By William F. Jasper
29 June 2015
Now that Congress has passed Trade Promotion Authority/Fast Track, the Council on Foreign Relations is taking the lead in calling for China to be included in the Trans-Pacific Partnership (TPP). This represents a key reversal of the deliberately deceptive public message put out by the Obama administration and the TPP lobby over the past couple of years, to wit, that a TPP is absolutely essential to averting Communist China’s economic hegemony, in the Pacific and globally.
The Los Angeles Times, which has offered unstinting support for the TPP, in a March 4, 2015 article entitled “China is Obama's trump card in push for Pacific Rim trade pact,” noted the Obama White House strategy of presenting China’s economic ascendance as a primary reason for approving the TPP. “President Obama is hoping to win passage of a Pacific Rim trade pact by playing on fears of China,” ran the story’s subtitle.
“As the White House looks to wrap up years of negotiations on a highly contested Pacific Rim trade pact,” wrote the Times' Don Lee, “administration officials are increasingly casting the agreement as vital to helping the U.S. face its most daunting economic rival: China.”
“The proposed Trans-Pacific Partnership, or TPP, would be the largest trade deal in American history, involving the U.S., Japan and 10 other countries that combined make up 40% of the world economy,” the Times story continued. “China isn't among them. In recent weeks, one Obama official after another has hammered away at the same line of argument: It's crucial that Congress supports the TPP — including passing a related trade-promotion bill that would strengthen the president's negotiating hand — because the alternative is that China, not the U.S., will write the rules of global trade.”
But, with TPA/Fast Track approved, the ObamaTrade lobby is dropping some of the pretense. As The New American has pointed out many times over the past few years (see here, here, and here), the architects of the TPP — especially the world government activists of the Council on Foreign Relations (CFR) and the Peterson Institute for International Economics (PIIE) — have long been on record in favor of the TPP as merely a “stepping stone” to a much larger Free Trade Area of the Asia Pacific (FTAAP) that would include China as a member. The anti-Beijing rhetoric is purely a ruse to lure support from conservatives concerned over China’s stepped-up militancy, as well as domestic manufacturers and labor unions worried about loss of more manufacturing business and jobs to the Beijing behemoth.
In its Daily Brief for June 25, the CFR applauded the U.S. Senate’s approval of Fast-Track Trade Authority and directed readers to the Richard Katz article “Getting TPP Right Is Better than Getting It Fast” in the CFR journal Foreign Affairs. Katz, of course, favors “bringing China into TPP.”
“[China] is far less dangerous internationally than it was under Mao Zedong,” claims Katz, ignoring the fact that China under Mao was a fourth-rate power — economically, militarily, and technologically — before Kissinger, Nixon, and the CFR crew began the financial and technology transfers that transformed the communist regime into a global power. “Much of that political evolution has occurred because China’s leaders know that the rapid growth undergirding their rule depends on economic interdependence. Over the long run, bringing China into TPP would further the trend, hopefully strengthening those inside China who want to liberalize the economy and make the country a more responsible stakeholder in the world.”
Significantly, the same Katz article in Foreign Affairs admits another key point that TPP critics have made: U.S. tariffs are already so low, and our trade restrictions already so open, that further reductions and openings will have little benefit to the United States while conferring advantages on foreign competitors.
“For its part, the United States is already so open to trade that most of the direct economic gains from any new free trade agreements will go to its partners,” writes Katz. “According to the ‘bible’ of TPP proponents, The Trans-Pacific Partnership and Asia-Pacific Integration, which was published by the Peterson Institute for International Economics in 2012, U.S. national income in 2025 would be just 0.4 percent higher with TPP than without it. Meanwhile, for Japan it would be 2.2 percent higher, for Malaysia 6.6 percent, and for Vietnam 14 percent.”
That’s quite an admission from the CFR and PIIE! However, it is almost certain that the unvarnished truth would turn out to be even far worse than the globalists admit. As we have pointed out previously, we have the CFR/PIIE record of past outrageous projections that turned out to be completely wrong.
For instance, in 1993, the Peterson Institute for International Economics released its influential study, “NAFTA: An Assessment,” which predicted that “with NAFTA, U.S. exports to Mexico will continue to outstrip Mexican exports to the United States, leading to a U.S. trade surplus with Mexico of about $7 (billion) to $9 billion annually by 1995.” It also predicted that the U.S. trade surplus with Mexico would increase to $12 billion annually between 2000 and 2010. The actual result was quite different.
In 1993, the year before NAFTA went into effect, the United States had a $1.66 billion trade surplus with Mexico; by 1995, the first year after NAFTA had entered into force, that changed to a $15.8 billion deficit. By 2000, that annual deficit had soared to $24.5 billion, and by 2007 it hit $74.7 billion. For 2014, our trade deficit with Mexico dipped to only $53.8 billion. In 1993, the year before NAFTA, we imported around 225,000 cars and trucks from Mexico. By 2005, our imports of Mexican-made vehicles had tripled to 700,000 vehicles annually, and in 2012, Mexico’s export of vehicles to the United States surpassed 1.4 million. Chrysler, Ford, and GM transferred major production facilities (and jobs) from the United States to Mexico. Our trade deficits with Canada have followed a similar path since adoption of NAFTA.
Like the global-warming alarmists, The PIIE authors and CFR pseudo-free trade propagandists had employed computer models that cherry-picked data and literally conjured statistics to fraudulently sell their product: NAFTA. If they were car salesmen, they would have gone to jail for fraud and misrepresentation. Instead, they are back doing the same thing, concocting rosy statistics to sell the TPP and TTIP.
When it comes time for Congress to vote on TPP, the Obama administration will undoubtedly pull out the China “trump card” again to scare up support on the one hand, while simultaneously giving a knowing wink-and-nod to the globalist lobby to signal that they can ignore the anti-Beijing rhetoric because the plan to bring China into the TPP is proceeding on the fast track.