To Win Over Asia, Talk Trade

Bookmark

President Joe Biden is showing he understands that Asia matters. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin visited Japan and South Korea this week — their first trips abroad as members of the new administration. But in managing its relationships with the region, the Biden team is in danger of forgetting something that matters a lot to its partners, and should matter no less to the U.S. And that’s trade.

Suspicion of agreements such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) — an 11-nation pact that in its earlier form included the U.S. — runs deep among Democrats, and especially with their union base. Biden has repeatedly vowed not to sign any new trade deals before first investing more in American workers.

He ought to do both. On trade, there are real costs to standing on the sidelines. With the conclusion of the 15-nation Regional Comprehensive Economic Partnership last fall, the U.S. stands outside the two biggest trade agreements in the world’s fastest-growing region. That puts American workers and companies at a disadvantage, and allows other countries — including China — to write the rules of trade for the coming decades.

It also does serious damage to the very thing Biden is trying to rebuild: U.S. credibility. While most Asian nations want the U.S. engaged in the region as a counterbalance to China, they have no interest in being shoehorned into an overtly anti-Beijing coalition. Their priority remains growth and development, all the more so after the devastation wrought by the Covid-19 pandemic. They’re looking to the U.S. as a market, a source of investment and technology, and a champion of the open global trading system that enabled their rise. Choosing not to engage on trade will undermine support for Biden’s other goals in the region.

At a minimum, the administration should make clear it understands this reality. It could start by launching talks on a narrower sectoral agreement, such as one focused on digital trade, to build confidence. Much of the groundwork has already been done, both in the U.S.-Mexico-Canada trade agreement, which improved on the CPTPP’s digital provisions, and in separate pacts struck by countries such as Singapore, Australia and New Zealand.

Another target might be an agreement focused on green goods and services. Building on commitments the U.S. just made with its so-called “Quad” partners (India, Australia and Japan), the administration could also widen talks on securing supply chains for critical materials and technologies, including rare earths and semiconductors.

And Biden shouldn’t give up on rejoining CPTPP. This needn’t be as hard as the president appears to think. Polls suggest that support for trade is stronger among the public than in Congress, and changes made to the pact since the U.S. withdrew should also make it more appealing to Democrats.

In any case, Biden should be guided by what’s good for the country and its workers, not by what seems most politically convenient. Standing aside from TPP (as it then was) rivals Brexit as an unforced act of economic self-harm. Biden’s team should be quietly conferring with key countries such as Japan to sketch out the stricter labor and environmental provisions that would be needed for the U.S. to rejoin. At the same time, the White House should accelerate measures to support the workers most affected by foreign trade.

International economic cooperation is vital to sustain the global economic recovery, raise productivity and living standards, and advance America’s security interests in Asia. Biden says the U.S. is once again ready to lead. That’s good. The president needs to lead on trade, too.

Editorials are written by the Bloomberg Opinion editorial board.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.