TSG IntelBrief: The American Shift Towards Bilateralism
January 24, 2017

The American Shift Towards Bilateralism

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Bottom Line Up Front: 

• On January 23, President Donald Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP), a massive trade bill meant to bolster the country’s geo-economic power in Asia.

• White House Press Secretary Sean Spicer said the withdrawal from TPP demonstrated the new administration’s renunciation of multilateral deals in general, in preference of point-to-point bilateral agreements.

• The new administration’s preference for bilateral geopolitics is evident in its criticism of the UN, EU, and NATO, as well as the economics of trade deals such as TPP and NAFTA.

• The U.S. move towards a bilateral era runs counter to decades of multilateralism in geopolitics, economics, and conflict resolution.

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The U.S. withdrawal from the Trans-Pacific Partnership (TPP), a sweeping trade deal that includes 12 countries, was all but a foregone conclusion given the recent election of Donald Trump. Still, by signing an executive order formally withdrawing from the deal on January 23, President Trump made clear his administration’s larger rejection of multilateralism. While the focus in rejecting TPP—and talk of perhaps renegotiating the North American Free Trade Agreement (NAFTA)—was on economics, the geopolitical implications of multilateral trade deals and organizations go far beyond financial concerns. From trade to terrorism, the new U.S. administration will seek out bilateral cooperation and agreements, with the focus of ensuring the best outcome for the United States. How this happens in practice in a world that has long swung towards multilateralism and globalism remains uncertain.

Domestic political sentiment in the U.S. has rarely evidenced strong public support for many aspects of multilateral trade deals such as TPP and NAFTA, despite general support for the notion of free trade. Criticism of sweeping trade deals often includes allegations of the loss of national sovereignty, skepticism over secret negotiations, the empowerment of multinational corporations at the expense of local workers, and a belief that other countries benefit disproportionately from such agreements. These criticisms echo a broader trend that views multilateral and multinational organizations as cumbersome and often ineffective in dealing with international crises.

Proponents of TPP argue that free trade, despite its acknowledged shortfalls, remains a powerful force for global economic growth and an effective tool to raise living standards. However, opponents of free trade quickly point out that the deleterious effects of the global economy fall disproportionately upon local communities and constituents that had no role in crafting international economic policy.

In addition to the domestic economic promises of the TPP, the deal was heralded as the geo-economic compliment to the military and political components of America’s strategic pivot to Asia. The deal was crafted to reflect that the global economy’s center of gravity—and therefore the locus of political and military power in the 21st century—is shifting towards Asia. The TPP was meant to simultaneously bolster the U.S. geo-economic position in the region, while economically underpinning the bonds between U.S. allies seeking to balance the rise of an increasingly assertive China. Thus, the official demise of America’s role in TPP casts doubt on the shelf-life of America’s geo-economic predominance in Asia.  

During his first official press conference, White House Press Secretary Sean Spicer made very clear the new administration’s intention to pursue bilateral deals, arguing that a small number of partners facilitates enforceability, and ensures that parties can more easily renegotiate or withdraw from agreements. While this approach makes sense in isolation, the interconnected nature of trade and conflict resolution in the 21st century obviates the luxury of isolation. By design, pacts such as NATO, the EU, the UN—and to a different degree trade deals like TPP and NAFTA—are binding, long-term agreements which benefit all parties over time, but not necessarily at all times. It remains to be seen how far the U.S. will turn towards bilateralism, and if this trend will, as suggested by the Trump administration’s comments, come to dominate every facet of U.S. foreign policy.

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