Brexit: A Warning Sign for TPP?

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Nigel Farage, former leader of the British UKIP party, speaks at Republican presidential candidate Donald Trump’s rally in Jackson, Mississippi, August 24, 2016.

Those in the Washington establishment, strong supporters of globalization, have been giving assurances to Asian trade partners NOT to worry about all the anti-free trade rhetoric being hurled about in the current U.S. presidential campaign.  (NOTE: Both of the likely nominees of the major parties, Donald Trump and Hillary Clinton, who famously reversed her position, have come out against the Trans Pacific Partnership (TPP) — the main free trade agreement currently on the table.)   Bernie Sanders’s  anti-free trade populists, of course, were the ones who dragged Wall Street insider Hillary Clinton, kicking and screaming,  away from her previous position that TPP  “sets the gold standard in trade agreements”   (http://www.politifact.com/truth-o-meter/statements/2015/oct/13/hillary-clinton/what-hillary-clinton-really-said-about-tpp-and-gol/).

Despite all of this anti-TPP noise,  the Washington elite is cooing “don’t worry” into the ears of increasingly nervous Asian diplomats.  Assurances are being offered that the U.S. Congress, when the current “silly” political season is over, will ratify TPP in a post-election lame duck session.    Thus, the pro-trade Republican Congressional establishment will supposedly, post-election, turn its collective back on its great unwashed anti-free trade, Tea Party populists to come together with a lame duck Obama Administration, which has already turned its back on its union rank-and-file as well as the Bernie Sanders populists,  to continue the U.S. economy down the yellow brick road of globalization.

Yet that same establishment, in both Washington and London, was assuring us all only one day before the Brexit vote that all would be well.   The sober British public was too serious and level-headed, they opined, to ever be swept up by resentment of a bloated EU bureaucracy and by anti-immigrant emotionalism to slash the ties to a globalized EU community.  The U.S. stock market soared over two hundred points.  Well. guess again.  Britain voted 52 to 48 percent to exit.  The post-vote Dow was down 500 points at the opening bell.

If 2016 has proven anything politically, it is that the common folk will no longer automatically dance to the politically correct music of a global elite.  They dance increasingly to their own tune — one of nostaglia and lost grandeur.  They seek, thus, to go backwards to the future.

I should make it clear that I am a supporter of TPP and, in general, free trade agreements.  The Brexit vote is only one more signal of the seimic shift of the global economy in the 21st Century away from the Atlantic-based world economy, in place  for the five hundred-plus years since  “in 1492 Christopher Columbus sailed the ocean blue,”  and to an Asia-Pacific based world economic order.   Despite all of the U.S. voter angst over lost jobs and a nostalgic desire to return to the America-centered economic order of the post-World War II era, the hard truth is that the United States cannot maintain the standard of living for its citizens and its relative economic standing in the world without being a player in today’s global economy.  Without a seat at the table, which TPP represents, American economic interests are guaranteed to continue to slowly erode over the coming decades.

Yet the smug, know-it-all Washington and New York elite has done a terrible job in presenting its case to the American public.  The father — and in Hillary’s case, mother-knows-best approach is simply not working.   Sanctimonious preaching about the merits of globalization pales in comparison to the simplistic, but catchy, rhetoric of a populist like a Donald Trump or a Nigel Farage, who famously said of Brexit “this is a victory for ordinary people, for good people, for decent people.”    (http://www.independent.co.uk/news/uk/politics/brexit-recession-economy-what-happens-nigel-farage-speech-a7099301.html)

And a decision to largely ignore the negative side effects of globalization, such as the job displacement of working Americans and the relative decline of their standard of living, even with the now prevelant two-income household, is generating a voter backlash.   The darker side of resistance to globalization, a fear of the other, has also become a part of the political discourse.  Yet an elite tendency to minimize the threat of international terrorism, including a demonstrated link to extreme forms of Islam, is playing into the hands of the fear mongers.  One has to wonder what impact the New Year’s Eve assault by young Middle Eastern males on German women in Cologne, because of the way they dressed and what they were drinking, had on the psyche of some British fathers as they went to the polls to vote on Brexit?

Instead of addressing fears and concerns which have some legitimacy, however, the elite has adopted a professorial preachy approach.  This was, for example, on display in April when, during a London visit, President Obama intervened in the debate by telling the British people that the U.K. is going to be “in the back of the queue” if they supported Brexit.  Those comments apparently backfired, being cited by Mr. Farage as one of the reasons for the pro-exit vote.  (http://thehill.com/blogs/blog-briefing-room/news/284790-nigel-farage-obama-helped-force-brexit)   I always take the view that Chinese Premier Zhou Enlai’s advice NOT to interfere in the internal affairs of another country is the best course.

The U.S. electoral process saw a first major impact of anti-globalization, anti-free trade and anti-TPP sentiment in the significant primary defeat in Virginia last week of veteran Republican House Member Randy Forbes by Scott Taylor, 53 to 41 percent.  His young primary opponent made Forbes’ past expressed support for TPP a major thrust of his campaign attacks. (http://www.thenewamerican.com/usnews/politics/item/23486-randy-forbes-defeated-in-primary-a-lesson-in-the-tpp)   And the tactic proved effective.

Speaker Ryan, though reportedly well ahead in polls, is facing the same anti-TPP rhetoric in his own August primary challenge from a wealthy Tea Party opponent.   (http://www.realclearpolitics.com/video/2016/05/05/paul_ryan_challenger_challenges_him_to_debate_tpp.html)

The closure of a decades-old GM assembly plant in Speaker Ryan’s hometown of Janesville, Wisconsin, which reportedly employed 7,000 workers at its production height in the 1970s, and its move to Mexico, seen as a result of the NAFTA free trade agreement, has reportedly only fueled anti-free trade sentiment in the district. (http://www.nbc15.com/home/headlines/19465899.html)  In this volatile political election year, with free trade a wild card issue, it remains to be seen how much impact anti-free trade sentiment and Ryan’s support for TPP will have on voters.

With Speaker Ryan telling CBS News in February that there were “not enough votes” currently in the House to ratify TPP, (http://www.cbsnews.com/news/speaker-ryan-not-enough-votes-for-tpp-trade-deal/), with the two likely major party presidential nominees, Hillary Clinton and Donald Trump, both coming out against TPP, with Chairman Forbes’ primary defeat linked to anti-TPP voter sentiment, and now with the Brexit vote signaling a further lack of confidence in global economic integration, why should any Asian diplomat now believe the Washington whispers that TPP will come out okay in the end at a lame duck Congressional session?

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