On Global Trade & Investment
Published Three Times a Week By:
The Global Business Dialogue, Inc.
Washington, DC   Tel: 202-463-5074
No. 52 of 2016
Filed from Portland, Oregon

Click here for the September 22 quote from Prime Minister Justin Trudeau.  

"The Asia Pacific is absolutely going to be the centerpiece of growth and innovation in the first 20 or 30 years of this century."

Amb. Tim Groser 
September 15, 2016 
New Zealand's Ambassador to the United States, H. E. Tim Groser, kicked off GBD's Diplomatic luncheon series at Toyota with a presentation that focused clearly and forcefully on TPP and the hope that Congress will approve the agreement - and an implementing bill - in the lame duck session after the election.

That objective was palpably there in every element of his speech.  Even so,  it was a wide ranging set of remarks that touched on the basic arguments for trade, the shifting patterns of trade policy developments, and the new realities of America's power.  Today's quote was taken from the strategic segment of Ambassador Groser's remarks.  Here is how he led up to the above observation:

"So, where are we strategically?  It is still true - I would say even more true when one looks at the troubled environment in ... Europe - that the Asia Pacific is absolutely going to be the centerpiece of growth and innovation in the first 20 or 30 years of this century.  And it is absolutely correct to say that the region has still, up to now, been quite comfortable both within the US security umbrella and following the agenda set largely by Washington with very strong intellectual contribution from the Brits during the Second World War and up to 1947.  ...
"I mean this system, essentially made in Washington, but not made in Washington just for the United States, but made in Washington for the rest of the world.  I've called it many times the most benign dictatorship I have come across. ... [U]sing massive American might after the war, ... [it imposed] on the rest of the world - including the defeated Axis powers - a framework that allowed everybody to benefit from it. 

"Now, for the most part this is very clear.  The rest of Asia Pacific has been quite comfortable following the U.S. agenda.  But ... the United States is no longer in a position where, if it loses the plot politically, that that agenda just stops and we wait for Washington. That is gone.  ...

"If Congress fails to do the right thing, we don't need to ask ourselves, I wonder what the counterfactual is because we know what the counterfactual is.  And the counterfactual is the following.  We and Australia will continue with the other TPP.  It's not nearly as good a model for investment and trade integration in the Asia Pacific, but it is another giant plurilateral trade agreement called RCEP, Regional Comprehensive Economic Partnership, which is 16 countries.  ...

"I mean if this agreement doesn't go through, do not expect your closes friends and allies and partners to sit there in a hole.  We will not.  We will take whatever - with great heaviness of heart and regret - we will take whatever options we have. 

"So that is the strategic point.  I think it is the most important point politically in this country.  I think it's very well understood in the U.S. Congress.  ... I believe there is a far more sophisticated appreciation of this reality than people believe on the part of your political representatives.  And that's why I don't think TPP is dead.  I think there is every chance still of doing this.  But it will require some very, very courageous thinking and action from the 9th of November onwards." 


At the outset of his remarks, Ambassador Groser noted that " The theoretical case for trade is overwhelming," and went on to show that " The case in practice is equally overwhelming."  

As for the criticism now being leveled at U.S. trade policy, he took note especially of the idea that it has undermined American manufacturing.  Not so, Ambassador Groser said.  Citing statistics from the National Association of Manufacturers, he pointed out that "In the past 25 years, U.S. manufacturing exports have quadrupled and are now around $1.4 trillion," and they support some 12.5 million high-paying manufacturing jobs.

The last point we'll mention here - it might just as well have been the first - was what Ambassador Groser called t he concentric ring theory of trade liberalization.  Liberalization through multilateral rounds in the GATT/WTO might have been a better way to go, but, after the Uruguay Round, it stalled.  Now the world moves from bilateral agreements to ever larger aggregates of agreements.

As Ambassador Groser put it: "You start off with bilateral agreements, and then you merge them to larger and larger aggregations. Many people have forgotten that the NAFTA itself started off as a bilateral FTA with Canada.  And then you added Mexico." 
To repeat, this was a very rich presentation, and we are bound to mine it for more nuggets in the days ahead.  His message, however, was tightly focused: Congress should approve TPP in the lame duck.
The sources for today's entry were Ambassador Groser presentation at the GBD lunch on September 15, the unpublished audio tape of that event, and our informal transcript of it.


Or Other GBD Notices, click below.
©2016 The Global Business Dialogue, Inc.
1140 Connecticut Ave., NW, Suite 950
Washington, DC   20036
Tel: (202) 463-5074
R. K. Morris, Editor