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Musing on Economics
 
Trans-Pacific Partnership (TPP) was the world's biggest trade deal that never was. Its rise and fall shows how conventional U.S. economic policy—if you want to encourage growth, lower trade barriers—was sent to the junkyard in favor of an everyone-for-themselves approach. That shift has led to a profound restructuring of global trade relationships. 

• The backstory: TPP's origins can be traced to the Bush administration, which initiated trade discussions with Pacific Rim countries in 2008. Three years later, then-Secretary of State Hillary Clinton laid out the Obama administration's famous "pivot to Asia." She argued that freer trade with Asia would open up vast new consumer markets for American companies, while allowing the U.S. to make strategic investments in the growing region. TPP took five years of negotiations but was signed in 2016 by 12 nations representing ~40% of global GDP and 33% of global trade. Supporters said TPP would unlock unprecedented economic opportunities in the digital age and create a counterweight against China's growing influence in the region. 
• Then came the 2016 U.S. election -- Donald Trump believed for decades that the U.S. was getting ripped off by trade deals with other countries. When he took office in 2017, no one was surprised when he tore up TPP before unpacking his red ties. The president echoed opponents of the deal when he claimed that TPP would cost American jobs and hurt American exports.
• Here's the irony -- Trump wasn't the only presidential candidate in 2016 who opposed TPP. Hillary Clinton, who praised the deal all over the world rejected it prior to the election, saying it didn't meet her "high bar." Trump's and Clinton's views on TPP reflected disillusionment with globalization (not unique to America), particularly among manufacturing workers who watched their jobs shift overseas.
• The rest is history -- Since 2017, President Trump has gone full "Tariff Man," launching a trade war with China, the EU and other close allies. At the same time, American attitudes toward free trade have become more positive, according to Gallup. In 2008, the majority of the country considered trade more of a threat to the economy than an opportunity. Now, 74% view it as an opportunity for growth. 
• Looking ahead…no matter who wins the White House next November, it is unlikely that a deal like TPP will be resurrected. President Trump and some of his Democratic opponents sound eerily similar on the topic of trade. 

 
Figure 1: U.S. Consumer Response to Foreign Trade—Threat vs. Opportunity

Source: Gallup
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