, was awarded the Nobel Peace Prize for policies
that included his tireless efforts on behalf of multilateral free trade. It is time for the Norwegian Nobel
committee to step up again.
AT: Trade is imperialist
The claim free trade is imperialist is factually incorrect and contributes to poverty
Teson, 12 – Tobias Simon Eminent Scholar at Florida State University College of Law; former career
diplomat for the Argentine Foreign Ministry (Fernando, WHY FREE TRADE IS REQUIRED BY JUSTICE,
Social Philosophy & Policy29.1 (Jan 2012): 126-153, proquest)
International trade takes place mostly between private agents. A private producer in state A attempts to
sell his product to private consumers in state B but the government of state B interferes by placing trade
barriers, thus raising the cost for the consumers. Governments, I have argued, should not interfere with
these voluntary transactions. But sometimes this voluntariness has been vitiated. Trade presupposes
legitimate ownership over the traded goods, but sometimes the traded goods are stolen. How should
the international trade system address the problem of stolen goods? The view that condemns trading in
stolen goods has two versions: the Imperialist Thesis and the Dictator-Thief thesis. According to the
Imperialist Thesis, rich people in developed nations presently hold resources that they obtained in the
past from people in developing countries through theft, force, and deception. Trading with the poor the
very resources that the owner stole from him is deeply wrong. According to the Dictator-Thief thesis,
despots stole resources from their subjects and sold them to foreigners (usually in rich nations) mostly
to advance these despots' own interests and consolidate their power. Both theses recommend
corrective measures even before opening trade. We must return the stolen goods to their rightful
owners; only then we could start talking about free trade. I discuss each thesis separately.
I have two replies to the Imperialist Thesis. The first is simply that its factual premises are, for the most
part, wrong. The reasons why some nations are rich and others are poor have little to do with theft.
Rather, they have to do with different equilibria between productive and predatory forces in society, as
reflected in the quality of institutions and in particular on the success or failure of market-friendly
practices. But there are surely some instances (some colonial cases come to mind) where perhaps some
of the resources currently held by persons in rich countries are ill-gotten. However, even if ideally
compensation would be sometimes justified, the practical difficulties of determining what part of the
current wealth held by individuals should be returned to their rightful owners would be daunting. Surely
not all wealth, not even its greatest part, is stolen.
But the Imperalist Thesis is misconceived in another sense. It recommends not liberalizing trade on the
grounds that rich countries have no title over the goods they trade. Yet international institutions should
help reduce poverty, here and now. If corrective measures are infeasible either because the theft took
place too far back in time, or because we cannot possibly know the percentage of wealth that was
stolen, or because the amount of coercion needed to restore the status quo ante is morally prohibitive,
or simply because international politics pose insurmountable practical obstacles, or for some other
reason, then that should not be a reason to refuse to liberalize trade, here and now, as a way to
alleviate the world's poverty.
WTO failure makes bilateral and regional deals inevitable
Miles, 13 (Tom, “Is the WTO About to Abandon Dream of Global Free Trade?” Insurance Journal, 1/14,
http://www.insurancejournal.com/news/international/2013/01/14/277353.htm)
As it seeks a new chief to lead it out of a negotiating death-spiral, the World Trade Organization looks
doomed to be fatally undermined by new global carve-ups that will leave many of the world’s poorest
sidelined.
At its creation 18 years ago, as the “third pillar” of the post-World War Two economic system, alongside
the World Bank and the International Monetary Fund, tariffs fell by a third and world markets, from
farm produce to finance, were opened up.
A boom in commerce ensued, gathering pace when China became a member in 2001. But then, at a
meeting in Doha that year, the WTO launched an ambitious attempt to push for further liberalization
that would help developing countries most of all.
The talks dragged on for 10 years, failing to resolve a split between the developed and developing
worlds, mostly over agriculture. WTO Director-General Pascal Lamy, who vowed in 2005 to make them
his “first, second and third priority”, finally declared an “impasse” in 2011.
The WTO’s first head, Peter Sutherland, wrote in an op-ed published on Dec. 31 that it was “a unique
failure in the history of multilateral trade negotiations.”
The stalemate triggered a scramble to arrange preferential trade terms outside the WTO – regional
deals such as the U.S.-led Trans-Pacific Partnership and bilateral agreements such as the one the
European Union is pursuing with the United States.
“If either ever comes to pass, which I doubt, a huge share of world trade would be conducted within a
discriminatory framework,” wrote Sutherland.
Such deals were already common before the “impasse”, but afterwards they became the main focus for
many countries seeking a route back to economic growth. British Prime Minister David Cameron has
made an EU-U.S. deal one of three priorities for the UK’s presidency of the G8 group of nations, which
began this month.
AT: Regional deals undermine global trade
Regional deals are inevitable – lack of WTO leadership
Miles, 13 (Tom, “Is the WTO About to Abandon Dream of Global Free Trade?” Insurance Journal, 1/14,
http://www.insurancejournal.com/news/international/2013/01/14/277353.htm)
Instead, Evenett said, they will distance themselves obliquely, with lines like: “It was not our finest hour”
or “There’s still some way to go,” while suggesting they could be part of a creative process to try and
figure out how to move on.
“This is not business as usual,” said Richard Baldwin, professor of international economics at the
Graduate Institute of Geneva.
“By analogy, the WTO needs a Bernanke or Draghi – a policy leader who can think out of the box and
understand how the world has changed and how the policy must change with it – not a Greenspan or
Trichet, who were simply implementing the old rules in a faithful, dogmatic style,” he added.
But the chances of a revolution are slim. “The way I see it now,” said Baldwin, “the U.S. and China are
happy to let the WTO languish – China has nothing to complain about that could be fixed by any
conceivable version of Doha, and the U.S. sees no substantial gains from finishing Doha on the current
terms.”
Both he and Evenett said there was a chance that the WTO would pick a “placeholder” director-general.
“If they want a quiet time, you might not want a particularly ambitious WTO head. Someone who just
treads water might be acceptable,” said Evenett.
That would allow the surge of regional deals to continue unchecked. They would entrench and lubricate
corporate supply chains, a bonus to big business, but would do nothing to assuage developing countries
wanting a fairer deal on agriculture or better access to rich markets for their exports and services.
Expanding the TPP key to untangle the noodle bowl and generate momentum to
resolve problems
Elms and Lim 12 – *Head, Temasek Foundation Centre for Trade & Negotiations and Senior
Fellow of International Political Economy at the S. Rajaratnam School of International Studies AND
**Ph.D, Specialist in international economic law and a former trade negotiator. Professor of Law at the
University of Hong Kong where he chairs the East Asian International Economic Law & Policy
Programme (Deborah and C.L., “The Trans-Pacific Partnership Agreement (TPP) Negotiations: Overview
and Prospects”, S. Rajaratnam School of International Studies, 2/21/2012,
http://www.rsis.edu.sg/publications/WorkingPapers/WP232.pdf)//JL
Overlapping agreements created many issues for TPP negotiators. One important debate was how the
new agreement would relate to existing PTAs. From the beginning, three broad models were possible: 1) the TPP
agreement would supersede existing bilateral PTAs between members; 2) the TPP would exist side-by-side with all
the existing agreements (and, like Singapore and New Zealand, business will be allowed to choose whichever agreement gives them the
greatest benefits; or 3) the TPP would become a hybrid agreement in which some sections of the TPP replaced existing agreements in some
areas while other portions of existing PTAs that were not covered or covered differently would continue to exist. Early discussions in the TPP
suggested that the first option was preferable. A new TPP agreement would replace existing arrangements. This meant replace in the practical
sense, however, as existing PTAs
would not be revoked. Assuming that the new TPP deal provides better, wider
ranging liberalization and coverage than existing agreements, business would likely take advantage of
the TPP preferences. The net effect would be the replacement of existing deals with a new agreement. This outcome would clearly
help in untangling the noodle bowl, as businesses across the nine member countries would be working
from the same agreement. This would streamline trade flows by allowing exporters to, for example,
make only one rule of origin (ROO) calculation before shipping goods to multiple TPP members. The
payoff from a comprehensive agreement would be even greater if the TPP expands in the future to
include more members. The ‘replacement model’ for the TPP would also help negotiators in reaching
a ‘21st century’ standard for the agreement, as ‘best practices’ learned through experience in different
PTA settings could be incorporated into the TPP. Although PTAs have a clause allowing for regular reviews, existing
agreements are almost never ‘reopened.’ Modifications to existing deals are rare and usually quite limited. If negotiators have failed to ‘get it
right’ the first time or if modalities in negotiations have changed substantially over time, there are few mechanisms for large-scale changes in
the future. This may be a function of the relatively short history of PTA negotiations. Another argument for a
wholly new agreement
is that it would increase incentives for government officials and business leaders to take the talks
seriously. The document would replace a host of existing agreements - it would focus and sharpen minds. Ignoring
existing agreements and starting over with new negotiations might be easier for negotiators who could
then aim for an ideal outcome from the beginning.
China advantage
Incentives key to China participation
The aff makes negotiations effective – entices China to enter
Negroponte 6/14/13 - adjunct professor of law at Fordham University (Diana, The End of Nostalgia:
Mexico Confronts the Challenges of Global Competition, 6/14/13,
,http://books.google.com/books?id=vnwBwMhf2oC&pg=PT78&lpg=PT78&dq=China+%22more+to+gain%22+from+%22transpacific+partnership%22+successful+negotiations&source=bl&ots=hQ8oAIdSZ7&sig=FqvJ_TwsYE96LbfMPSH-b5DP8&hl=en&sa=X&ei=oD_0Uci3HYqMqgH_uYGoAw&ved=0CC0Q6AEwAA#v=onepage&q=transpacific%20partnership&f=false)//AC
GLOBAL TRADE AND THE TRANS-PACIFIC PARTNERSHIP. As three tightly integrated, open economies, the United States,
Mexico, and Canada have much to gain by working together on a global trade agenda designed to increase
exports by countering protectionism and opening markets. The fact that each of the North American
nations has joined the Trans-Pacific Partnership (TPP) negotiations to create a free trade agree that
would link them to eight other Pacific Rim countries could be interpreted as a sign that the NAFTA
partners are ready to work as economic allies on the global stage. Their inclusion in the TPP
negotiations protects the regional integration achieved by NAFTA while creating an opportunity to
update NAFTA without reopening the still divisive agreement. Nonetheless, a look at the complicated plan that brought
the three countries together suggests that they may not yet fully embrace the advantages of acting in concert as
an economic bloc. Both Mexico and Canada were latecomers to the TPP because of complicated domestic politics and the protectionist
leanings of protected industries, and the United States was slow to welcome its neighbors after they had at last signaled their interest in
The TPP has the potential to become the new model for trade agreements (with an updated
approach to services, intellectual property, and technology), and if it is successfully negotiated and
implemented, China may decide that it has more to gain by joining than by sitting out. If so, that would
in turn create a strong incentive for progress on the global trade agenda at the World Trade Organization
(WTO). Although the United States, Mexico, and Canada seem to have not yet decided to work together as a
bloc, the pieces are in place and there is great potential for them to use the TPP as a first move in a
strategic process to encourage the opening of markets and expansion.
joining.
It’s up to China to join the TPP – key to solve US integration and US-China relations
Boris & Jiabao 13 - Editor-Writer at China Daily (Joseph and Li, “Door to TPP is open for China, says US,”
China Daily, 3/22/13, http://www.chinadaily.com.cn/kindle/2013-03/22/content_16333136.htm)//AC
The United States remains open to including China in a Pacific free-trade zone, Washington's top trade official said,
less than a week after Japan asked to join the negotiations. Acting US Trade Representative Demetrios Marantis said on Wednesday that it's
up to China if the country wants to join the Trans-Pacific Partnership talks and satisfy the 11 nations now engaged that
it could live up to the pact's requirements. "Whether it's China, whether it's the Philippines, whether it's
Thailand, it's incumbent upon those economies to be able to convince the other TPP partners that they
are capable of meeting the high standards that we're negotiating," Marantis told reporters at a briefing on the US trade
agenda for 2013. Asked about Japan's bid to join the TPP talks, Shen Danyang, spokesman for the Ministry of Commerce, said on Tuesday
that Beijing is open to all efforts to promote regional economic integration. China will keep communicating
with parties in all of those efforts while promoting its own free trade negotiations, Shen said. The Chinese
mainland has free trade pacts with 10 economies, including the Association of Southeast Asian Nations, New Zealand, Hong Kong and Taiwan,
and is talking with six others, including Australia. China has also emphasized its ongoing talks to create a three-way free trade zone with Japan
and South Korea. However, Zhang Yunling, director of the division of international studies at the Chinese Academy of Social Sciences, said China
should not join the TPP talks despite Washington's reiteration of openness. "The US may not really welcome China's participation in the TPP
because China's huge market size would weaken the US' dominating position in setting up the new trade rules conceived in the TPP.
Meanwhile, the threshold of the TPP is too high for China to take," Zhang said. The US is in talks with Australia, Brunei, Canada, Chile, Malaysia,
Mexico, New Zealand, Peru, Singapore and Vietnam to join the TPP. Their 16th round of talks concluded last week in Singapore. Zhang added
that China's key move is the three-way free trade pact with Japan and South Korea, as well as the Regional Comprehensive Economic
Partnership, or RCEP, which involves 10 ASEAN nations and six major Asia-Pacific economies - China, Australia, India, Japan, South Korea and
New Zealand. "The TPP is a challenge but also a motivation. China must thus have a more active role and a more active attitude as well as
further open its market in advancing the trilateral pact and the RCEP. China, Japan and South Korea have urgent interests to reach the threeway pact, while the RCEP will have a larger market power than the TPP after it's established," Zhang said. Last Friday in Tokyo, Prime Minister
Shinzo Abe announced that Japan would join the negotiations, calling it a "last chance" for his country to help craft new regional trade rules.
The bid by the world's No 3 economic power is subject to approval by the 11 current TPP negotiators. "For Japan, to remain inward-looking
means we are giving up on the possibility of growth," said Abe, whose decision came amid tension within his pro-business Liberal Democratic
Party, including fears that the TPP could harm Japanese farmers. The US, Marantis said, welcomed Japan's move. On Friday, his first day as
President Barack Obama's point man on trade, he said "important work remains to be done" to resolve issues over Japanese policies in the
automotive and insurance sectors. US Representative Ed Royce, who is chairman of the House Foreign Affairs Committee and has voted in favor
it won't be enough to restore US economic
influence in the region. "The center of economic activity within Asia has shifted gradually away from
the US to China," the California Republican said on Wednesday in a speech at the Heritage Foundation,
a conservative think tank, in Washington. "Intra-regional trade between China and Southeast Asia has
grown tremendously. Trade between China and Australia has also grown. Even Japan is now more focused on the Chinese market than
the American market. And while I fully support Japan's expressed interest to join the Trans-Pacific Partnership free trade agreement, the TPP
alone cannot reverse this trend." Jon Tayor, a political science professor at the University of St Thomas in Houston, said that while
the current trajectory of US-China relations is positive, given China's new leadership and Obama's
nascent second term, the TPP can be seen as a symbol of lingering mistrust. "Treating China like an
opponent by not including it in the Trans-Pacific Partnership is counterproductive at best," Taylor said. "It would
be much more productive to recognize and nurture the symbiotic relationship between the world's two
largest economies." Marantis said at Wednesday's briefing that Washington is focused on discussions with Beijing to address
of most free trade pacts during his time in Congress, supports the TPP, but believes
"competitive distortions" to trade that State-owned enterprises, or SOEs, can create. He said such concerns are also being addressed within the
TPP framework and on a recently announced trans-Atlantic trade agreement between the US and the European Union. The Obama
administration official, who succeeds Ron Kirk as trade representative, also pointed to negotiations with China on a bilateral investment treaty.
"It's very important. I think it will help really put important obligations in place that will create stability in the investment climate and address, I
think, very important market-access issues as well," Marantis said.
TPP key to relations
The TPP solves China relations by eliminating aggressive competition – key to solve
warming and the economy
Jisi 7/24/13 - Dean of School of International Studies, Peking University (Wang, “Study Projects
Glittering US-China Economic Relations in 2022,” China-US Focus, 7/24/13,
http://www.chinausfocus.com/finance-economy/study-projects-glittering-us-china-economic-relationsin-2022/)//AC
The Chinese and American economies in the next ten years will be largely shaped by the degree to
which they are integrated. No other publication thus far has demonstrated this trajectory as thoroughly
and convincingly as the study presented in this volume. Fifteen eminent economists and business
leaders based in the United States, the Chinese mainland, and Hong Kong have collaborated to analyze
the current China-U.S. economic relationship and project its future. In view of the potentials and difficulties in
strengthening China-U.S. economic ties, the writers are offering collective as well as individual proposals for the governments and business
communities of the two countries to further their cooperation for mutual benefit. The final product is extraordinarily glittering and
encouraging. Indeed, there are ample reasons for optimism if one traces the history of China-U.S. economic engagement. When President
Richard Nixon made his historic arrival in China forty-one years ago, the U.S.-China economic relationship was nonexistent. China’s economic
policy and performance were of little or no consequence to U.S. domestic economy; nor did U.S. economic policy and performance have any
effect on China’s. In the ensuing four decades China-U.S.
bilateral economic relations have grown exponentially, which
are increasingly consequential to both countries. The study shows that the opening of the large American consumer market
enabled the early success of China’s economic reform and opening policy. Steadily, China has become the “World’s Factory.” U.S. direct
investment has not only brought in capital, but also technological knowhow and management skills. U.S. involvement also helps China to
improve its own corporate governance, regulatory regimes, and financial markets. On the U.S. side, imports from China have been of adequate
quantity and low cost. Both imports from China and the People’s Bank of China’s continuing net purchases of U.S. Treasury securities, with
US$1.3 trillion by now, have helped the U.S. to keep its rate of inflation low for all these years. Given the current high U.S. public debt level, this
is particularly significant. Business
with China has made American multinational corporations very competitive
globally. With the continued fast growth of the Chinese economy, Chinese imports from the United States have also been increasing rapidly.
Therefore, the China-U.S. economic relationship is indeed “win-win” for both countries. The account of the brilliant
stories thus far in China-U.S. economic cooperation is impressive enough, but more striking and magnificent is the forecast of its future. The
study emphasizes that the differences between the two economies are precisely where their complementarity arises. The authors, throughout
this volume, provide new meanings to the cliché that China is the largest developing country whereas the United States is the largest developed
country in the world, and that they therefore share many common interests and responsibilities. The two economies’ comparative advantages
do not coincide. It is illustrated in the study that “the U.S. has a significant comparative advantage in industries that are relatively tangible
capital-intensive, land-intensive (such as agriculture) and human-capital and R&D-capital-intensive (such as high-technology industries) whereas
China has a significant comparative advantage in relatively labor-intensive industries.” Two cases the study refers to are in point. First, because
of the relative shortage of arable land for China’s population,
the United States has already become China’s largest
supplier of agricultural products and China is now the largest market for U.S. agricultural products. The
middle class in China, expected to grow from the current approximately 200 million to approximately
630 million in ten years, with the urbanization drive, will demand much more agricultural products that
the United States will be able to supply. Thus the potential for agricultural cooperation is enormous.
Second, in 2012 there were just over 1 million Chinese tourists visiting America. A conservative estimate
for 2022 is 3 million, but it is entirely possible that there would be 10 million Chinese tourists arriving in
the United States annually, creating an incredible number of jobs and value-added GDP for Americans.
The study uses numerous words like “the largest” to display the opportunities for the China-U.S.
economic engagement, which, if properly grasped, will make dramatic contributions to the world
economy and global governance. For instance, China and the United States will remain the two “largest”
economies of the world in the foreseeable future. The American economy is likely to recover sooner and grow more rapidly
than most other developed economies, while China continues to be one of the fastest growing economies. Consequently, their respective
performance and bilateral relations will make a great impact on the global economy. China and the U.S. are the two
“largest” energy producing and consuming nations in the world as well as the two “largest” emitters of greenhouse gases. They also have the
“largest” reserves of coal and shale gas.
The two countries can cooperate to promote energy conservation and
efficiency and explore and develop clean, new renewable and non-conventional forms of energy.
Working together, they can help ensure energy security and sustainable development. They are the two
“largest” trading nations of the world. By 2022, China will likely surpass Canada and Mexico to become the “largest” importing nation of U.S.
goods and services. The U.S. and China will be each other’s “largest” trading partner. The Chinese retail business will be one of the “largest” in
the world, with a size in terms of total value on a par with the United States. As a result, the rapidly rising demand of the Chinese middle class
will provide growth not only for China, but also for the U.S. and other countries. China’s marketplace, together with the U.S. marketplace, will
be two of the “largest” marketplaces in the world. Last but not least, the
U.S. has been granted the “largest” number of
patents among all countries every year, and China is determined to drive its economic growth also by
innovations. The scientific, technological, and educational exchanges between the two countries are
booming. All these “largests” depict a rather bright picture for the China-U.S. economic relationship,
which in ten years may turn out to be the world’s most expansive economic partnership. Realizing the
existing and predictable prospective difficulties lying ahead for them, however, the authors offer
sensible and practical suggestions to further the bilateral cooperation. China should take more seriously U.S.
concerns about intellectual property rights protection, cyber security, the role of Chinese state owned enterprises, market access, exchange
rate policy, and so on. The United States, on its part, should make adjustments to its restrictions on high-tech exports and reduce arbitrary and
if non-cooperation,
aggressive competition, or even conflict occurs between the two countries, bilateral business will
decline or stop. The world economic order will be disrupted and the risks of climate change will rise,
making a disastrous impact on the global economy and governance. This sober warning brings us to politics, which
protectionist administrative actions in both trade and investment. Furthermore, the study warns that
can never be separated from economics. We should not expect economic analysts to go very far from their own fields, and this study is already
sophisticated and comprehensive enough. However, for those who are looking forward to the deepening of China-U.S. economic engagement,
the balance sheet of economics should be further balanced by a political and strategic point of view. China-U.S.
economic relations
provide each country with tremendous incentives to find ways to continue to cooperate and to avoid, or
at least reduce, strategic conflict. Encouragingly, both the new leadership of China and the second
Obama administration have expressed strong hopes for developing a “new model of international
relations” that will refrain from entering into an old type of rivalry between a rising power and a
predominant power, and promote mutual benefit instead. Obstacles do exist, however, to achieving this declared
strategic goal. However, even in the economic realm, the two sides still harbor substantial divergent interests and contrasting visions of the
future global order they hope to see. These divergent interests and contrasting visions are not adequately discussed in this volume. While
the Chinese hope to encourage domestic transformation in the trade regime and investment regulations
in the United States, the Americans are trying to build up sufficient power and influence to transform
the Asia-Pacific region in ways it sees as useful – the Trans-Pacific Partnership (TPP), for example - for reestablishing
its centrality and dominance. These few years have witnessed less Chinese enthusiasm to attract FDI into the country. Some
Americans suspect that Chinese firms are often attempting to invest in sectors of the American economy that the PRC would not permit
foreigners to invest in within China. They charge that Chinese state-owned enterprises, supported by the government, are using cyber
capabilities to “steal” U.S. technological innovations. In addition, it is only natural that not everybody in China and America understands or
accepts the truth of the increasing economic interdependency between the two nations. When people look beyond the economic dimension of
international relations, some may point to security risks and threats, and others may be concerned about sovereignty and prestige of their own
nation. Many in China believe that Washington is carrying out a “containment” policy, manifested by taking advantage of China’s territorial
disputes with some neighboring countries, selling weapons to Taiwan, and supporting separatist tendencies in Xinjiang and Tibet. In contrast, a
sizable part of American strategists and analysts strongly suspect that Beijing’s plans for military modernization and unwillingness to fully
cooperate with Washington over issues like the denuclearization of North Korea and Iran reflect a strategic design to weaken the U.S. position
in global affairs. Security risks are by no means confined to the actual and possible China-U.S. strategic competition. In the Greater Middle East,
terrorism and turbulence continue to linger. The Israeli-Palestinian conflict sees no ending. In Europe, the debt crisis threats to disrupt the
process of regional integration and sows seeds of international discord. A few decades ago, these sorts of mutual distrust, geopolitical shifts,
and tectonic tensions not only would have resulted in large-scale tragic events but might well have provoked war. But today’s world is bound by
shared interests among nation states and widely accepted international rules. Economic benefits
and social welfare are at
least as important as military forces in driving foreign policies and shaping the international order. To be
sure, traditional security concerns and geopolitics are still relevant to the overall China-U.S. relationship. But as this economic study reveals,
commercial and societal interests have served as ballast on the ship of China-U.S. interaction, and will
hopefully remain so in the next ten years. Deepening trade relations give each side a stake in the other’s
success. With more than 1 trillion invested in U.S. Treasury securities, China has a huge stake in a more robust U.S. recovery. The prospect of
a rapidly growing consumer sector and expanding middle class in China will create enormous opportunities for American agriculture and
industry. A strategic and military confrontation between the two nations would shatter all these expectations. Meanwhile, the
deepening
of mutual strategic trust will hopefully help remove the pitfalls in the bilateral economic ties, as noted in this
study. It is imperative, therefore, for more and more people in China and the United States, in particular their political elites, to
comprehend the economic logic in this volume and work together to dispel the shadow of China-U.S.
adversary. The two nations are both at a pivotal stage for setting a new course for the future, and they
should consolidate a cooperative partnership that benefits not only themselves but indeed the whole
world.
The plan bolsters US-Sino relations
Gross 13- Donald Gross, Author, 'The China Fallacy'; Senior associate, Pacific Forum, Center
for Strategic and International Studies, (“Welcoming China to the Trans-Pacific Partnership”,
07/09/13, http://www.huffingtonpost.com/donald-gross/trans-pacific-partnershipchina_b_3562801.html)//sawyer
China's recently declared interest in the TPP reflects its desire to improve relations with the
United States, reduce government involvement in the private sector and help shape the rules of
the Trans-Pacific Partnership. If China seeks membership in the TPP after the regional free
trade agreement is completed, it would have to accept all the terms that were previously
negotiated. By inviting China to join the negotiations for the TPP at the Strategic and Economic
Dialogue, the United States would strengthen the likelihood of the U.S. benefiting both from
China's long-term economic growth and its support for international institutions on which the
U.S. relies. As Professor John Ikenberry of Princeton University puts it: The "United States
cannot thwart China's rise, but it can help ensure that China's power is exercised within the
rules and institutions that the United States and its partners have crafted ... that can protect the
interests of all states in the more crowded world of the future." Most importantly, including
China in the TPP would advance crucial objectives of American economic policy -- obtaining
greater access to the Chinese market for U.S. goods and services, significantly reducing the
Chinese government's role in the private sector, protecting intellectual property, and fostering
greater foreign investment in both China and the United States. This week's Strategic and
Economic Dialogue is an opportune time to make it manifestly clear the United States
welcomes Beijing's participation in the Trans-Pacific Partnership and, in so doing,
resolve an issue that has hurt U.S. relations with China for far too long.
The TPP will increase US-Sino relations
Mendis 13- Patrick Mendis is a distinguished senior fellow in the School of Public
Policy. He is also an affiliate professor of public and international affairs as well as an
adjunct professor of geography and geoinformation science at George Mason University,
(Patrick, “How Washington’s Asia pivot and the TPP can benefit Sino–American
relations”, East Asia Forum, March 6, 2013,
http://www.eastasiaforum.org/2013/03/06/how-washingtons-asia-pivot-and-the-tppcan-benefit-sino-american-relations/)//sawyer
Second, Sino–American trade and commercial history suggests that convergence
between the two largest economies — intensifying indirectly and multilaterally through
the TPP — may instead solidify this existing symbiotic economic relationship. Since
America’s founding, commerce has been the uniting factor among states and with
foreign nations. To achieve Thomas Jefferson’s vision of an ‘Empire of Liberty,’
Alexander Hamilton devised an ingenious strategy that entailed a strong manufacturing
base, a national banking system, the centralised federal government and an export-led
economic and trade scheme protected by the US Navy. Similarly, Deng Xiaoping’s
export-led liberalisation of Chinese economic policy also implicitly recognised the role
of trade and commerce as a unifier of peoples.
TPP will increase US-Sino relations
Mendis 13- Patrick Mendis is a distinguished senior fellow in the School of Public
Policy. He is also an affiliate professor of public and international affairs as well as an
adjunct professor of geography and geoinformation science at George Mason University,
(Patrick, “How Washington’s Asia pivot and the TPP can benefit Sino–American
relations”, East Asia Forum, March 6, 2013,
http://www.eastasiaforum.org/2013/03/06/how-washingtons-asia-pivot-and-the-tppcan-benefit-sino-american-relations/)//sawyer
Meanwhile, from a security perspective, China will be able to continue to prosper from
regional stability. The expansion of Chinese military capabilities and the establishment
of ports of call for PLA Navy ships will seem less threatening if the US Navy is engaged
in the region in a cooperative, multilateral fashion, avoiding direct confrontation but
implicitly projecting the show of force without war to restrain the adversarial behaviour.
This may give China the space to ease into its role as the dominant — but not
domineering — regional power in a way that will best serve its own economic growth
and national security interests. It is also the finest insurance policy for China that holds
over $1 trillion worth of American treasury securities. Ultimately, a regional TPP-led
free trade zone is the best ‘pacifying’ security architecture for long-term stability
between the two economic superpowers in the Pacific Ocean. The TPP will deliver
benefits for individual restraint between the two power centres, and may advance
regional development, encourage the integration of the Chinese economy, and allow
surrounding nations to hedge their bets on (and therefore contribute to) China’s
‘Peaceful Rise.’ In the Asian century, alliances are complex, and multilateralism and
flexibility are the new currency. This era of Sino–American relations will require
measured diplomacy.
Relations solve conflict
South China Sea conflict is extremely likely – relations are key to solve
Glaser 12 - senior fellow with the Freeman Chair in China Studies and a senior associate with the Pacific
Forum, Center for Strategic and International Studies (Bonnie, “Armed Clash in the South China Sea,”
Council on Foreign Relations (CFR), April 2012, http://www.cfr.org/world/armed-clash-south-chinasea/p27883)//AC
The risk of conflict in the South China Sea is significant. China, Taiwan, Vietnam, Malaysia, Brunei, and
the Philippines have competing territorial and jurisdictional claims, particularly over rights to exploit the
region's possibly extensive reserves of oil and gas. Freedom of navigation in the region is also a
contentious issue, especially between the United States and China over the right of U.S. military vessels
to operate in China's two-hundred-mile exclusive economic zone (EEZ). These tensions are shaping—and
being shaped by—rising apprehensions about the growth of China's military power and its regional
intentions. China has embarked on a substantial modernization of its maritime paramilitary forces as
well as naval capabilities to enforce its sovereignty and jurisdiction claims by force if necessary. At the same time, it is developing
capabilities that would put U.S. forces in the region at risk in a conflict, thus potentially denying access to the U.S.
Navy in the western Pacific. Given the growing importance of the U.S.-China relationship, and the Asia-Pacific region
more generally, to the global economy, the United States has a major interest in preventing any one of the
various disputes in the South China Sea from escalating militarily. The Contingencies Of the many conceivable
contingencies involving an armed clash in the South China Sea, three especially threaten U.S. interests and could potentially
prompt the United States to use force. The most likely and dangerous contingency is a clash stemming from
U.S. military operations within China's EEZ that provokes an armed Chinese response. The United States holds
that nothing in the United Nations Convention on the Law of the Sea (UNCLOS) or state practice negates the right of military forces of all
nations to conduct military activities in EEZs without coastal state notice or consent. China insists that reconnaissance activities undertaken
without prior notification and without permission of the coastal state violate Chinese domestic law and international law. China routinely
intercepts U.S. reconnaissance flights conducted in its EEZ and periodically does so in aggressive ways that increase the
risk of an accident similar to the April 2001 collision of a U.S. EP-3 reconnaissance plane and a Chinese F-8 fighter jet near Hainan Island.
A comparable maritime incident could be triggered by Chinese vessels harassing a U.S. Navy surveillance ship operating in its EEZ, such as
occurred in the 2009 incidents involving the USNS Impeccable and the USNS Victorious. The
large growth of Chinese submarines
has also increased the danger of an incident, such as when a Chinese submarine collided with a U.S. destroyer's towed sonar
array in June 2009. Since neither U.S. reconnaissance aircraft nor ocean surveillance vessels are armed, the United States might
respond to dangerous behavior by Chinese planes or ships by dispatching armed escorts. A
miscalculation or misunderstanding could then result in a deadly exchange of fire, leading to further military
escalation and precipitating a major political crisis. Rising U.S.-China mistrust and intensifying bilateral strategic
competition would likely make managing such a crisis more difficult. A second contingency involves conflict between
China and the Philippines over natural gas deposits, especially in the disputed area of Reed Bank, located eighty nautical miles from Palawan.
Oil survey ships operating in Reed Bank under contract have increasingly been harassed by Chinese vessels. Reportedly, the United Kingdombased Forum Energy plans to start drilling for gas in Reed Bank this year, which could provoke an aggressive Chinese response. Forum Energy is
only one of fifteen exploration contracts that Manila intends to offer over the next few years for offshore exploration near Palawan Island. Reed
Bank is a red line for the Philippines, so this contingency could quickly escalate to violence if China intervened to halt the drilling. The
United
States could be drawn into a China-Philippines conflict because of its 1951 Mutual Defense Treaty with
the Philippines. The treaty states, "Each Party recognizes that an armed attack in the Pacific Area on either of the Parties would be
dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional
processes." American officials insist that Washington does not take sides in the territorial dispute in the South China Sea and refuse to
comment on how the United States might respond to Chinese aggression in contested waters. Nevertheless, an apparent gap exists between
American views of U.S. obligations and Manila's expectations. In mid-June 2011, a
Filipino presidential spokesperson stated
that in the event of armed conflict with China, Manila expected the United States would come to its aid.
Statements by senior U.S. officials may have inadvertently led Manila to conclude that the
United States would provide military
assistance if China attacked Filipino forces in the disputed Spratly Islands. With improving political and military ties
between Manila and Washington, including a pending agreement to expand U.S. access to Filipino ports and airfields to refuel and service its
warships and planes, the United States would have a great deal at stake in a China-Philippines contingency. Failure to respond would not only
set back U.S. relations with the Philippines but would also potentially undermine U.S. credibility in the region with its allies and partners more
broadly. A
U.S. decision to dispatch naval ships to the area, however, would risk a U.S.-China naval
confrontation. Disputes between China and Vietnam over seismic surveys or drilling for oil and gas could
also trigger an armed clash for a third contingency. China has harassed PetroVietnam oil survey ships in the past that were
searching for oil and gas deposits in Vietnam's EEZ. In 2011, Hanoi accused China of deliberately severing the cables of an oil and gas survey
vessel in two separate instances. Although the Vietnamese did not respond with force, they did not back down and Hanoi pledged to continue
its efforts to exploit new fields despite warnings from Beijing. Budding
U.S.-Vietnam relations could embolden Hanoi to
be more confrontational with China on the South China Sea issue. The United States could be drawn into a
conflict between China and Vietnam, though that is less likely than a clash between China and the Philippines. In a scenario of
Chinese provocation, the United States might opt to dispatch naval vessels to the area to signal its interest in regional peace and stability.
Vietnam, and possibly other nations, could also request U.S. assistance in such circumstances. Should
the United States become
involved, subsequent actions by China or a miscalculation among the forces present could result in
exchange of fire. In another possible scenario, an attack by China on vessels or rigs operated by an American company
exploring or drilling for hydrocarbons could quickly involve the United States, especially if American lives were
endangered or lost. ExxonMobil has plans to conduct exploratory drilling off Vietnam, making this an
existential danger . In the short term, however, the likelihood of this third contingency occurring is relatively low given the recent thaw
in Sino-Vietnamese relations. In October 2011, China and Vietnam signed an agreement outlining principles for resolving maritime issues. The
effectiveness of this agreement remains to be seen, but for now tensions appear to be defused. Warning Indicators Strategic warning signals
that indicate heightened risk of conflict include political decisions and statements by senior officials, official and unofficial media reports, and
logistical changes and equipment modifications. In the contingencies described above, strategic warning indicators could include heightened
rhetoric from all or some disputants regarding their territorial and strategic interests. For example, China may explicitly refer to the South China
Sea as a core interest; in 2010 Beijing hinted this was the case but subsequently backed away from the assertion. Beijing might also warn that it
cannot "stand idly by" as countries nibble away at Chinese territory, a formulation that in the past has often signaled willingness to use force.
Commentaries and editorials in authoritative media outlets expressing China's bottom line and issuing ultimatums could also be a warning
indicator. Tough language could also be used by senior People's Liberation Army (PLA) officers in meetings with their American counterparts.
An increase in nationalistic rhetoric in nonauthoritative media and in Chinese blogs, even if not representing official Chinese policy, would
nevertheless signal pressure on the Chinese leadership to defend Chinese interests. Similar warning indicators should be tracked in Vietnam
and the Philippines that might signal a hardening of those countries' positions. Tactical warning signals that indicate heightened risk of a
potential clash in a specific time and place include commercial notices and preparations, diplomatic and/or military statements warning
another claimant to cease provocative activities or suffer the consequences, military exercises designed to intimidate another claimant, and
ship movements to disputed areas. As for an impending incident regarding U.S. surveillance activities, statements and unusual preparations by
the PLA might suggest a greater willingness to employ more aggressive means to intercept U.S. ships and aircraft. Implications for U.S. Interests
The United States has significant political, security, and economic interests at stake if one of the contingencies should occur. Global rules and
norms. The United States has important interests in the peaceful resolution of South China Sea disputes according to international law. With
the exception of China, all the claimants of the South China Sea have attempted to justify their claims based on their coastlines and the
provisions of UNCLOS. China, however, relies on a mix of historic rights and legal claims, while remaining deliberately ambiguous about the
meaning of the "nine-dashed line" around the sea that is drawn on Chinese maps. Failure to uphold international law and norms could harm
U.S. interests elsewhere in the region and beyond. Ensuring
freedom of navigation is another critical interest of the
United States and other regional states. Although China claims that it supports freedom of navigation, its insistence that foreign
militaries seek advance permission to sail in its two-hundred-mile EEZ casts doubt on its stance. China's development of
capabilities to deny American naval access to those waters in a conflict provides evidence of possible
Chinese intentions to block freedom of navigation in specific contingencies. Alliance security and regional stability.
U.S. allies and friends around the South China Sea look to the United States to maintain free trade, safe and
secure sea lines of communication (SLOCs), and overall peace and stability in the region. Claimants and
nonclaimants to land features and maritime waters in the South China Sea view the U.S. military presence as necessary to allow decisionmaking free of intimidation. If
nations in the South China Sea lose confidence in the United States to serve as
the principal regional security guarantor, they could embark on costly and potentially destabilizing arms
buildups to compensate or, alternatively, become more accommodating to the demands of a powerful
China. Neither would be in the U.S. interest. Failure to reassure allies of U.S. commitments in the region could also undermine U.S. security
guarantees in the broader Asia-Pacific region, especially with Japan and South Korea. At the same time, however, the United States must avoid
getting drawn into the territorial dispute—and possibly into a conflict—by regional nations who seek U.S. backing to legitimize their claims.
Economic interests. Each
year, $5.3 trillion of trade passes through the South China Sea; U.S. trade accounts
for $1.2 trillion of this total. Should a crisis occur, the diversion of cargo ships to other routes would
harm regional economies as a result of an increase in insurance rates and longer transits. Conflict of any
scale in the South China Sea would hamper the claimants from benefiting from the South China's Sea's
proven and potential riches. Cooperative relationship with China. The stakes and implications of any U.S.-China
incident are far greater than in other scenarios . The United States has an abiding interest in
preserving stability in the U.S.-China relationship so that it can continue to secure Beijing's
cooperation on an expanding list of regional and global issues and more tightly integrate China into
the prevailing international system.
Specifically economic relations with China are key to avert conflict
Friedberg 5 - PhD in Politics from Harvard, professor of politics and international affairs at Princeton,
served from 2003 to 2005 in the office of the Vice President of the United States as deputy assistant for
national-security affairs and director of policy planning (Aaron, “The Future of U.S.-China Relations,” 30
International Security 7, Fall 2005, http://belfercenter.ksg.harvard.edu/files/is3002_pp007045_friedberg.pdf)//AC
In the near term, as in the recent past, the competition-inducing mechanisms identified by the pessimists will
continue to
exert a strong influence. The two most important factors on this side of the equation will be the rate of growth of China’s material
power and the developmental trajectory of its domestic political institutions. If the PRC continues to grow wealthier and stronger without
significant political liberalization, the tendencies toward competition with the United States will remain and will likely
become more intense, amplified by the workings of the security dilemma, by mutual, ideologically
rooted fear and suspicion, and, perhaps, by the expanding ambitions of China’s autocratic rulers. Even
without a major, transformative crisis, under such circumstances hostile images of the other side could become more pervasive in both
societies, and the domestic political incentives for tougher, more confrontational
policies may also grow. Fortunately, a
number of the factors to which the optimists point seem likely to continue to act as a brake on what might
otherwise be an unchecked slide toward mounting competition and increasingly open confrontation.
Assuming that they persist and grow, the mutual gains from an expanding economic relationship will
remain the single most important peace-inducing force at work in U.S.-China relations
Relations solve for US-China conflict
Lawrence, 13 - Specialist in Asian Affairs (Susan V., “US-China Relations: Policy Issues”, Congressional Research Service,
http://www.fas.org/sgp/crs/row/R41108.pdf)//VP
Hanging over the relationship is the larger question of whether, as China grows in economic and military
power, the United States and China can manage their relationship in such a way as to avoid debilitating
rivalry and conflict that have accompanied the rise of new powers in previous eras. On a visit to the United
States in February 2012, Xi Jinping, who became China’s top leader later in the year, proposed that the two countries
establish a “new type of great power relationship” that explicitly seeks to avoid conflict. President
Obama has accepted the challenge. He described a June 7-8, 2013, summit with Xi in Rancho Mirage, CA, as an opportunity for
conversations about “how we can forge a new model of cooperation between countries based on mutual
interest and mutual respect.”1Some principles for this “new model” U.S.-China relationship are already
in place. The Obama Administration has repeatedly assured China that it “welcomes a strong, prosperous and successful China that plays a
greater role in world affairs,” and China has stated that it “welcomes the United States as an Asia-Pacific nation that contributes to peace,
stability, and prosperity in the region.”2But
the “new model” remains a work in progress, with many observers in
both Washington and Beijing noting deep mistrust on both sides of the U.S.-China relationship. (See
“Forging a “New Model of Cooperation” with China,” below.) Xi and his Chinese leadership colleagues assumed their Communist Party posts at
the Party’s 18thCongress in November 2012, and added other posts, in Xi’s case the state presidency, at the annual meeting of the National
People’s Congress in March 2013. In their early months in office, China’s new leaders have signaled a strong desire to strengthen the U.S.-China
relationship. The
Obama Administration credits them with being willing to go beyond their predecessors on
several issues of concern to the United States. China has shown somewhat greater willingness to
pressure North Korea over its nuclear program. A trip to China in April 2013 by the Chairman of the Joint Chiefs of Staff,
General Martin Dempsey, elicited some of the most unambiguous language yet from China’s People’s Liberation Army signaling acceptance of
the United States military presence in Asia.3The Obama-Xi summit in June 2013 produced an agreement for the United States and China to
work together to combat global climate change by reducing the consumption and production of hydrofluorocarbons (HFCs),4and Secretary of
State John Kerry’s April 2013 visit to China produced an unprecedented stand-alone joint statement on climate change.5China has also agreed
to the establishment of a high-level working group on cybersecurity, although the two presidents appeared to make little progress on the issue
in their June 2013 meetings. The United States charges that cyber intrusions into U.S. government and private networks “appear to be
attributable directly to the Chinese government and military.”
Chinese participation solves
Chinese participation key to successful TPP negotiations – spurs better overall trade
Huang 7/8/13 - senior associate in the Carnegie Asia Program, where his research focuses on China’s
economic development and its impact on Asia and the global economy (Yukon, “Asia Needs Both U.S.
and China Involved in Trade Deals,” Financial Times, 7/8/13,
http://carnegieendowment.org/2013/07/08/asia-needs-both-u.s.-and-china-involved-in-tradedeals/gdw0)//AC
Lurking in the background of the imminent US-China strategic dialogue are concerns about what role, if any, the world’s second-largest
economy will play in the Trans-Pacific Partnership and how the that trade grouping will compete with or complement the Regional
Comprehensive Economic Partnership. Getting
the details of these mega-regional trade deals wrong could
seriously damage Asia’s regional economic infrastructure – a point which is often overlooked. Preventing this will
require both China and the US to take more active positions. In China, many view the TPP with
suspicion, charging that it is part of a deliberate containment strategy by the US. But western policy makers describe the deal as a 21stcentury, high standard agreement that will benefit the global economy, and further US strategic interests in the Asia-Pacific. With respect to
China’s strategic posture, it
does not particularly matter which of these views is true – in fact, both might be at the same
time. The more important question for China is what position it will take on the TPP given that it already has a role
in the Asean-centric RCEP. China believes that it will be very difficult for it to meet the high standards being negotiated under the TPP.
Disciplines on state-owned enterprises, government procurement and stricter protection of intellectual property rights are potential stumbling
blocks for Beijing. But China
is not the only one who will find it difficult to meet these high standards. The TPP
negotiating partners are a diverse group of countries with vastly different sizes and levels of development. Vietnam, Malaysia
and Singapore all have important state entities that receive preferential government treatment. Poorer countries such as Vietnam will find it
challenging to conform to strict labour, legal and environmental regulations. Protectionist sentiments toward agricultural interests are strong
within many of the supposedly high-standard economies. The
partnership is perceived as providing less flexibility and
making fewer allowances than the RCEP. But given the diversity of the negotiating partners, this should
not be seen as an insurmountable barrier for China. In the short term, the stricter standards may not seem compatible with
China’s current strategic objectives. But viewed over the long term, China’s interests in issues such as IPR protection are
likely to move closer to the TPP standard, even as it continues to disagree on some issues such as defining key sectors for state
involvement. China should see itself as having an interest in being actively involved in TPP negotiations as early
as possible. This will give it more say in shaping standards, rather than coming in later and being forced to accept a fully
formed agreement. Entering early also avoids the possibility of being blacklisted for non-economic reasons, given that
new applicants require unanimous approval from current members. Even if China’s request to join the TPP is denied, this is
still advantageous from its strategic perspective. Receiving clarity on whether it is actually welcome to join is much
preferable to passively waiting for an invitation. The addition of China to the TPP would greatly benefit
the deal. While some have argued that its presence would be disruptive because it is harder to grant exemptions for
a large country, Japan’s accession, carrying its own set of sensitive issues, makes this reasoning less convincing. In fact,
building a trade architecture with multiple large economies makes more sense for the future of the “living
agreement” than having a single dominant country negotiate with many smaller ones. Some argue against China’s involvement
with the TPP because it already has a role in RCEP. This agreement aims to create a free trade area between the Association
of South-East Asian Nations, Japan, South Korea, China, Australia, India and New Zealand. It has many of the same objectives as
the TPP, but tackles a slightly more limited range of issues, and its lower standards and promises of
development assistance make it more easily accessible to developing countries. Realistically both the TPP and
RCEP negotiating processes will take a long time, and uncoordinated could well lead to conflicting results. This would be harmful for the
regional economy because much of the economic activity in east Asia depends on the operation of the production-sharing network that links
countries. As countries proceed with trade liberalisation either through the TPP, the RCEP or both forums simultaneously, it
is critical to
make sure this process does not harm the production sharing network by creating conflicting regulations or
restrictive rules of origin. Protecting the underlying structures that have made Asia the most economically dynamic region in the
China’s involvement in both negotiations would be
helpful in this regard. The diverse group of TPP negotiating partners, including many southeast Asian
nations also involved in the RCEP, makes excuses for excluding China less than credible. This process can work
in both directions – if China joins the TPP, the US should also seek some role in the RCEP. This would move the
TPP and the RCEP closer together, bring in broader interests of a range of countries in the region, and
speed up the end goal of creating a free trade area for the Asia-Pacific.
world requires making the TPP and the RCEP more closely linked.
The TPP will be beneficial for China – WTO proves
Zhile 6/24/13 – Staff Reporter for China Daily (Wang, “TPP can benefit China,” China Daily, 6/24/13,
http://usa.chinadaily.com.cn/opinion/2013-06/24/content_16648900.htm)//AC
The experience of China's WTO membership shows that further opening-up would help push forward needed reforms China's enormous
success in pushing forward a series of domestic reforms in order to join the World Trade Organization
offers valuable experience on how to promote interaction between reforms and opening-up. The country
revised a total of 2,300 laws and regulations at the central level and more than 19,000 local ones to facilitate its bid for WTO membership,
according to data released by the Ministry of Commerce. On the fifth anniversary of its accession to the WTO in 2006, China had opened more
than 100 of its 160 service areas to the outside world in accordance with its WTO membership commitments, an opening-up degree that is
tantamount to that fulfilled by some developed countries. In particular, China fully kept its commitments and kept its hands away from the
pricing of almost all commodities and services except for the implementation of guidance prices for grains, finished oil and postal services. It
is
this commitment to giving the market a decisive role in the pricing of goods and services that has helped
China to further push forward market reforms and successfully make the transition from a planned
economy to a market economy. This transformation has forcibly driven China's economic development
and further narrowed the gap with developed countries. Many of the measures taken by China to
introduce a market mechanism and deepen reforms over the past decade have been related to its
efforts to deal with outside challenges that have resulted from its WTO membership. However, over the
past decade its comprehensive national strength and international influence and the competitiveness of
its companies have grown to their highest level in history. China's efforts for expanded opening-up since 1992 have
helped inject a huge vitality into its economy and the dividends from reform are far from being over. The
experiences of China's WTO membership indicate that opening to the outside world can become an important propulsive force for further
domestic reforms. Pushing for opening-up in the spirit of reforms and promoting reforms and development through deepening opening-up has
been an important experience for China over the past 30-plus years, as Vice-Premier Zhang Gaoli highlighted in March at a high-level Beijing
forum on China's development. More
efforts are needed than at any other time for China to continue the
interaction between reforms and opening up, he added. In March, during his first inspection tour of the Yangtze River
Delta after he took office, Premier Li Keqiang said that China still has a lot of room to use opening-up to promote a new
round of reforms to release "systematic dividends" and expand domestic demand. The active opening-up
strategy the government has vowed to adopt, as mapped out in the report delivered to the 18th Congress of the Communist Party of China in
November, means that the
country should be more active in pursuing new opening-up targets. China should
hold an active attitude toward the Trans-Pacific Partnership that the United States is vigorously pushing. Given that the
TPP sets higher requirements for membership, in terms of financial institutions, management of
enterprises and their competitiveness, more active involvement in free trade talks with the US and the
European Union would offer China a new and bigger driving force for a better domestic environment
and strengthen its protection of intellectual property rights. At a time when no substantial progress has been made in the
WTO-led Doha Round of negotiations, China, as the world's second-largest economy, should not turn a blind eye to
the TPP, a wide-ranging economic cooperation arrangement that has drawn worldwide attention.
Compared with other free trade or economic cooperation agreements, what the TPP advocates is complete demolition of tariffs
among member states, and it will not recognize "exceptionalism" in principle. If joined by Japan, it will account for 40
percent of the world's economic aggregates and become a new stage for the making of international
economic and trade rules. There is no denying that the TPP will help rejuvenate the US economy, facilitate
Washington's bid to return to the Asia-Pacific region and share the region's economic prosperity, and that it will boost its global
competitiveness, influence and dominance. China's active involvement in the TPP process would bring it
many challenges, but also opportunities. Excessive resistance to the TPP will be detrimental to China and
mean it will possibly let slip chances to take advantage of the TPP to push for deeper economic
institutional reforms and promote the better and faster development of its economy. TPP membership
would bring increased pressure on China to protect intellectual property rights and make greater efforts to conserve energy and reduce
emissions. It
would help China promote domestic innovations and sharpen its global competitiveness to
adapt to new international trade and investment rules. At the same time, participation in TPP talks at
an early date would help China avoid marginalization and gain a say in the making of its rules.
TPP good
global economy
TPP expansion is vital to global economic growth
Meltzer 12 - fellow in Global Economy and Development at the Brookings Institution and an adjunct
professor at the Johns Hopkins School for Advanced International Studies and at Georgetown Law
School. Dr. Meltzer is also a reviewer for the Journal of Politics and Law. His work focuses on
international trade law and policy issues relating to the World Trade Organization (WTO) and Free Trade
Agreements, S.J.D. and L.L.M from the University of Michigan Law School (Joshua, “The Significance of
the Trans-Pacific Partnership for the United States,” The Brookings Institution, 5/15/12,
http://www.brookings.edu/research/testimony/2012/05/16-us-trade-strategy-meltzer)//AC
Introduction Chairman Graves, Ranking Member Velázquez, honorable members of the committee, thank you for this opportunity to share my
views with you on U.S. trade strategy and what’s next for small business exporters. In 2011, it became clear that concluding the WTO Doha
Round in its current form is not possible. Efforts are therefore underway to make progress on parts of the Doha agenda and the
U.S. is
taking the lead in areas such as services liberalization. The Trans-Pacific Partnership (TPP) negotiations
are the only other trade negotiation to which the U.S. is a party. The TPP has the potential to be the
building block for a wider Free Trade Agreement of the Asia-Pacific Region (FTAAP) - a goal endorsed by APEC
Leaders at the 2006 APEC Summit in Hanoi. U.S. Trade Representative Ron Kirk reiterated this goal for the TPP at the most recent round of TPP
negotiations in Dallas this week.[1] Given the focus of the current administration on trying to complete the TPP negotiations this year and what
appears to be good progress so far, I will focus the rest of my testimony on the implications of the TPP for the U.S. and small business
exporters. The TPP builds on the original P4 Agreement between Brunei, Chile, Singapore and New Zealand which came into effect in 2006. In
2008, the Bush administration notified Congress of its intention to negotiate an FTA with the P4 countries. In the same year, Australia, Peru and
Vietnam joined what is now known as the TPP and Malaysia joined the negotiations in 2010. Concluding the
TPP will have important
economic and strategic benefits for the U.S. These benefits need to be understood in light of the TPP as
a template for a future Free Trade Agreement of the Asia Pacific, where the gains to the U.S. will
increase as more countries join the partnership.
The Economic Benefits to the U.S. from the Trans-Pacific Partnership
The Asia-Pacific region is of crucial importance for the U.S. It is the fastest growing region in the world
and a key driver of global economic growth . Indeed, the region already accounts for 60 percent of
global GDP and 50 percent of international trade. And the Asia-Pacific region is expected to grow by
around 8 percent this year.[2] In 2011, the TPP countries had a total GDP of $17.8 trillion, of which almost 85 percent comprised the
U.S. economy (see table 1 below). U.S. exports to current TPP members were worth approximately $105 billion in
2011, and imports were valued at $91 billion, meaning that the U.S. had a trade surplus with current TPP member
economies of almost $14 billion (see Table 2 below). These trade flows represent approximately 5 percent of total U.S. trade.
Economic modeling estimates that the benefits to the U.S. from the TPP will be $5 billion in 2015, rising
to $14 billion in 2025.[3] However, the economic benefits are likely to be larger as this figure does not
capture the impacts from investment liberalization under the TPP. Yet, the economic benefits for the U.S. from
concluding the TPP negotiations with the current members will be limited by the market access the U.S. already has under its existing free trade
agreements with Australia, Chile, Peru and Singapore. Moreover, already low U.S. tariffs on imports limits the gains to the U.S. since the main
benefits from trade liberalization accrue to the country liberalizing its trade. However and as noted, the
economic benefit for the
U.S. of the TPP needs to be viewed in terms of it being a pathway towards a FTAAP. In this respect, Canada,
Mexico and Japan have already expressed interest in joining the TPP. It is unclear at this stage whether these countries will
join the current negotiations or accede to a completed TPP. In either event, the addition of Canada, Mexico and Japan would
significantly increase the size of TPP GDP to $26.6 trillion, making it much more important in economic
terms for the U.S. Such a TPP agreement would cover almost $650 billion of U.S. goods exports and over
$800 billion of US goods imports, representing approximately 40 percent of total U.S. trade. The US also
stands to grow its services trade under a TPP agreement. There is limited data on services trade with Brunei, Peru and
Vietnam but for the other five TPP members U.S. services exports in 2010 were $28.9 billion and services imports were $13.5 billion, leaving the
U.S. with a services trade surplus of $15.4 billion. Including Canada, Mexico and Japan in the TPP would lead to the TPP covering US services
exports worth $148.3 billion and services imports of $76.4 billion. The
gains to the U.S. from these countries’ participation
would also double.[4] And should the TPP evolved into an FTAAP, the gains to the U.S. in 2025 would
increase to around $70 billion.
manufacturing
TPP liberalization is vital to US manufacturing
Meltzer 12 - fellow in Global Economy and Development at the Brookings Institution and an adjunct
professor at the Johns Hopkins School for Advanced International Studies and at Georgetown Law
School. Dr. Meltzer is also a reviewer for the Journal of Politics and Law. His work focuses on
international trade law and policy issues relating to the World Trade Organization (WTO) and Free Trade
Agreements, S.J.D. and L.L.M from the University of Michigan Law School (Joshua, “The Significance of
the Trans-Pacific Partnership for the United States,” The Brookings Institution, 5/15/12,
http://www.brookings.edu/research/testimony/2012/05/16-us-trade-strategy-meltzer)//AC
The Impact of the Trans-Pacific Partnership on Small Businesses and the Manufacturing Sector
The TPP should lead to increased opportunities for growth for American small business exporters. As a
starting point, the TPP will increase U.S. GDP and exports, and these benefits will increase as more
countries join. In fact, under a FTAAP, U.S. exports of manufactured goods are expected to increase by
almost $120 billion and services exports are expected to increase by almost $200 billion.[6] The TPP’s impact
on American small businesses and the U.S. manufacturing sector can also be inferred by looking at the impact of other free trade agreements.
For example, under the North American Free Trade Agreement (NAFTA)[7] and the U.S.- Central American-Dominican Republic Free
Trade Agreement (CAFTA-DR),[8] the U.S. has a trade surplus in manufactured goods of $12 billion and $3
billion, respectively.[9] In addition, U.S. exports of manufactured goods to NAFTA and CAFTA-DR countries
are growing faster than imports. These figures demonstrate that the U.S. manufacturing sector is world
class and highly competitive, and in many sectors the U.S. already operates behind low tariff barriers. Moreover, competition
from abroad has also driven U.S. productivity gains and has enabled American manufacturers to
source inputs from the lowest cost providers, further enhancing overall competitiveness. Further
trade liberalization under the TPP is therefore likely to provide additional opportunities for the U.S.
manufacturing sector overseas. U.S. small and medium-sized enterprises (SMEs) also stand to gain from
trade liberalization. In fact, almost 98 percent of all exporters and 97 percent of all importers are SMEs,
representing almost 40 percent of U.S. goods exports and 31.5 percent of goods imports.[10] In
addition, 94 percent of SMEs are exporters and importers. Therefore, trade agreements that liberalize
trade barriers, like the TPP, should disproportionately benefit SMEs. In contrast with large businesses, SMEs
generally benefit the most from government efforts to reduce trade barriers overseas as their capacity
to overcome these barriers by establishing subsidiaries in other countries is much more limited. Setting the
Trade and Investment Rules for the Asia-Pacific Region The economic gains to the U.S. from the current TPP members highlight the significance
of the TPP as a template for further economic integration in the Asia-Pacific region. As the TPP is an ongoing negotiation, the details of what is
being proposed have not been released. However, we do know that the recent Korea-U.S. FTA will be a baseline and that USTR is seeking
agreement on a range of new rules. For instance, in addition to including rules such as on goods and services, non-tariff barriers, investment
and intellectual property, the United States is seeking to include new rules on regulatory coherence to reduce trade barriers arising from
unnecessary regulatory diversity among TPP member countries. The U.S. is also seeking rules on state-owned enterprises in order to discipline
the trade distorting impact that they can have when they do not operated according to competitive market-based principles. The TPP should
also address the realities for American businesses that rely on supply chains located in different countries, often in the Asia-Pacific region.
Developing coherent rules of origin is one way of ensuring that the TPP reflects these business realities.
Progress on trade facilitation rules which reduce the costs of moving goods through customs is another
important one. The TPP can also provide an important framework for the U.S. to promote rules that can
protect the free flow of data across borders. The internet has become a key driver of trade, especially
for SMEs, as companies have been able to use the internet to access customers overseas and at
scale.[11] Getting these rules right is important as they will establish the framework for trade and
investment in the Asia-Pacific region. A rules-based trading system backed by an effective dispute
settlement mechanism, which increases market access and the certainty and predictability of
international trade and investment, will reduce risk and facilitate U.S. and global growth. Deepening U.S.
Economic Integration in Asia The TPP will also address the trend in the Asia-Pacific region toward regional economic integration that excludes
the United States. For instance, ASEAN has free trade agreements with China, Japan, South Korea, Australia and New Zealand. And
economic cooperation among ASEAN +3 (ASEAN, China, South Korea and Japan) has been closed to U.S.
participation. China, South Korea and Japan are also considering a trilateral FTA. These agreements divert trade from the
United States and the absence of U.S. participation in developing these trade rules undermines
American leadership in the region . Recent U.S. membership in the East Asian Summit (ASEAN+3, Australia, New Zealand, India
and Russia) should go some way toward addressing this problem, but the U.S. has so far not pursued economic integration
in the EAS. In this light, the TPP will be an important vehicle for the U.S. to pursue economic integration
in the Asia-Pacific region. Completing the TPP will be an economic complement to President Obama’s
declaration of a U.S. strategic “pivot” toward Asia.[12] It will build on the Korea-U.S. FTA which came into effect on March
15, 2012. As Secretary of State Hillary Clinton said recently, “One of the most important tasks of American statecraft over
the next decade will therefore be to lock in a substantially increased investment – diplomatic, economic,
strategic, and otherwise – in the Asia-Pacific region."[13]
asia/regionalism
TPP is good – links regions in the Asia-Pacific, sustaining the Asia Pivot, removes
harmful domestic regulatory policies, and it multilaterises regionalism
Capling and Ravenhill 11 - Ann Capling went to the University of Melbourne, John
Ravenhill went to the Research School of Social Sciences, Australian National University,
(“Multilateralising regionalism: what role for the Trans-Pacific Partnership Agreement?,
December 12, 2011
http://www.tandfonline.com/doi/pdf/10.1080/09512748.2011.634078)//sawyer
The TPP stands out among PTAs both in the Asia-Pacific region and around the world in a
number of distinctive ways. First, it is a ‘transregional’ agreement that aims to link countries in
four different regions in the Asia-Pacific. Second, it is seen as an important means of
keeping the US engaged in the western Pacific rim and, from Washington’s
perspective, it is a means of signalling the ‘return’ of the US to the region under the
Obama administration. Third, it aims to be a ‘21st century agreement’ that goes beyond
conventional market access negotiations to address domestic regulatory policies that have an
impact on trade and investment. Finally, it is intended to ‘multilateralise regionalism’ by
beginning to untangle the noodle bowl, being open to future accessions and serving as a
stepping stone to the long-term APEC goal of freeing trade among its member economies. The
participants, however, differ considerably in their negotiating priorities, as detailed in the
following section. US PTAs (with the exception of NAFTA) typically involve trade partners of
only minor importance to the American economy, underlining the fact that the central drivers of
US PTAs have been foreign policy and security objectives, not commercial considerations.
Washington’s interest in the TPP is consistent with this general pattern. It already has PTAs
with four of the TPP parties – Australia, Singapore, Chile and Peru – and the other four
participants are of minimal economic importance. Notwithstanding its limited commercial
importance in the near term, the TPP has become the centrepiece of US trade policy towards the
Pacific and a key element in Washington’s determination to ‘return to Asia’. In one sense, it is
reminiscent of one of the original goals of APEC, which was to keep the US engaged in the
region. Confronted with two proposals for East Asian architecture that would exclude the US –
ASEAN Plus Three and ASEAN Plus Six – together with growing concerns about increasing
Chinese economic and strategic dominance, the Obama administration has seized on the TPP as
a part of a broader strategy to re-engage with the region and to contain China’s
influence. In the words of Kevin Brady, the chair of the House Ways and Means trade subcommittee, the TPP ‘at least begins the process of positioning the U.S. as a counter-weight to
China in the Asia-Pacific region’ (quoted in M. Lewis 2011). Moreover, there is an expectation
that forward momentum in the TPP negotiations will create incentives for current nonparticipants to sign on, making it potentially a much more significant strategic as well as
economic agreement. As noted in the US Trade Representative’s policy agenda for 2011, ‘the
U.S. vision for the TPP is predicated on the long-term objective – shared by all TPP participants
– of expanding the group to additional countries in the Asia-Pacific region’ (United States Trade
Representative [USTR] 2011: 141). A second distinguishing feature of the TPP is the
determination of negotiators to craft a PTA that addresses 21st century trade issues, especially
the domestic regulatory constraints that affect the ability of firms to enter, operate in and exit
foreign markets. The phenomenon of Factory Asia is the exemplar of 21st century trade: the
unbundling of and spatial dispersion of production, made possible by trade liberalisation and
the technological revolution. Contemporary international commerce is conducted through
regional supply chains, and it involves not only trade in goods but also international investment
and infrastructure services (e.g. high-speed telecommunications, logistics, trade finance, express
delivery). Richard Baldwin (2011) characterises this as the ‘trade-investment-services’ nexus
that requires 21st century trade rules: increased levels of IP protection; investment assurances
including rights of establishment; and assurances on capital flows (FDI and profit repatriation),
the movement of people (technical and professional support) and the provision of world-class
infrastructure. As Baldwin says: ‘The bargain in a 21st century regional trade agreement is
“foreign factories in exchange for domestic reforms” not “exchange of market access” as was the
case for 20th century RTAs.’ In practical terms, this means that in addition to dealing with
traditional issues (e.g. market access for goods and services and related disciplines such as
ROOs, customs procedures, sanitary and phytosanitary measures, trade remedies and technical
barriers to trade), the TPP will also include disciplines for 21st century trade issues, especially in
areas such as investment, IP, government procurement (GP) and trade facilitation. Here, a
major aim of the Obama administration is to create standards that could eventually be brought
into the WTO. Alongside these issues, the US Congress will insist that environmental protection
and labour standards be included in the TPP, as they are in all of the new generation of US
agreements. On the face of it, the demand for a 21st century agreement should not pose a major
difficulty for TPP negotiators because the P4 agreement already has provisions in most of these
areas. However, with only a few minor exceptions, the P4’s treatment of ‘new’ trade issues does
not impose any new or onerous obligations on participants. For example, apart from provisions
that protect the geographical or varietal names of some Chilean wines, the IP provisions do not
go beyond existing WTO commitments. The competition policy chapter is expressed in ‘best
endeavours’ language and is not subject to dispute settlement. Moreover, the side agreement on
environmental protection and the memorandum of understanding on labour cooperation are
excluded from the main agreement, are expressed in hortatory language and do not create
legally binding commitments. The P4 provisions consequently fall well short of the expectations
of US negotiators, who see the TPP as an opportunity to create a new ‘gold standard’ agreement.
The provisions of the recently concluded (but not yet ratified) Korea-US Free Trade Agreement
(KORUS) provide a good indication of the type of agreement that Washington will be seeking in
the TPP. For example, the KORUS rules for IP are ‘WTO-Plus’ and require Korea to extend
copyright from the 50 years required by the WTO to the US standard of 70 years. In contrast,
four of the TPP partners – Chile, Malaysia, Peru and Vietnam – are on the USTR ‘watch list’
because of their failure to enforce IP rights; the USTR has also criticised Brunei for its alleged
high rates of piracy (Fergusson and Vaughn 2010: 14). In relation to core labour and
environmental standards, KORUS has specific, binding and justiciable commitments. The
KORUS chapter on the environment requires parties to ratify and implement seven multilateral
environmental agreements. Similarly, the chapter on labour requires parties to uphold the
International Labor Organization Declaration on Fundamental Principles and Rights at Work
and its Follow-up (1988). These are much tougher obligations than are found in the P4. But they
are widely supported among congressional Democrats, leaving the Obama administration with
very little wiggle room. Consequently, if the TPP negotiations are to be successful, the agreement
will most certainly conform to the current US template. But there are other aspects of the TPP
that go beyond the US template, notably provisions pertaining to trade facilitation, economic
cooperation and development. Alongside the traditional negotiating groups for goods and
services is a negotiating group that is responsible for the ‘new, crosscutting, 21st century issues
including the promotion of business competitiveness; the facilitation of small and medium
enterprise (SME) participation in international trade; the deepening of production and supply
chain linkages; the enhancement of regulatory coherence to promote trade; and the promotion
of development’ (DFAT 2011). Some of this agenda is foreshadowed in the P4, which has a
‘strategic partnership’ chapter that establishes a framework for cooperation across a broad range
of areas, including education, primary industries, research, science and technology, but the TPP
is expected to push the trade facilitation agenda much further. While it is too early to predict
what will transpire in relation to these cross-cutting issues, it is certainly a novel development in
Asia-Pacific PTAs.The potential for economic gains in ‘WTO Plus’ areas, the direct economic
impact of the agreement is likely to be limited because the negotiations currently involve
countries that are already relatively open and, with the exception of the US, relatively small. The
likely minor contributions to welfare from tariff removal are reflected in calculations on the
value of gains from abolition of tariffs among the P4 members (see Table 1, which presents
benefits from the NZ perspective). Furthermore, many of the TPP members already have PTAs
with each other (see Figure 1) and whatever the aspirations to improve on existing agreements
through the TPP, the additional welfare contribution from greater liberalisation is likely in
aggregate to be small. More important than short-term economic gains, particularly
those from improved market access, is the potential for the TPP to begin to tame
the tangle of PTAs in the region and to promote integration that is both broader
and deeper in a way that is supportive of the objectives of APEC and the WTO. In
announcing the Australian government’s decision to join the TPP negotiations, for instance,
Trade Minister Simon Crean emphasised the importance of “‘knitting together” bilateral trading
arrangements’ and ‘harmonising the rules in these various FTAs’ in order to make them
consistent with the multilateral trade system (Crean 2008). Indeed, the TPP is the first
serious attempt to deal with the noodle bowl problem in the Asia-Pacific. Thus, it
offers the possibility of ‘multilateralising regionalism’ by enlarging existing
agreements, by adding new members or by replacing existing agreements with new
agreements that have a greater number of members. Figure 1, which shows the existing bilateral
and plurilateral PTAs among the TPP participants, provides a good illustration of the noodle
bowl effect that the TPP might overcome.
TPP is key to economic growth, trade, Asian pivot
Petri et al 12 -Peter A. Petri is a visiting fellow at the Peterson Institute for International
Economics, the Carl J. Shapiro Professor of International Finance at the Brandeis International
Business School, and a senior fellow at the East West Center in Honolulu, Hawaii. Michael G.
Plummer is the Professor of International Economics at the Johns Hopkins University, SAISBologna, and a senior fellow at the East-West Center , (“The Trans-Pacific Partnership and
Asia-Pacific Integration: Policy Implications”, June 2012,
http://xxx.iie.com/publications/pb/pb12-16.pdf)//sawyer
The Trans-Pacific Partnership (TPP) agreement, now in negotiation among nine Asia-Pacific
countries, could yield annual global income gains of $295 billion (including $78 billion for
the United States) and offers a pathway to free trade in the Asia-Pacific with potential
gains of $1.9 trillion. The TPP’s expected template promises to be unusually productive because
it offers opportunities for the leading sectors of emerging-market and advanced economies. An
ambitious TPP template would generate greater benefits from integration than less demanding
alternatives, but it will be harder to sell to China and other key regional partners as the TPP
evolves toward wider agreements. The importance of Asia-Pacific integration argues for an early
conclusion of the TPP negotiations, without jeopardizing the prospects for region-wide or even
global agreements based on it in the future. The Trans-Pacific Partnership (TPP), currently at an
advanced stage of negotiation, began as a small agreement but now has big implications.1 The
TPP would strengthen ties between Asia and the Americas, create a new template for the
conduct of international trade and investment, and potentially lead to a comprehensive free
trade area (FTA) in the Asia-Pacific. It could generate large benefits—greater than those
expected from the World Trade Organization’s (WTO) global Doha Development
Agenda. This Policy Brief reports on our ongoing quantitative assessment (with Fan Zhai) of the
TPP and other Asia-Pacific integration efforts.2 Since the last major multilateral trade
agreements were concluded nearly two decades ago, the action on trade rules has shifted from
global to bilateral and regional agreements. In 2000 there were six trade agreements among
member economies of the Asia Pacific Economic Cooperation (APEC) forum; today there are
47, with more in the works. Groups of “like-minded” partners appear better able to reach
agreements that achieve mutual gains, address wider issues, and mitigate opposition. The WTO
reports 319 such agreements now in force worldwide.3 Renewed progress on trade and
investment rules could prevent backsliding on existing agreements and generate
much-needed engines for global economic growth .4 For now, regional negotiations
offer the best options for making such progress. Against this challenging background, the
United States and eight (potentially 11) partners on both sides of the Pacific are working to
shape the TPP into a cutting-edge, 21st century agreement. US participation, first proposed by
President George W. Bush, has become a centerpiece of President Barack Obama’s trade policy.
The negotiation is complicated and ambitious in terms of issues and membership.5 If
successful, it could stimulate trade by benefiting the competitive industries of
both emerging-market and advanced economies. And it could yield an innovative model
for consolidating the “noodle bowl” of existing trade agreements.6 The TPP is a crucial step on
what is becoming a “TransPacific track” of trade agreements. The track already includes the P4
agreement among Brunei, Chile, New Zealand, and Singapore and many bilateral agreements
spanning the Pacific. A parallel “Asian track” includes a major cluster of agreements centered
on the Association of Southeast Asian Nations (ASEAN), negotiations among China, Japan, and
Korea, and proposals for pan-Asian FTAs. The Trans-Pacific and Asian tracks are already
stimulating mutual progress. The TPP may have been motivated by past Asian agreements, and
it appears to have led to a new investment agreement among China, Japan, and Korea and to
the expected launch of free trade negotiations among the three later in 2012. Free trade
agreements often have geopolitical objectives, and the Asia-Pacific tracks are no exceptions. The
TPP emerged as a US priority some years ago, but it has recently become
identified with the “rebalancing” of US foreign policy toward sustaining a US
presence in Asia. Asian agreements, in turn, have aimed to promote the ASEAN Economic
Community, improve political relations in Northeast Asia, and define “space” for an emerging
China. Much commentary in the press and from academic observers has focused on these
political issues and, more often than not, has viewed them from a zero-sum perspective. For
example, the TPP has been portrayed as an effort to contain China, “a kind of economic warfare
within the Asia Pacific region.”7 Meanwhile, some American observers describe Asiaonly agreements as attempts to establish Chinese hegemony in the region at the
expense of a US role.8 These harsh perceptions are amplified by interest groups that
attempt to influence the negotiations. Whatever the merits of such political narratives,
economics suggests much more constructive interpretations. The TPP and Asian tracks are
large, positive-sum projects that promise substantial gains to all participants. Together, they
are a dynamic process—an example of competitive liberalization—that could lead to better rules
for Asia-Pacific and perhaps global trade. To be sure, the interests of countries diverge in many
details. Asian emerging-market economies, for example, prefer to focus liberalization on goods
trade and allow extensive exceptions for sensitive products. Advanced countries, in turn, favor
comprehensive liberalization and coverage of “new” issues that affect their leading sectors. But
importantly, these divergences mainly affect the sharing of what could become a much larger
pie. From the viewpoint of large economies like the United States and China, the benefits from
the smaller regional trade agreements have less to do with immediate gains than with their
influence on the future trading system. Thus, the much remarked competition between the
Trans-Pacific and Asian tracks appears to be a “contest of templates” for organizing future
cooperation, not economic warfare between them. From an economic perspective, neither
group of countries would benefit from dividing the region into blocks, but each could gain from
rules that improve the terms of trade for its strongest sectors. The tracks can be considered
moves in a strategic game; they are “disagreement points” in a bargaining process with large
positive-sum results. The contrast in templates can be documented. Our research shows that
recent US and ASEAN trade agreements have both included large eventual reductions in tariff s
(96 and 90 percent of most favored nation [MFN] levels, respectively), but Asian agreements
have been slower to take effect and have more exceptions. There are even more marked
differences between templates in approaching nontariff barriers. We used detailed information
from the text of past agreements to “score” provisions on 21 issues, accounting for the
proportion of potential disciplines covered, the depth of such coverage, and the enforceability
of provisions. As figure 1 shows, US agreements had higher scores than ASEAN agreements on
average, and especially in provisions related to competition, intellectual property rights,
government procurement, stateowned enterprises, and labor. ASEAN agreements had higher
scores than US agreements in a few areas, including dispute resolution and cooperation
(typically provisions on capacity building). Neither set of agreements received high marks on
small and medium enterprises and science and technology, areas that are also expected to be
covered by the TPP. What explains these differences? As already noted, Asian templates are
negotiated by mainly emerging-market economies with comparative advantages in
manufacturing—hence the focus on market access for goods. The templates negotiated by the
United States reflect the interests of advanced economies in services, investment, and
intellectual property, and sometimes agriculture. They also emphasize rules-based approaches
that are common in a developed-country institutional setting. Both templates include measures
to attract domestic political support, but those too reflect their political setting: Asian
agreements focus on cooperation and technology, and US agreements on labor and the
environment. Since potential gains from trade are especially significant among diverse
economies, the ideal template will offer market access for the manufacturing industries of
emerging-market economies as well as good rules for the service, investment, and technology
sectors of advanced countries.9 Asian templates prepare the ground for cooperation by
addressing primarily goods liberalization, but the TPP is likely to go further by
liberalizing sectors that lead in both types of economies, thus expanding
opportunities for trade between them. Advanced economies led the liberalization of
goods trade in earlier global rounds and are now seeking similar access for industries in new
areas of comparative advantage. The economic case for a comprehensive template is not that it
represents US interests (although that will be the argument made in US politics) but that it
expands the scope of liberalization and thus potential gains to all participants. Despite its
advantages, a comprehensive agreement among all major Asia-Pacific economies does not
appear to be feasible in the current macroeconomic and political context. Thus, China is
unlikely to agree now to various concessions—on state-owned enterprises, services, intellectual
property, and labor—that the United States would likely demand to open its markets further.
japanese lng
The TPP will increase LNG exports to Japan
Drajem and Klump 13 - Mark Drajem and Edward Clump are reporters for Bloomberg
News,(“ Japan’s Bid to Enter Trade Talks Opens Route For U.S. LNG”, March 17, 2013,
http://www.bloomberg.com/news/2013-03-17/japan-s-bid-to-enter-trade-talks-opens-routefor-u-s-lng.html)//sawyer
Japan’s bid to join negotiations for the Trans-Pacific Partnership trade agreement
may make it easier for the nation to import U.S. liquefied natural gas, a prospect that
is raising the hackles of environmental groups. Japan, the world’s largest LNG importer, said
March 15 that it wants to be included in the accord, which now encompasses 11 nations in Asia
and the Americas. Bringing Japan into a free- trade agreement may boost companies
trying to export natural gas from the U.S., according to Randy Bhatia, an analyst with
Capital One Southcoast in Houston. The Energy Department is reviewing 16 applications to
build export terminals to ship supplies to countries that don’t have free-trade agreements with
the U.S. Among the companies seeking to export gas are Sempra Energy (SRE) of San Diego and
Dominion Resources Inc. (D) of Richmond, Virginia.Cheniere Energy Inc. (LNG) has won
approval for a facility that would begin exporting in 2015. “Japan has been very clear that
automatic access to LNG is one of the things they want,” Ilana Solomon, trade representative for
the Sierra Club in Washington, an environmental group fighting those exports, said in an
interview. Success for Japan would mean “we’ll be paying the price here, with more fracking in
our backyards, near our schools, and next to our hospitals -- only to help a handful of big gas
companies profit by shipping natural gas overseas.” Incorporating Japan in the trade agreement
would unite one country seeking new markets for booming supply with another nation
desperate for imports to help it replace nuclear plants. Japan is increasingly reliant on
imported gas for electricity, following the March 2011 tsunami that damaged several
nuclear reactors, and it’s relying on supplies from countries such as Malaysia, Russia, Qatar,
Australia and Indonesia, according to the U.S. Energy Information Administration. The U.S.
is not one of its top suppliers now . Tokyo Electric Power Co. (9501), Japan’s largest
utility, Chubu Electric Power Co. (9502) and trading company Sumitomo Corp. (8053) all have
agreements to buy LNG, gas cooled to a liquid for shipment by tankers, from proposed export
plants that have yet to win government approval. In the U.S., booming shale-gas output has
driven prices below those in much of Asia and Europe, creating an incentive for producers such
as Exxon Mobil Corp. (XOM), for more exports. In Japan, imported LNG prices averaged almost
$16.70 per million British thermal units, a measure of energy output, last year compared with
about $2.83 per million But in U.S. natural- gas futures trading in New York. “The history of
world trade since the dawn of civilization is that commodities, labor and finished goods move
from where it is cheap to where it is expensive,” Walter Zimmerman, chief technical strategist at
United-ICAP, a brokerage in Jersey City, New Jersey, said in an interview. Given the current gap
between U.S. and overseas prices, “it’s going to take quite a bit of movement to equalize this.”
Gas exports to most nations with U.S. free-trade agreements are largely exempt from Energy
Department clearance. Shipping supplies to all other nations requires a government review, and
a finding that those overseas sales are in the public interest. So far two nations with free-trade
accords with the U.S. -- Costa Rica and Israel -- aren’t covered by the natural-gas exemption,
according to Bill Cooper executive director of the Center for Liquefied Natural Gas in
Washington. For other free- trade partners “that authorization to export the commodity is
automatic,” he said.
LNG exports will increase US-Japanese cooperation
Armitage and Nye 12 -Richard L. Armitage is president of Armitage International and a
trustee of CSIS. From 2001 to 2005, he served as U.S. deputy secretary of state, He is also a
member of the American Academy of Diplomacy. He was most recently awarded the
Department of State Distinguished Service Award and has received the Department of Defense
Medal for Distinguished Public Service four times, the Secretary of Defense Medal for
Outstanding Public Service, the Chairman of the Joint Chiefs Award for Outstanding Public
Service, the Presidential Citizens Medal, and the Department of State Distinguished Honor
Award, Joseph S. Nye is dean emeritus of the Kennedy School of Government at Harvard
University and a trustee of CSIS. He received his bachelor’s degree summa cum laude from
Princeton University in 1958. He did postgraduate work at Oxford University on a Rhodes
scholarship and earned a Ph.D. in political science from Harvard University. Dr. Nye has also
taught for brief periods in Geneva, Ottawa, and London and has lived for extended periods in
Europe, East Africa, and Central America. He is the author of numerous books, including The
Future of Power (PublicAffairs, 2011), The Powers to Lead (Oxford University Press, 2008), and
Soft Power: The Means to Success in World Politics(PublicAffairs, 2004), (“The U.S.-Japan
Alliance”, August 2012,
http://csis.org/files/publication/120810_Armitage_USJapanAlliance_Web.pdf)//sawyer
Recent positive developments in natural gas could rekindle bilateral energy trade
in ways few thought possible just a few years ago. The discoveries of large new shale gas
reserves in the lower 48 states have made the United States the world’s fastest growing natural
gas producer. The International Energy Agency (IEA) noted that the planned expansion of the
Panama Canal in 2014 would enable 80 percent of the world’s liquefied natural gas (LNG) fleet
to use the canal, dramatically lowering shipping costs and making LNG exports from the U.S.
Gulf Coast dramatically more competitive in Asia.2 The shale gas revolution in the continental
United States and the abundant gas reserves in Alaska present Japan and the United States with
a complementary opportunity: the United States should begin to export LNG from the lower 48
states by 2015, and Japan continues to be the world’s largest LNG importer. Since 1969, Japan
has imported relatively small amounts of LNG from Alaska, and interest is picking up in
expanding that trade link, given JHowever, companies in the United States seeking to export
LNG to a country that does not have a free trade agreement (FTA) with the United States, and
more specifically a gas national treatment clause in its FTA, must first get approval from the
U.S. Department of Energy (DOE) Office of Fossil Energy. Sixteen FTA countries, receive DOE
export approval (although other regulatory and permitting requirements apply), but most of
these are not major LNG importers. For non-FTA countries like Japan, the permit is granted
unless DOE concludes it would not be in the “public interest” of the United States. The Kenai
LNG terminal routinely received DOE permits to export from Alaska to Japan. But as the
potential for LNG exports from the lower 48 states emerges, DOE’s permitting process is
coming under political scrutiny. In addition to the Sabine Pass LNG project, which already
received a DOE non-FTA permit, there are eight other permits for LNG projects in the lower 48
waiting for DOE approval. Activists oppose LNG exports on environmental or economic
grounds. There are concerns that exports will raise domestic U.S. natural gas prices and weaken
the competitiveness of domestic industries that rely heavily on natural gas. A recent policy brief
by the Brookings Institution refuted this claim and concluded that the likely volume of future
exports will be relatively small compared to total U.S. natural gas supply, and the domestic
price impacts would be minimal and not undermine wider use of gas for domestic, industrial,
and residential uses.3 Limiting LNG exports needlessly deters investment in U.S. shale gas and
LNG export projects. The United States should not resort to resource nationalism and
should not inhibit privatesector plans to export LNG. U.S. policymakers should
facilitate environmentally responsible exploitation of these new resources while
remaining open to exports. Moreover, in a time of crisis for Japan, the United
States should guarantee no interruption in LNG supply (barring a domestic national
emergency that the president would declare) going to Japan under previously negotiated
commercial contracts and at prevailing commercial rates, ensuring a constant and
stable supply. As part of the security relationship, the United States and Japan
should be natural resource allies as well as military allies. This area of cooperation
remains insufficiently developed. Further, the United States should amend current legislation
inhibiting LNG exports to Japan. Ideally, Congress would remove the FTA requirement for an
automatic permit, creating a rebuttable presumption that LNG exports to any country with
which we enjoy peaceful relations are in the national interest. Alternatively, Congress
should deem Japan to be an FTA country for purposes of LNG exports, putting Japan on an
equal footing with other potential customers. At the very least, the White House should fully
support and prioritize export projects associated with Japan as it considers permits under
current law. With proper policy support, natural gas can revitalize bilateral trade and also
increase Japan’s foreign direct investment (FDI) in the United States. While the gas supply in
North America is significant, there are concerns that the United States lacks adequate terminal,
port, and associated onshore transportation systems needed to handle potential tanker traffic.4
Without large infrastructure investments, U.S. gas production cannot grow. This is yet another
valid reason for amending the law to grant Japan equal footing with other FTA customers for
U.S. natural gas.
japanese ag
The TPP will trigger reforms and a revitalization of Japanese agriculture
TR 13 – The Rural brings you news and articles about New Zealand's agricultural
community, farming industry and lifestyle block living. Advice, tips, how-to guides and
comment on rural matters from farmers, hunters, and other rural industry insiders,
(“Trans Pacific Partnership could revitalise Japan's agriculture sector”, May 23, 2013,
http://www.therural.co.nz/farming-how-to/trans-pacific-partnership-could-revitalisejapans-agriculture-sector)//sawyer
Research released by the New Zealand Asia Institute today has found that Japan joining the
Trans Pacific Partnership (TPP) could potentially trigger a revitalisation of its
agriculture sector. The independent research, funded by Fonterra, was conducted by
Professors Hugh Whittaker and Rob Scollay from The University of Auckland. They investigated
the potential implications of the TPP on the Japanese agricultural sector, which is a proposed
free trade agreement under negotiation between 12 countries including New Zealand and also
Japan, who only joined earlier this year. Professor Scollay said: “The Japanese agricultural
sector faces a number of challenges. Many small-scale farms are uneconomic while the average
age of Japanese farmers and the area of abandoned farmland are both increasing alarmingly.”
Meanwhile falling per capita consumption of Japanese farm products combined with large
projected future falls in Japan’s population underline the need to transform Japan’s agriculture
into a more competitive sector with export potential. “Our research found that
participation in TPP could actually be the trigger needed to revitalise and
transform Japan’s agriculture into a more vibrant and productive sector with
long-term growth potential.” Economic modelling indicated that increased
exposure to competition through participation in the TPP, and increases in the
productivity of Japanese agriculture through reform , could play complementary roles
in sustaining agriculture and the food processing industries in Japan. Fonterra’s Director Policy
and Advocacy, Sarah Paterson, said Fonterra decided to fund the research because it wanted to
ascertain from an independent source the potential impacts the TPP might have on the
agriculture industry in Japan after previous opposition coming from the sector. “Importantly,
the study highlights that Japan’s agricultural sector could be better off as a result of TPP. We
also believe that reducing trade barriers not only benefits their agricultural sector but will have
flow on effects to the end consumer as well, where they’ll be able to enjoy greater choice and
more competitively priced food,” said Paterson.
AT: collapses industries
The TPP will have a net-beneficial effect – your criticisms are based on protectionist policies which will
inevitably collapse – the TPP is key to a stable transition
Yan 7/24/13 – Staff Writer for the Malaysian Insider (Tay Tian, “The philosophy of half-filled glass,” The
Malaysian Insider, 7/24/13, http://www.themalaysianinsider.com/sideviews/article/the-philosophy-ofhalf-filled-glass-tay-tian-yan)//AC
The Trans-Pacific Partnership (TPP) doesn’t seem to have much to do with people in the street, but its influences could be far beyond what
most would imagine. Some experts are of the opinion that this TPP
is going to be the most vital regional talk in process,
and could be the most important trend for global trade. Under the TPP Agreement, countries encircling
the Pacific Ocean will be forming a free trade bloc where zero tariff will be implemented among
member states within ten years. So far countries that are participating in the TPP talks include the Unite States, Mexico, Canada,
Australia, New Zealand, Chile, Singapore, Vietnam and Brunei. Japan is expected to join in the talks within days. Malaysia is also a part of this
TPP framework and the latest round of talks is currently held in Kota Kinabalu, Sabah. The importance of TPP lies in the fact that member
countries will have to open up their markets and dismantle any tariff obstacles. This means that the
marketplace will be expanded and billions of dollars worth of business opportunities await. It is
preliminarily estimated that the TPP will make up about 35% of global total trade. That said, TPP also brings
on stiffer competition as various protective measures will not have a place under the TPP framework.
Companies from all member states will have to compete among themselves on the same platform . For
instance, Malaysia will have to open up its automobile market, and our national car makers are expected to lose their current
competitive edge in the country. Mega projects and protected sectors such as finance, legal services, telecommunication will all
have to brace for foreign competition. Foreign goods and services will gain easier access into Malaysian market. In a similar manner,
Malaysians products will also stand better chances of penetrating foreign markets, and this is expected
to boost our industrial development while exploring new trade growths. Of course, a prerequisite is that we must have
the competitiveness. So, is this TPP a boon or bane to local businesses? Well, it is like a half-filled glass whereby someone
would say another half glass of water could be added while others lament that the glass is only half filled. Among the opponents, the Malay
Chamber of Commerce and the Muslim Consumer Association of Malaysia have already applied pressure on the government, mainly because
they are worried new rivals will also vie for the government’s mega projects. Meanwhile, the private sector players are also equally concerned.
They are worried an opened market would unfavourably impact the domestic market, especially the
SMEs. While there are justifications for the opposing voices, the opponents have largely based their
arguments upon the foundation of protectionism. The problem is, we are an open economy with a very
large trade ratio. This, coupled with our relatively small domestic market, makes it hard for our economy
to be propelled by domestic demands alone. If we were to try to insulate ourselves in our own
protective shell, we will sooner or later find ourselves unable to survive in this globalised world . On
the contrary, if we tone up our competitiveness and courageously brace the external challenges, vast
business opportunities are waiting for us. Moreover, our reforms can only be effectively implemented if we join the global
competition in the place of protective measures, and rectify the various inequitable policies such as the bumiputra privileges. This is yet
another opportunity that TPP may promise this country.
2ac stuff
AT: NAIF / North American integration
Plan solves the net benefit better - TPP supply chain integration with Mexico makes
NAFTA globally competitive
Kaufman 1/23 – Staff Writer IIP Digital, US Embassy (Stephen, “U.S. Seeking Deeper Trade
Relationship with Mexico,” 1/23/13,
http://iipdigital.usembassy.gov/st/english/article/2013/01/20130123141355.html#axzz2a5EWnmS8)//S
JF
Washington — U.S. Assistant Secretary of State for Economic and Business Affairs Jose Fernandez says
the United States endorses Mexican President Enrique Peña Nieto’s call for increased economic
integration in North America and that more bilateral partnership will increase the business
competitiveness of the continent on the global stage.
Speaking January 18 at the Washington Foreign Press Center, Fernandez said he is leading a U.S.
delegation to Mexico during the week of January 21 to find ways the United States and Mexico can
expand what he said is already a “broad and deep economic relationship” between the two countries.
“We will explore how we can support the government of Mexico’s ... efforts to improve economic
competitiveness, how we can enhance business-to-business ties, how we can promote innovation, and
how we can enhance cooperation in areas like transportation, infrastructure and trade,” Fernandez said.
In 2012, bilateral trade levels reached $460 billion, or about $1.25 billion per day, and Fernandez said
Mexico is the second-largest U.S. export market and its third-largest source of imports, as well as its
third-largest supplier of energy. He added that trade levels have quadrupled since the North American
Free Trade Agreement (NAFTA) between Mexico, Canada and the United States came into force in 1994.
All three countries are also participating in the Trans-Pacific Partnership (TPP) and can use each other’s
supply chains to export goods to the other eight participating TPP countries, he said.
With Latin America, and Mexico in particular, “we are at a unique point in our relationship,” and
Fernandez said it is “a moment of opportunity” to increase economic integration among NAFTA partners
in order to make NAFTA “much more competitive on a global basis.”
U.S. officials “very much endorse … President Peña Nieto’s call to make economic, trade, investment
issues real core components of a bilateral relationship,” he said.
Through trade relations, Mexican and U.S. companies have integrated many products by combining
components from both countries in the assembly of products, adding value, and selling the finished
goods to each other.
“This is a partnership where we make things together. We are partners in an integrated enterprise
whose fortunes depend on the successful collaboration with one another,” Fernandez said.
U.S.-Mexico trade must be based upon mutual advantage in order to serve as the basis for a lasting
relationship, with both governments working together to create mutual advantages and jobs for their
citizens, he said.
“Trade creates jobs, and if we can make it easier for countries to trade, if we can make it easier for
countries to invest, if we can make it easier for countries to produce goods that have competitive
advantages with other parts, other regions of the world, we will help both countries,” Fernandez said.
Mexico is in a unique position to determine the success of negotiations – spurs
regional integration with world markets and bolsters NAFTA
Kotschwar 5/1 – research fellow, Peterson Institute for International Economics, focuses on Latin
American trade, investment, and regional integration (Barbara, “Obama’s Trip to Mexico: Building on
NAFTA to Broaden Trade with Asia,” 5/1/13, http://www.piie.com/blogs/realtime/?p=3560)//SJF
Mexico’s reforms are important to the United States. President Obama has acknowledged this point in
an interview with Americas Quarterly magazine, emphasizing the contribution the new measures can
make to improve the US-Mexico economic partnership and joint efforts to improve international
competitiveness. Not only does Mexico represent the second largest market for US exports, buying
more than $224 billion of US goods in 2011, it is an essential link in the North American supply chain,
particularly in autos. Mexico has also come into its own as an investor in the US market. In 2011, the
United States attracted about $13.8 billion in Mexican foreign direct investment. Cemex, the Mexican
cement company, now makes up more than 10 percent of this segment of the US market. School
children open their lunch box to find sandwiches made with bread from Mexico’s Grupo Bimbo, which
bought Sarah Lee in 2010.
The timing of President Obama’s trip is fortuitous for the signal it will send to pushing reform forward.
While the Mexico-US economic relationship continues to be strong, Mexico’s reform agenda can add
momentum to the Trans-Pacific Partnership (TPP) negotiations, which have also been joined by Canada.
A first priority should be to deepen the North American economic relationship just as the North
American Free Trade Agreement (NAFTA) celebrates its 20th birthday next year. NAFTA has spurred
economic growth on all sides, but it is also a product of its times—an artifact of the economic reality of
the 1990s. The new reality of the second decade of the 21st century is the negotiations over the TPP,
underscoring the importance of the Asia Pacific region to North America. Mexico’s participation in the
Pacific Alliance, a trade grouping of Pacific-oriented Latin American economies moving to knit together
common trade provisions and extend their ties with Asia, as well as its initiative to harmonize its trade
deals with Central American countries, complement the growing role of Asia in spurring economic
progress in the Western Hemisphere. Presidents Obama and Peña Nieto can help advance both of their
economic agendas by taking steps to further deepen NAFTA within the context of the TPP so that North
American supply chains can use this agreement as a solid ramp to global supply chains. NAFTA has
already eliminated most barriers to trade and investment. Now it can spur the region to greater
competitiveness in world markets.
Joint negotiations create a platform to renegotiate NAFTA and foster greater North
American integration
Farnsworth 12 – Vice President, Council of the Americas (Eric, “What Should the Top Priority Be for
U.S.-Mexican Relations?”, 12/6/12, http://www.huffingtonpost.com/eric-farnsworth/top-priority-usmexico_b_2245025.html)//SJF
My response was as follows:
"Should be" and "will be" have frequently been two very different things in the U.S.-Mexico bilateral
relationship. The coming year offers the opportunity for a new approach.
For their own domestic purposes and in the wake of their respective elections, the United States should
quickly tackle immigration reform while Mexico should liberalize its energy sector.
In terms of the bilateral relationship, however, both governments (including their legislatures) should
recognize the nature of economic integration that has occurred since NAFTA, making our two economies
virtually inseparable, along with Canada, as a joint production platform. This new reality should both be
celebrated and also enhanced. Joint approaches within the Trans-Pacific Partnership negotiations can be
a means to achieve NAFTA 2.0. If coupled with a North American approach to potential trade
negotiations with the EU, North American economic integration can advance to a point unthinkable
even a few short years ago. With continued economic and commercial pressure from China, India, and
elsewhere, this approach will support the long-term economic well-being of the United States and North
America more broadly.
A joint economic agenda is now more achievable than before. The Hispanic community in the United
States has found its voice politically, manufacturing is returning to the United States due to lower prices
for natural gas, and, despite ongoing concerns about violence and the drugs trade, Mexico is doing well
enough economically to entice investors back from China. Now is perhaps the best opportunity in recent
memory to intensify economic collaboration. It should be the top bilateral priority.
AT: Critique alternatives
The TPP is inevitable – their alternative is hopeless
Couts 12 - Staff Writer for Digital Trends, Andrew Couts covers a wide swath of consumer technology
topics, with particular focus on the intersection of technology, law, politics, and policy (Andrew, “State
of the Web: Will U.S. Internet users rally against the TPP? Not likely,” Digital Trends, August 28, 2012,
http://www.digitaltrends.com/web/fight-against-trans-pacific-partnership-tpp/)//AC
At the end of next week, the United States Trade Representative (USTR) will host the 14th round of negotiations surrounding a multilateral
trade treaty known as the Trans-Pacific Partnership Agreement (TPP). The negotiations will last 10 days, from September 6 through 15, in
Leesburg, Virginia. At present, 11 countries are involved in the TPP negotiations: Australia, Peru, Malaysia, Vietnam, New Zealand, Chile,
Singapore, Brunei, Mexico, Canada, and the United States. Japan also plans to join the TPP. And countless “stakeholders” — corporations, nongovernmental organizations (NGOs), Members of Congress, and others — are also involved in the talks. The general public — those affected by
implementation of the TPP — have not been invited. How
the TPP targets the Web As with the contentious AntiCounterfeiting Trade Agreement (ACTA), which was largely shut down by the European Parliament on
July 4, the TPP negotiations are highly secretive, and the exact text of the treaty is all but unknown.
There have, however, been some leaks — most notably, that of the chapter on intellectual property
(pdf) and its frightening article 16. Last Friday, the Electronic Frontier Foundation (EFF) outlined the problems the TPP
could cause for the Internet — problems disturbingly similar to those found in ACTA and the currentlydefunct Stop Online Piracy Act (SOPA), like potential censorship of legitimate speech, innovationhampering regulation of the Web, a mandate for Internet service providers (ISPs) and intermediaries (like
Google, Facebook, and any other website) to monitor Web activity and block access to websites accused of
copyright infringement or the facilitation of infringement, and the requirement that ISPs cut Internet
access to users allegedly engaged in online piracy. “Private ISP enforcement of copyright poses a serious threat to free
speech on the Internet, because it makes offering open platforms for user-generated content economically untenable,” write Carolina Rossini
and Kurt Opsahl of the EFF. “For example, on an ad-supported site, the costs of reviewing each post will generally exceed the pennies of
revenue one might get from ads. Even obvious fair uses could become too risky to host, leading to an Internet with only cautious and
conservative content.” The problem of stifling free speech as a result of the TPP is a particularly potent one. The document’s “takedown
requirements open the door to abuse,” say Rossini and Opsahl, which could result in copyright claims being used to “strike a serious blow to
freedom of expression.” The gloomy news continues. But rather than paraphrase any further, I suggest you just read the post. The will to say
‘no’ The EFF’s notes of warning compose a ghastly tune we’ve heard all to often in recent years, and it is blaring crystal clear in the
crescendoing outcry confronting the TPP. But for those of us who find meaning in this song of injustice, only one conclusion can be reached: the
TPP must be stopped, just as we stopped SOPA, PIPA, and ACTA before it. At
first glance, it would seem as though a chorus
of opposition has begun to gather. The EFF’s combative article explaining the potential problems inherit
in the TPP repeatedly soared to the highly-trafficked front page of Reddit, the forehead of the Internet;
if you can feel feverish indignation there, then a good chance exists that a sickness is brewing. Soon the
antibodies of the Web will launch into action in an attempt to fight back against whatever cancer has
begun to grow — right? Perhaps — but I doubt the TPP opposition movement will establish meaningful
forces in the U.S., despite the country’s leadership role in pushing the treaty and the effects it may have
on our laws and our Web. …and why we won’t The secrecy of the TPP negotiations places the first
hurdle: without the ability to view the document in its entirety, we lack the authority to fully address
our concerns and outrage. This imposed ignorance has the tell-tale nature of a tactical maneuver by those hoping to tightly control
the public conversation about a controversial action. Until the full document is exposed, those of us in the dark can be
brushed aside for simply ‘not knowing what we’re talking about.’ This is a problem not just for the U.S. anti-TPP
movement but for all nations involved. The real obstacle for U.S. Internet users is the TPP’s inherently international
nature. About one-third of Americans (110 million people) currently hold passports — a significant jump
from the 48 million who had one in 2000. And yet, we remain foolishly unconcerned with international
issues (pdf) — at least those that don’t involve natural catastrophes or the dropping of U.S. bombs. The
simple fact that discussions surrounding the TPP include the names of other countries will likely cause
a good many Americans’ eyes to gloss over. Another mitigating factor is that the TPP is a trade
agreement — a confounding intergovernmental action few have bothered to grasp. During the buildup of
opposition to ACTA, we witnessed a slew of misinformed comments, and even “reports,” that labeled that treaty a “bill” or a “law.” Like ACTA,
the TPP is neither.
I expect this confusion and ignorance to further muddle any chance at genuine,
educated opposition to the TPP. Now, this sweeping, pejorative characterization of my fellow countrymen is not meant to discount
the guaranteed involvement of a good many Americans in opposing the TPP. A certain segment of U.S. Web users — the proud
disestablishmentarians who click articles like this one for fun — are on the lookout for acts of violence against the Internet. And they will get
involved in the tussle, no doubt. Similarly, those who oppose greater globalization will also naturally come out against the TPP — which is,
incidentally, far more about increasing the ability for large corporations to make money than it is about stamping out free speech and online
innovation. But these factions
of activists hold little power against stakeholders of the TPP without the backing
of the care-free masses. Prove me wrong I say all this after watching U.S. Web users gladly pass the baton of responsibility in opposing
ACTA to our cohorts in Europe. Granted, that is where the action was happening. And the anti-ACTA efforts there worked. But as it stands now,
there is no excuse for not telling Washington exactly what we think about the TPP. In fact, the responsibility to fight the TPP rests with us. After
all, Hollywood movie studios and music labels, and U.S.-based pharmaceutical companies (the most rabid proponents of copyright protections)
clearly have their grubby mitts all over the TPP. This makes it primarily our responsibility to reign in the overreach, to cut out the tumor. So for
any of you who have made it this far by sitting on a fence, think of the TPP this way: Your government is willing to unnecessarily sacrifice your
rights and the Internet you love for the sake of making a buck. Don’t let them. Read, scream, tweet, post, black out websites, call your
Congressmen and President Obama a hundred times. Don’t wait for Google, Facebook, or your geeky friend to stand up. Shed your insular shell
right now, and lead the world in shutting this sucka down.
AT: Product PICs
The PIC wrecks US credibility
Clark, 12 – I work for the National Confectioners Association that represents the United States candy,
gum and chocolate industries. It’s a pretty sweet gig. (Liz, Oral Statement of Liz Clark for the SWEETENER
USERS ASSOCIATION To the OFFICE OF THE U.S. TRADE REPRESENTATIVE, 9/21,
http://www.sweetenerusers.org/SUA%20Clark%20Oral%20Statement%20%20Sept%2021%20USTR%20TPP%20Hearing-Mexico.pdf)
The U.S. must commit to our negotiating partners that we have no "untouchable" commodities.
Regrettably, we saw the predictable result of denying Australia access to the U.S. sugar market under
our Australian FTA. Keeping our market closed sent a signal to other countries that it was OK for them
to do the same thing. And as an example, Korea denied the U.S. rice industry access to that important
market. If the United States is going to achieve a real “21st Century Agreement and Model for the
Future,” all commodities – including sugar – need to be on the table.
AT: China disad
The TPP won’t raise tensions – your claims are false
Frost 7/10/13 - Adjunct Senior Fellow at the East-West Center in Washington and an Adjunct Research
Fellow at the National Defense University in Washington, D.C. (Ellen, “Strategic Implications of TPP:
Answering the Critics,” Asia Matters for America, 7/10/13,
http://www.asiamattersforamerica.org/asia/strategic-implications-of-tpp-answering-the-critics)//AC
The Trans-Pacific Partnership (TPP) has swelled from four to 11 members, including the United States. Japanese Prime
Minister Shinzo Abe announced earlier this year that Japan intends to join as well. During the 18th round of negotiations, scheduled to begin on
July 15, two dozen separate negotiating groups will continue to hammer out the most comprehensive and far-reaching trade and investment
agreement ever negotiated among Asia-Pacific states. Predictably, most
free-trade advocates and economists in the
United States and other Asia-Pacific nations support TPP as a stimulus to growth, while opponents fear
the loss of jobs stemming from unfair or unethical competition. More surprising, however, is the variety and intensity of
reactions to TPP based on strategic and political-military concerns. In Asia, trade agreements are inherently strategic in nature. Criticism of
TPP centers overwhelmingly on the fact that China is not a member and secondarily on TPP’s real or
imagined impact on Asian regionalism. Japan’s decision to join TPP colors both perspectives. When President Barack Obama
announced in November 2009 that the United States intended to join TPP, the Chinese government immediately issued a volley of criticism.
Chinese commentaries claimed that the United States had invented TPP (false) as a Cold War tool of
containment (false again) and that TPP was deliberately designed to exclude China (not true once
again). It did no good to explain to Chinese spokesmen that TPP was initiated by four small APEC
members—Singapore, Chile, New Zealand and Brunei Darussalam—and that it took the US Government
several years to decide to join, including the first ten months of the Obama administration. In addition, one
of TPP’s founding principles is “open regionalism,” meaning that any Asia-Pacific government that makes
a credible commitment to reach TPP’s high standards is welcome to apply to join. The Chinese narrative
remained hostile from late 2009 until early 2011—around the same period when China’s behavior in the East and South China Seas was most
assertive. Since then, Chinese
rhetoric has moderated, and Chinese officials appear to be trying to learn more
about TPP rather than to categorically dismiss it as an anti-China plot. Nevertheless, many Chinese and non-Chinese
commentators continue to view the US “pivot” or “re-balancing” strategy, of which TPP is clearly a component, as directed against China.
Some warn that TPP will “provoke” China and that TPP’s high standards should therefore be drastically
lowered so that China can qualify for membership. Not only do these observers misunderstand both
the US strategy and TPP, but they also feed China’s self-centeredness and sense of victimhood. TPP
will neither raise tensions nor cause China to back away from its regional priorities . Beijing can live
with TPP, and reform-minded Chinese leaders may even be contemplating eventual membership. The truth
is that America’s re-balancing strategy to Asia, which includes TPP, would make sense for the United States and its Asian partners even if China
had remained poor. Asia’s extraordinary growth and relative stability are closely correlated with the rise of trade and investment opportunities.
For a second group of critics, those who champion Asian regionalism as a guarantor of peace and stability, TPP may seem misconstrued and
even jarring. TPP’s composition sweeps away the ASEAN-centered pattern of “plus” diplomacy that has underpinned Asian regionalism to date
(ASEAN+3, ASEAN+6, etc.). These critics fear that TPP could render ASEAN irrelevant. From a geopolitical perspective, the
composition of TPP seems illogical. Two of the three major economies of Northeast Asia, namely China and South Korea, are not members.
Only four ASEAN members—Singapore, Malaysia, Vietnam and Brunei Darussalam—have joined to date. Indonesia, the only ASEAN member
that is in the G20, is still on the sidelines. Cambodia, Laos and Myanmar are not APEC members and thus are ineligible for membership. The
seemingly odd membership of TPP is a pragmatic patchwork that reflects the unevenness of trans-Pacific trade and investment prospects.
Globally active companies from advanced economies want to knock down “behind the border” obstacles to market access. Middle-income
countries are likely to find new niches as production networks expand. The
poorest countries are simply not ready for such
a heavy dose of free-market competition, but at least they will have a model to aim for as they develop.
Far from thwarting Asian regionalism, TPP merely adds a new overlay. It gives ASEAN an additional
incentive to achieve its goal of an ASEAN Economic Community by 2015. It has also set a major new panAsian grouping in motion. Last November, the leaders of all ten ASEAN members and their “+ 6” associates—China, Japan, South
Korea, Australia, New Zealand and India—launched a Regional Comprehensive Economic Partnership (RCEP). This less ambitious initiative
combines two previous proposals for a free-trade agreement: one involving ASEAN+3—where China’s influence is strong relative to Japan’s—
and the other involving ASEAN+6, where Japan, Australia, and India play an implicit but non-threatening balancing role vis-à-vis China.
at – enviro da
The US is pushing for environmental regulations in the TPP – all the warrants for why
the TPP causes environmental degradation are addressed – your disads only
supercharge the link turn as the aff solves every harm
Bracken 13– Len Bracken is a writer for USTR, (“U.S. Pushing for Strong Environment Text In
Trans-Pacific Partnership Negotiations”, April 16, 2013,
http://www.wita.org/en/articles/printview.asp?733)//sawyer
The United States is continuing to push for a strong environment chapter in the
Trans-Pacific Partnership (TPP) negotiations, even though the other partner countries
have not traditionally included binding conservation provisions in their trade agreements, a
representative from the Sierra Club said April 11. Ilana Solomon, trade representative for the
environmental group, said the Sierra Club appreciates that the United States is advancing an
ambitious and legally enforceable proposal that addresses: · • trade in illegally harvested
timber; · • trade in illegally taken wildlife; and · • fisheries management. Speaking at a TPP
forum sponsored by the Washington International Trade Association, she said the
United States is the only country that is pushing for such an ambitious and binding
proposal while stressing the importance of the United States not backing down.
“Some of the other countries have substantive concerns about such strong environmental
provisions,” Solomon said. “Others have just never negotiated an environment chapter—they
don't necessarily make the links between increased trade and preserving the environment and
stress on natural resources.” The TPP partners currently comprise Australia, Brunei, Canada,
Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Japan
Participation on Agenda. In a statement following the 16th round of negotiations, the Office of
the U.S. Trade Representative March 13 listed the environment chapter, along with competition
and intellectual property chapters, as the legal texts containing the most challenging issues (62
ITD, 4/1/13). The 17th round of negotiations is scheduled to begin May 15 in Peru, but working
groups are meeting in advance of the round, and the TPP trade ministers will meet on the
margins of the Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade
Meeting scheduled for April 20-21 in Indonesia, where the possible participation of Japan in the
talks is on the agenda. Two other participants on the panel disagreed with Solomon's contention
that Japan's participation would pose a risk of increased fracking in the United States and her
criticisms of the investor-state dispute settlement mechanism in the investment chapter of the
TPP agreement. Linda Menghetti Dempsey, vice president of international economic affairs at
the National Association of Manufacturers (NAM), said the claim liquefied natural gas (LNG)
exports lead to increased fracking has been dismissed by the Obama administration regulator on
the issues in dismissing a claim filed by the Sierra Club. Stephen Schaefer, a vice president with
the Emergency Committee for American Trade (ECAT), said that the approval of exports of LNG
is separate from the domestic approval process for fracking. Solomon noted that no
comprehensive environmental impact study has been conducted on the issue of LNG exports
and said that if the TPP includes national treatment for trade in gas, the United States would be
legally bound to automatically approve any quantity of LNG exports to countries in the
agreement. Dempsey said the United States already has trade agreements with several of the
TPP partners without any significant consequences. NAM, she noted, is a strong supporter of the
investor-state dispute settlement mechanism in the investment chapter of the TPP agreement.
Solomon Cites MEAs. Solomon noted the United States has included a set of seven multilateral
environment agreements (MEAs) in all U.S. trade agreements since a landmark May 10, 2007,
bipartisan congressional agreement that provisions covering labor, environment, and access to
medicines would be included in U.S. trade pacts. “We believe that the TPP should at a minimum
include these MEAs in order to help to ensure the protection of our environment, to ensure that
we're not weakening environmental commitments in order to attract trade and investment and
to ensure that we're actually improving upon and moving forward on our commitments and not
backsliding on commitments,” she said. Solomon stressed the “devastating impact” illegally
harvested timber has had on the economy and environment in Pacific Rim, threatening
biodiversity and contributing to deforestation. She also noted that tiger parts and rhino horns
are commonly traded in the region, with an estimated $20 billion per year in environmental
consequences, and said the environment chapter should include binding measures to address
over fishing in the region. “The Pacific Rim is an area of really great significance from an
environmental perspective,” she said. “It includes some of the most biologically diverse areas on
earth that are already threatened by illegal and unsustainable commercial exploitation.” USTR
Green Paper Outlines Proposal. The USTR green paper outlining the U.S. proposal notes that
TPP partners are all parties to the Convention on International Trade in Endangered Species of
Wild Flora and Fauna (CITES), and several already participate in related initiatives, such as the
ASEAN Wildlife Enforcement Network (ASEAN-WEN). USTR also said TPP countries have been
active in World Trade Organization Doha negotiations to eliminate fisheries subsidies that
contribute to global overcapacity in fishing fleets. Despite these efforts, the other TPP countries
are contesting the enforcement mechanisms proposed by the United States in the environment
chapter, a source has previously told BNA. Chile and Peru have a shared conservation proposal
that addresses similar issues—logging, wildlife, and fisheries—but is not binding, the source
said. Even Australia and New Zealand have opposed a binding provisions, notably those
contained in the multilateral environmental agreements, even though they have strong national
laws on conservation. According to USTR, the U.S. proposal includes: · • An obligation to
maintain, in national laws, regulations or measures, prohibitions against trading across TPP
borders in products harvested or exported in violation of national laws that seek to protect
wildlife, forest or living marine resources. Such provisions would reflect and enhance recent
trends in a number of countries to restrict trade in products that have been illegally obtained. ·
• Prompt reporting or information sharing related to trade among TPP parties of products
within the scope of anti-trafficking obligations, including information-sharing for law
enforcement purposes. · • Mechanisms for cooperation among TPP regulatory and law
enforcement authorities in implementing anti-trafficking obligations, including: creation of
working groups; exchanges of enforcement personnel; joint law enforcement meetings, exercises
and investigations; and participation in and establishment of regional law enforcement
networks. · • Enhanced partnership with non-governmental organizations, the private sector,
scientific organizations and local communities to address illegal trade in wildlife and wild plant
products and promote innovations that improve supply chain management.
Turn – the TPP is the only international system able to prevent environmental harms
Wyden 12 -Ronald Lee "Ron" Wyden is the senior United States Senator for Oregon, (“IN THE
SENATE OF THE UNITED STATES”, August 2, 2012, http://www.gpo.gov/fdsys/pkg/BILLS112s3518is/html/BILLS-112s3518is.htm)//sawyer
The negotiations on fisheries subsidies in the World Trade Organization and negotiations for
the Trans-Pacific Partnership Agreement are two of the most important, and promising,
international efforts to stop global overfishing and represent meaningful efforts to
directly address a key environmental issue that directly impacts international
trade.
AT: Politics
The TPP is bipartisan
Yang 13 – Yao Yang The writer is director of the China Center for Economic Research at Peking
University and editor of China Economic Quarterly, (“America’s pivot to Asia will provoke
China”, February 12, 2013, http://blogs.ft.com/the-a-list/2013/02/12/americas-pivot-to-asiawill-provoke-china/#axzz2aH4kur6B)//sawyer
The more constructive part of the pivot should have been the Trans-Pacific Partnership. But
even on this count, the US has caused more suspicion than goodwill in China. The TPP was
designed for like-minded countries to form, in President Barack Obama’s words, “a platinum”
free-trade agreement for the Asia-Pacific region. It was the result of both America’s agony with
the ineffectiveness of the Asia-Pacific Economic Co-operation forum and the White House’s
political strategy to please those on both the right and the left – it expands free
trade, so Republicans are happy; but it also requires member countries to meet labour,
environmental and even human rights standards, so Democrats are happy.
Plan has consensus in Congress
Solis 13 - Mireya Solís is the Philip Knight Chair in Japan Studies and senior fellow at the
Brookings Center for Northeast Asian Policy Studies, and associate professor at American
University. An expert in Japan’s foreign economic policies, Dr. Solís earned a PhD in
government and an MA in East Asian Studies from Harvard University, and a BA in
international relations from El Colegio de México. Her main research interests include Japanese
politics, political economy, and foreign policy; international and comparative political economy;
international relations; and government-business relations. She also has interests in broader
issues in U.S.-Japan relations and East Asian multilateralism, (“A Currency Clause in the TransPacific Partnership is Unworkable, Unsuitable, and Counterproductive”, July 8, 2013,
http://www.brookings.edu/research/opinions/2013/07/08-tpp-currency-clause-solis)//sawyer
Few ideas seem capable of generating consensus in Congress these days, but the
motion to attach a currency manipulation clause to the Trans-Pacific Partnership
(TPP) trade agreement was endorsed by 230 lawmakers in a June 6th letter to
President Obama. This letter echoes earlier statements by the American Automobile Policy
Council and the UAW condemning the inclusion of Japan in the TPP with charges that this
country is a systematic currency manipulator and that a trade agreement cannot dismantle its
entrenched non-tariff barriers. As the discussion about renewing Trade Promotion Authority
(TPA) heats up and the TPP negotiations approach their final stage, the wisdom of including a
currency manipulation clause deserves close-up scrutiny.
Doesn’t link to politics – fast track authority
Nash-Hoff - Michele Nash-Hoff, Founder and President at ElectroFab Sales (“The TransPacific Partnership Trade Agreement Would Harm Our Environment”, 7/10/13
http://www.huffingtonpost.com/michele-nashhoff/the-transpacificpartners_1_b_3568136.html)//sawyer
A few conservative news outlets such as WorldNet Daily began to recognize the dangers of the
TPP early this year, beginning with the article, "Obama skirting Congress in globalist plan?" in
which Jerome Corsi warn that "the administration apparently plans to restrict congressional
prerogatives to an up-or-down vote" utilizing the "fast-track authority," a provision under
the Trade Promotion Authority that requires Congress to review a FTA under
limited debate, in an accelerated time frame subject to a yes-or-no vote. Under fasttrack authority, there is no provision for Congress to modify the agreement by submitting
amendments to ensure foreign partners that the FTA, once signed, will not be changed during
the legislative process.
Doesn’t link to politics – trade promotion authority
Palmer 12 – Doug Palmer is a journalist for Reuters, (“White House wants trade promotion
authority: Kirk”, Feb 29, 2012, http://www.reuters.com/article/2012/02/29/us-usa-trade-kirkidUSTRE81S1FF20120229)//sawyer
"We've got to have it," U.S. Trade Representative Ron Kirk told the House of Representatives
Ways and Means Committee, referring to legislation known as trade promotion authority which
expired in mid-2007. Kirk declined to say when the White House would make a formal request,
but said it could need the authority by the end of the year because of its goal of
concluding the Trans-Pacific Partnership (TPP) trade agreement with Australia, New
Zealand, Vietnam, Chile and four other countries in 2012. "We'd like (the legislation) to address
both TPP and then any other ambitions we might have," Kirk told reporters after the hearing.
Republicans and business groups have pressed the White House to seek renewal of trade
promotion authority, which traditionally requires Congress to vote on trade agreements within
90 days and without any amendments. Representative Kevin Brady, a Texas Republican, said it
was "critical" the White House have trade promotion authority so other countries
know any agreements they make with the United States will not unravel during
debate in Congress. Senate Republican Leader Mitch McConnell welcomed Kirk's comments
and urged the White House to send up draft legislation and work with congressional leaders to
schedule a vote on the measure before the Memorial Day recess in late May. Many Democrats
have qualms about the legislation since it signals White House plans to negotiate more trade
agreements. That is a divisive issue within the party because of opposition from labor groups.
The legislation typically also contains detailed negotiating objectives the White House is
expected to follow in trade talks. The Obama administration has been using the expired trade
promotion authority as guidance for the ongoing Trans-Pacific Partnership talks, but those
objectives were crafted in 2002. Kirk said the administration wanted to work this year with
congressional leaders and key committees to craft a "thoughtful bill" that could be approved
with bipartisan support. The Obama administration, which took office in January 2009, has not
previously sought trade promotion authority, a tool that former President George W. Bush used
to negotiate about a dozen bilateral and regional free trade pacts. Congress approved the last
three of the Bush-era trade deals in October after the Obama administration made various
changes to the pacts with South Korea, Colombia and Panama to make them more palatable to
Democrats. Representative Sander Levin, the top Democrat on the Ways and Means panel, said
he doubted a trade promotion authority bill would be passed this year. The 2002 bill took about
18 months to pass. Kirk also urged Congress to approve "permanent normal trade relations"
with Russia to ensure U.S. companies share in the benefits of that country's expected entry into
the World Trade Organization in coming months. That's expected to be a tough vote because
Russia is unpopular with many U.S. lawmakers due to Moscow's record on human rights and its
foreign policy aims, which often are at odds with the United States.