A peculiar charade is being played out during the current U.S. election campaign. The Trans-Pacific Partnership (TPP) which is an economic agreement between the U.S. and several Asian countries has been under negotiation for almost eight years now. For four of these eight years Hilary Clinton was the Secretary of State and hence directly supervising these negotiations; and even after she quit that job she has remained a prominent figure around the Obama administration, even if not part of it. And yet both the presidential candidates, not just Donald Trump but even Hilary Clinton, have disowned the TPP during their respective election campaigns.
How is this possible? It is not as if any new information about the TPP has come into the open during this period or that John Kerry as the new Secretary of State has added something new and different to the proposals that Hilary Clinton had been associated with during her tenure. Why then is she disowning it? And therein lies the charade.
The TPP, while it is in the interests of U.S. monopoly capital is not necessarily in the interests of the U.S. national economy, a distinction that becomes particularly essential to draw in the era of globalization. Let me illustrate this distinction. If U.S. multinational corporations locate plants in low-wage Asian economies to produce for the U.S. market, then their profits go up, and hence it is in their interest to do so; but by doing so they not only contribute to unemployment within the U.S. itself, but also to a current account deficit in the U.S. balance of payments. They in short contribute to a “debt-financed deindustrialization” of their own economy in the process of enhancing their profits.Their interest and that of the economy to which they belong are contradictory. (The “deindustrialization” in the above example of course would give rise to other economic contradictions over time, apart from political ones, since the U.S. market would shrink because of such “deindustrialization”; but these need not detain us here).
The point of the TPP is to promote the interests of U.S. monopoly capital by setting up arrangements which violate the national sovereignty of the participating countries, including of the U.S. itself; but, precisely by doing so, such arrangements enhance the power of globalized capital.
A couple of illustrations of how the TPP does this will clarify the point. The first relates to the patent and copyright provisions which under this deal would become stronger and have longer duration. This of course would strengthen the monopoly position of multinationals, and of U.S. multinationals in particular which tend to be pioneers in the introduction of a whole range of process and product innovations. At the same time it would raise the cost of many goods, especially of drugs (and of entertainment as well), not just in other TPP countries but within the U.S. itself. While benefits would thus accrue to U.S. companies, U.S. consumers, not to mention those from other TPP countries, would be worse off. In addition, it would make the goal of national self-reliance in essential commodities an impossible one to achieve for all the other TPP countries.
The second example relates to a much talked-about provision of the TPP, namely, the creation of investor-State dispute settlement tribunals. In cases where a dispute arises between a foreign investor and the State of the host country, this dispute will not be settled in the courts of the host country or in accordance with the laws of the host country. It will be settled in special tribunals created for the purpose which will be guided by principles outside of the laws of the contracting countries. The point in short is to set up supra-nation-State bodies serving the needs of globalized capital.
This is a pioneering experiment in instituting direct global governance by international capital which by-passes and goes beyond the nation-State. But even though this would benefit U.S. monopoly capital by extricating it from any control by the nation-States of countries where it invests, it also implies that U.S. laws themselves would not necessarily be binding upon it.
The U.S. State which has taken the lead in negotiating the TPP therefore is attempting to set up institutions of global corporate governance, in the interests of globalized capital, which go beyond nation-States and national jurisdictions, including of the U.S. itself. The U.S. state in other words, despite being a nation-State, is going beyond its nation-State character to set up supra-nation-State institutions that would serve globalized capital, of which U.S. capital is a leading contingent. It is standing with U.S. capital even against its own national economy, including of course its own working class.
But the election season is always a trying time for capital, since all the working people, against whose interests negotiations like the TPP are carried out, are suddenly in a position to exercise their franchise and hence to have their voice heard. The current election season in the U.S. is a particularly trying time for U.S. capital. Its economy is still mired in crisis and acute unemployment, so much so that the mortality rate among white male workers has reportedly climbed up sharply as a consequence; and in the midst of this situation, wooing working class support has suddenly become essential for both Trump and Clinton.
Trump, whose whole ideology anyway consists in blaming not the system for the distress of the workers, but those who constitute the “other”, i.e. immigrants, Muslims, minorities and workers in distant Asian countries who are accused of “stealing American jobs” (as if American capital had nothing to do with the process), would naturally speak against the TPP (as favouring foreign workers), notwithstanding his solicitousness for globalized capital. He may promote the TPP, as aggressively as Obama has done, after he is elected if perchance he is elected; but his hope of getting elected rests upon his opposition to TPP.
And ironically exactly the same is true of Hilary Clinton as well, even though her ideology is different from Trump’s, and she has not invoked marginalized, or distantly-located, or minority groups, which jointly or separately constitute the “other”, as the main cause of the distress of the white American workers. Even so, despite having negotiated the TPP, she too perforce has to profess opposition to it.
Significantly, however, a new strategy is being tried by the outgoing Obama administration to get the TPP accepted by the U.S. Congress, where it is currently awaiting assent. And whether or not Obama succeeds with this strategy, it opens up a way for his successor, who must be from among these two candidates both of whom have expressed opposition to TPP during election time, to commit a volte face afterwards and to endorse the TPP.
This strategy consists in highlighting the role of TPP not as an economic arrangement that is of benefit to the U.S. but as an aid to a “security” arrangement that is necessary for the U.S. The claim is that if the U.S. backs out of the TPP now because it is not beneficial to itself in economic terms, then it will lose its credibility as a “security partner”. Other countries associated with the TPP would say that if the U.S., having negotiated the TPP, could withdraw from it owing to calculations of self-interest, then its pledges were no longer reliable: if it found tomorrow that its promise of military support to some “security partner” became too “costly” for it, then it could easily withdraw from this promise the way it was withdrawing from the TPP.
This argument has been articulated by the Prime Minster of Singapore and by some other leaders of the TPP countries, but the Obama administration itself is alleged to be encouraging it to put pressure on the Congress. Whether or not such pressure bears fruit, it provides a convenient excuse for whoever becomes the next President to withdraw conveniently from a position of opposition to the TPP; after all, how can anyone be indifferent to the needs of “national” security?
The mythology spread everywhere by the spokesmen and advocates of international finance capital is that the interests of the “nation” are synonymous with the interests of its corporate-financial oligarchy which is integrated with international finance capital. This, as an economic argument, is no longer credible in the midst of the economic crisis. It is obvious to most people by now that while the interests of finance capital are served by globalization, the interests of the working people are not; and that globalization, by enfeebling the State and making it a mere handmaiden of finance capital, takes away the one instrument of intervention that could be used in the midst of the crisis. The Brexit vote, the opposition to the TPP among the American people, are all indicative of a rejection of this argument that the national and corporate-financial interests are identical. It is in this context that the new argument is being advanced, namely, that the “security” interests of the “nation” demand that international arrangements which promote the economic interests of the corporate-financial oligarchy, be accepted.
(This article was originally published in the People’s Democracy, Vol. XL, No. 39, September 25, 2016.)