Event: in the Obama era, the United States was the most active promoter of the TPP agreement. If trump leads the United States to “retreat from the crowd”, it is the inherent brand of Republicans; After China joined RCEP and applied to join the cptpp, the Democrats chose to refuse to join the cptpp. As the speaker of multinational interest groups, why did Biden refuse to join cptpp? What will be the new focus of the United States in the Asia Pacific Economic and trade field?
Core view:
The traditional trade agreement cptpp is not the most preferred choice of the United States. For American politicians, the core opportunity of joining the TPP / CPP is to open the Asian market with lower tariffs and trade barriers. The cost is that it will lose the support of labor organizations, environmental protection organizations, agricultural organizations and medical security organizations. However, politicians of both parties, as speakers of different interest groups in the United States, unanimously chose to reject TPP / cptpp:
For the Republican trump, the foundation of governance lies in American workers and farmers, and withdrawing from the trade agreement is in line with his election platform and ruling foundation. After trump took office, he launched a round of economic and trade negotiations with major trading partners on Shenzhen Agricultural Products Group Co.Ltd(000061) and trade barriers to industrial products.
For Democrats, Obama, Hillary Clinton and Biden made different choices at different times. Obama is a firm supporter of the TPP, while Hillary Clinton and Biden have changed from supporters of the TPP to opponents of the TPP / cptpp. Democrats believe that there are three reasons for the reversal:
First, over the past decade, the control of the Republican Party in both houses has gradually increased. The Democratic Party has an unstable foundation in power. It should take the middle line and win the votes of groups such as the labor organization in order to win the greatest support.
Second, the hollowing out of American industry is becoming more and more serious, and the free trade agreement is difficult to open a wider range of Chinese market. If the Chinese manufacturing industry seen in the Obama era is still at the back end of the industrial chain, the thinking of politicians is still limited to traditional economic and trade agreements; In the Biden era, with the gradual emergence of China’s dual cycle design idea and China’s independent, controllable and continuous promotion, it is enough to make American politicians realize that it is difficult to open the Chinese market with traditional trade agreements.
Third, the upgraded North American trade agreement led by the trump government has partially solved the problems of cheap labor and terminal market. In 2018, trump negotiated an upgraded version of the North American trade agreement, which not only solved the demand for low-cost labor by multinational enterprises, but also introduced the minimum wage clause in Mexico, so as to obtain the consent of labor organizations. After the upgraded North American trade agreement came into force in 2021, Shenzhen Agricultural Products Group Co.Ltd(000061) , machinery, electromechanical, medicine, steel, chemical and other categories, the export growth of the United States to Canada and Mexico increased significantly. Canada and Mexico account for 34% of U.S. exports, much higher than 8% of exports to China (January November 2021).
Abandoning the cptpp, the Democrats\’ idea of “India Pacific economic framework”: supply chain security and core technology control. Democrats represent the side that benefits from globalization. They not only want to make profits from the global industrial chain, but also want to maintain a dominant position in the field of cutting-edge science and technology. Therefore, the United States has not only released mitigation signals to China in the field of non core products, including supplying goods to China and Semiconductor Manufacturing International Corporation(688981) and launching tariff exclusion list, but also increased its blockade against China in the core field, and United its allies to realize “de Sinicization” in the supply chain.
The “Indo Pacific economic framework” repeatedly mentioned by Biden and U.S. Secretary of Commerce Raymond also basically conforms to these two intentions: on the one hand, increase investment in core technologies such as chip and digital economy, as well as supply chain security and sensitive infrastructure, so as to ensure the stable profits of multinational interest groups behind them, and unite allies such as Japan and South Korea, Gradually realize “de Sinicization”; On the other hand, we should strengthen the control of intellectual property rights, information security and personnel exchanges, block the diffusion of core technologies in the Asia Pacific region in the name of “protection”, and consolidate our dominant position in the field of core technologies.
