National Security Benefits of Trade Promotion Authority

1. Completing Trade Promotion Authority (TPA) legislation is a prerequisite to completing trade agreements, such as the Trans-Pacific Partnership (TPP).
2. President Reagan explained how economic strength, supported by international trade, is a key element of national power.
3. TPP is a critical pillar of the U.S. rebalance to the Asia-Pacific region.
4. Completing TPP can show it will be America that will write the rules for the 21st century international trade regime. Otherwise, China will do it.

Trade Promotion Authority is as much about empowering the next president to use that authority aggressively as it is about the current president using it to complete the Trans-Pacific Partnership. Expanding an open trading system – and completing the TPP – are vital to advancing the national security strategy of the United States. They are also needed to ensure that America does not cede the international trade playing field to China.

Economic Strength Is a Key Element of National Power

President Reagan wrote in his January 1988 National Security Strategy, “our national security and economic strength are indivisible. ... U.S. national power rests on the strength of our domestic economy.” International trade contributes to a strong and growing domestic economy. It strengthens the economies of foreign countries, which in turn benefits the United States. As Reagan wrote, “international flows of people, capital and goods have enabled us to improve our standard of living far beyond that which would have resulted from a closed economy.”

“An open world of enterprise and the free movement of people, goods, and ideas are not only the keys to our prosperity, but basic moral principles.” 

– President Ronald Reagan, 1988

To this end, a key national security objective for Reagan was to “promote a well-functioning international economic system with minimal distortions to trade and investment.” Combatting the threat of “a global spiral of protectionism” was crucial.

So it is with President Obama. He wrote in his February 2015 National Security Strategy, “economic strength is the foundation of our national security.” U.S. economic power is increased, not diminished, by international trade. For Obama, “trade agreements have economic and strategic benefits for the United States.” As for protectionism, the heads of state at the G20 summit in November 2014 reaffirmed their longstanding commitment “to resist” it.  

Simply put, national defense is expensive. America needs a strong economy to pay for it. For Reagan, World Wars I and II demonstrated the importance of a strong economy to be able to produce the goods we used to defend ourselves and our allies. That principle applies with equal force to the war Islamist terrorists are waging against America.

Economic Boots on the Ground

Not only is trade critical to the strength of the domestic economy, it strengthens partnerships and promotes U.S. influence abroad. As President Reagan wrote in his National Security Strategy, “open trade and cooperation among nations also help to cement alliances which in turn bolsters our coalition defense efforts.”

International trade signals a demonstrable commitment to allies and partners. American goods provide an American presence. They are economic boots on the ground. International trade agreements lower trade barriers, and thus increase the flow of American goods to other countries. These agreements institutionalize and increase the American presence. They make our engagement more regular.

Trans-Pacific Partnership Is a Pillar of the Asia-Pacific Rebalance

The United States is in the midst of what has been called “rebalancing” its attention and resources to the Asia-Pacific region. In some ways it is not new. The United States has maintained for quite some time robust military alliances and partnerships, and substantial trade relationships, with Japan, South Korea, Australia, and many other Asian-Pacific nations. The rebalance is more properly understood as recognizing and adapting to the current global distribution of power.

Secretary of Defense Carter has talked about how the Trans-Pacific Partnership “is probably one of the most important parts of the rebalance.” He explained it “would deepen our alliances and partnerships abroad and underscore our lasting commitment to the Asia-Pacific.”

The Trans-Pacific Partnership “is as important to me as another aircraft carrier.”

-- Secretary of Defense Ashton Carter, April 6, 2015

TPP can strengthen U.S. partnerships in the region because it establishes relationships that are about more than just trade. TPP is an expansive international economic arrangement, ordering many parts of our relationship with our partners beyond just lowering tariff barriers. It provides for many domestic economic reforms with respect to state-owned enterprises, labor and environmental standards, and intellectual property protection. It creates a far more comprehensive and meaningful interaction with our partners, which reaffirms and strengthens our relationships by broadening and deepening them.

The Asia-Pacific region is rife with historical animosities and disputes. China’s intimidation and aggressive posture in resolving those disputes must be met and countered. Its expansionist territorial and naval claims and practices require U.S. attention. TPP and other trade agreements can be a component of that response. It is a manifestation of the commitment generally demonstrated by trade relationships. It reassures other countries that the United States will not cede the region to China.

Constructing the 21^st Century Trade Regime: Us or China?

Completing TPP and advancing other trade agreements will go a long way toward answering the question of who will lead the development of the 21^st century trading regime. As President Obama pointed out in his national security strategy, “our rules-based [economic] system is now competing against alternative, less-open models.” It will be a choice whether the 21^st century international trade regime reflects the free and open system we advocate, or the protectionist, state-directed policies of China. If we do not write the rules, China will.

In its most recent report, the U.S-China Economic and Security Review Commission described China’s trade practices as carrying out “trade-distorting subsidies, discrimination against U.S. goods, and services, and technologies, ... [with] inadequate protections for intellectual property, among other barriers to free trade.” The U.S. Trade Representative report on China’s compliance with its WTO obligations reads like a litany of mercantilist practices. It was supposed to forsake those practices when it joined the organization. This is the exact opposite of the well-functioning international economic system with minimal distortions to trade that President Reagan sought.

China is becoming much more assertive in trying to write the rules of the international trading system. It already has extensive trade agreements with countries throughout the region and is pursuing more with wealthy countries like Australia and India. China is also attempting to become more assertive in its international economic policy by creating alternative institutions and models. Negotiations between 16 Asia-Pacific countries to create a Regional Comprehensive Economic Partnership are underway. It has been described as “an alternative trade arrangement to TPP” and excludes the United States.

The consequences of these alternative institutional arrangements are lamentable. One scholar has testified to Congress that Beijing is “advancing a lower-standards model of regional economic integration that could put American commercial interests at a disadvantage when competing in the region.” Another noted, “we’ll see much lower standards for environmental protection” and “a lower quality mode of economic integration; something that would be very much detrimental to our broader interest for greater economic integration in the region.”

The United States must lead the development and updating of the international trade regime. It can do so by aggressively completing international trade agreements – most immediately the TPP. Without trade promotion authority, however, the United States will cede to China the development of the international trade regime, especially in the Asia-Pacific region, undermining our rebalance policy.

President Obama has requested Trade Promotion Authority or spoken of the job-creating benefits of increased trade in every State of the Union address he has given. However, since the advent of the “fast-track” procedures, he is on pace to become the first president since Gerald Ford not to sign a single free trade agreement. That must change. Congress should enact trade promotion authority so presidents can strengthen and expand the open trading system that is so vital to our national security.