U.S. sits out this free trade round, looks tired
Like an aging jock, the U.S. is sitting on the sidelines as other countries move the ball forward on a field it once dominated. A number of the world’s biggest economies are striking free trade deals, threatening to form regional trade blocs excluding America, notes Shannon O’Neil, a senior fellow for Latin America Studies at the Council on Foreign Relations in New York, writing for Bloomberg Opinion. In addition to losing out now, that’s a long-term problem because it also means the U.S. is forgoing opportunities to set precedents that can protect its interests in future trade agreements. Will the one-time MVP get back in the game in time?
- O’Neil points out that in the last two years, countries which collectively represent over a third of the world’s total GDP have signed over a dozen trade treaties between them. Conspicuously absent is the U.S., long the leader in pushing for free trade deals.
- Among the big agreements, Japan rescued the Trans-Pacific Partnership (TPP) after America ditched it, convincing eleven other countries around the Pacific basin to join a rebranded Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japan also struck a free trade deal with the EU.
- Elsewhere, Mercosur recently announced that it would enter a free trade agreement with the EU as well. Then there’s the African Continental Free Trade Area, an ambitious agreement covering the majority of the continent’s countries, including all its biggest economies.
- The consequences for American exports are real: for example, Canadian wheat costs a third less than American wheat in all the CPTPP countries, while Australian beef isn’t subject to the onerous 30% tariffs Japan places on American beef.
- The consequences for American leadership in rule-setting and standards are even more serious, as America will no longer have the “last word” in everything from vehicle emissions to product labeling, food safety, drug testing and so on.