Getting Trade Right

An open, rules-based trading system was one of twentieth-century progressivism’s great triumphs. We are building on that today.

By Michael Froman

Tagged trade

We are in the midst of a major and important debate about the future of our country and its role in the world, whether the United States will lead or cede that role to others, and whether the global economic system will reflect our values and our interests or a very different set of priorities. Motivating this debate are tectonic shifts—globalization, technological change, and the rise of emerging economies—that are reshaping the global economy and bringing both opportunities and challenges to the American economy.

But in many respects, this debate is not new. The roots of the modern global trading system can be traced back to the end of World War II, and in the United States, the seeds of this debate were planted during the 1932 presidential race. Many of today’s concerns about trade took center stage during that campaign, which presented the American public with two competing visions of U.S. trade policy.

Accepting the Republican nomination that year, President Herbert Hoover promised: “I am squarely for a protective tariff. I am against the proposal of ‘a competitive tariff for revenue’ as advocated by our opponents. That would place our farmers and our workers in competition with peasant and sweated-labor products from abroad.” In fact, one of Hoover’s achievements had been the massive Smoot-Hawley tariff increase of 1930, which contributed to the depth and length of the Great Depression.

Forging a different path, Franklin D. Roosevelt declared that lower tariffs were necessary for a complete and permanent recovery. As he told an audience in Sioux City, Iowa, “I have not the fear that possesses some timorous minds that we should get the worst of it in such reciprocal arrangements…. [W]hen it comes to good old-fashioned barter and trade—whether it be goods or tariff—my money is on the American.”

The choice was clear, and so were the results. After taking office, FDR and his Administration negotiated aggressively to advance the interests of American workers and businesses overseas. Armed with the first version of trade negotiating authority, they struck 19 tariff-cutting trade deals between 1934 and 1939—with Britain, Czechoslovakia, Canada, and others. Boosted by these agreements, strong growth in U.S. exports complemented the New Deal’s domestic programs, helping the United States climb out of the Great Depression and into a position of global leadership.

Each of the succeeding 12 Presidents has built on this legacy, Democrats no less than Republicans. President Harry Truman continued FDR’s ambitious program of trade-liberalizing agreements. Presidents John F. Kennedy and Lyndon Johnson negotiated our biggest round of tariff cuts ever. And Presidents Jimmy Carter and Bill Clinton concluded three rounds of tariff reductions, leading to the creation of the World Trade Organization. Of the nine multilateral tariff-cutting agreements the United States has participated in since 1945, all but one were concluded by Democratic administrations. As successive administrations took on special interests and ensured that workers had job training and other assistance to help adjust to the impact of trade, the objective has never been more trade for trade’s sake, but rather more trade for the benefit of more Americans.

The fact that trade policy in the post-World War II era has been one of America’s most successful bipartisan projects is not merely a matter of historical accuracy. It helps explain why trade remains a rare area for cooperation even during an age of increasing partisanship. That cooperation was on full display in June, when Congress passed a comprehensive trade package—including the renewal of trade promotion authority, a job-training program, and tariff preferences designed to promote growth in developing countries—with bipartisan support. Although the domestic debate over trade policy is robust, the ultimate battleground for trade policy—and the nature of tomorrow’s global economy—is not between our parties, but rather beyond our borders.

Increasingly, the rules-based trading system that the United States has led since World War II is being challenged by alternative models that do not reflect our interests and our values. In the vast majority of China’s trade agreements, for example, there are no labor or environmental protections. Meanwhile, these agreements allow state-owned enterprises to benefit from generous subsidies and other advantages that undercut the competitiveness of other countries’ workers and businesses, including our own. They allow countries to force companies to relocate their operations or to transfer their technology and intellectual property in order to serve new markets. In these mercantilist models, the state is often absent where it should be present and dominant where it should be invisible.

The Trans-Pacific Partnership (TPP) is both an answer to this challenge and an improvement upon the tradition that began with FDR. Bringing together a diverse group of 12 countries representing nearly 40 percent of the global economy, TPP will reduce barriers to U.S. exports and raise standards in the Asia-Pacific region. It will level the playing field for American workers and businesses, giving them a fair shot in the world’s fastest-growing region and supporting more well-paying American jobs.

But TPP is more than an opportunity to spur growth. By giving the United States a leading role in writing the rules of the road for tomorrow’s global economy, TPP will help shape the broader environment in which that growth takes place. It will set the highest standards of any trade agreement to date, and all these standards will be fully enforceable, putting environmental and labor issues on equal footing with all other concerns. Accounting for the economic realities of today, TPP will also be the first trade agreement to address a number of cutting-edge issues—setting rules, for example, that help ensure the Internet remains free and open.

The central question of our time is not whether policies should promote growth, but whether they can promote the right kind of growth. From the high-tariff nationalism of the Hoover era to modern “state capitalism,” mercantilist approaches to trade have often favored the welfare of the most privileged—those with the resources to navigate, and the influence to shape, a system of unfair regulations. These models have sometimes achieved impressive growth in the short and medium term, but they have done so without sufficient focus on how the benefits of that growth are to be shared. As the flagship of President Obama’s values-driven trade agenda, TPP pursues a more ambitious goal: growth that is equitable, sustainable, and inclusive.

Equitable Growth

Trade is an indispensable part of what President Obama has called “middle-class economics—the idea that the country does best when everybody has got a fair shot, everybody is doing their fair share, everybody is playing by the same rules.” In keeping with this commitment, any trade agreement must be evaluated first and foremost on its economic merits: whether it will support more American jobs and strengthen the middle class.

Historically, few policies have helped American households as much as expanding trade. We tend not to focus on the consumer benefits of trade, but since World War II, trade liberalization has added nearly $13,000, on average, to each American family’s annual income. These gains have disproportionately benefited lower-income Americans, who spend a greater portion of their incomes on highly traded staples like food, shoes, and clothing. According to one recent study, American consumers in the lowest decile of income distribution owe more than half of their purchasing power to international trade. By contrast, Americans in the top decile gain only 3 percent in purchasing power through the benefits of trade.

Remaining barriers also disproportionately harm America’s poorest. For example, tariffs on luxury leather shoes are 8.5 percent, while tariffs on basic sneakers can reach 48 percent. Likewise, tariffs on acrylic sweaters are twice as high as those on wool sweaters and eight times the tariff on cashmere sweaters. Eliminating tariffs like these helps all consumers, but helps low-income consumers the most.

Although relatively unheralded, U.S. exports have already played a major role in our recovery from the Great Recession. The contribution of trade to the U.S. economy has grown, with exports now making up over 13 percent of GDP, one of the highest levels ever measured. From 2009 through 2014, the increase in U.S. exports contributed nearly one-third of our economic growth. Last year was our fifth year for record-breaking exports in a row, with exports supporting 11.7 million jobs, an increase of 1.8 million jobs since 2009.

These are jobs with solid paychecks and prospects for the future. On average, export-related jobs pay up to 18 percent more than jobs not related to exports. They’re also more secure, because exporting facilitates diversification and reduces risk. According to one study, businesses that export are 9 percent less likely to go out of business during an average year. Studies also show that businesses that export usually grow faster and hire more. With U.S. wages showing signs of rising after decades of stagnation, increasing our exports is a common-sense component of any long-term strategy for raising middle-class paychecks.

Paycheck premiums from exporting are apparent across all industries and business types, but for reasons that have not been fully explored, these premiums are highest in U.S. firms owned by women and minorities. On average, women-owned businesses that export employ roughly five times as many workers and their payroll per worker is $15,000 more annually than women-owned businesses that do not export. Compared to their non-exporting counterparts, African-American exporters employ roughly four times as many workers, at over $19,000 in additional payroll per worker. Considerable benefits from exporting are evident among Asian-American and Latino-owned businesses as well.

The potential gains for our workers and businesses are far from exhausted. When Americans do business abroad, they face an average tariff twice as high as our own, and often much higher. The persistence of unevenly high tariffs on U.S. exports is true even with many of our closest trading partners, whose markets are generally open. In addition to boosting our exports, removing tariff barriers would raise U.S. manufacturing wages anywhere from 1 percent to 12 percent, depending on the sector involved. Foreign tariffs depress our sales and reduce our economies of scale, so removing them allows businesses to sell more, become more productive, and pay workers more.

As tariffs have declined globally, other barriers to trade have taken on greater importance. These “non-tariff barriers” have the same export-limiting impact as traditional tariffs. In Japan, for example, there have been instances when regulations have slowed down the introduction of American autos with cutting-edge technology, including green technology. In addition to the environmental impacts, costs like these are borne by everyone in the supply chain, from large American auto companies and their employees to the thousands of small businesses that sell parts, advertising, logistics, and other related products and services. TPP will address a number of these barriers and take steps to prevent the emergence of future obstacles to U.S. exports.

For a glimpse of the cost posed by traditional tariffs, consider what the playing field currently looks like for Americans trying to do business in the Asia-Pacific region. At present, American exports to certain TPP partners face tariffs of 70 percent on autos, 50 percent on farm and construction machinery, and several hundred percent on certain agricultural products. TPP will eliminate most of these barriers, helping our exporters sell more abroad and hire more workers at home. By 2025, TPP is estimated to generate $305 billion in additional global exports per year, according to a study by the Peterson Institute. Annual U.S. exports are estimated to increase by $123.5 billion. That’s more than the value of all goods exported from Boston, San Francisco, Chicago, and Portland, Oregon, in 2014, combined.

If we act now, we can position our middle class for even greater gains down the road. By 2030, it is estimated that two-thirds of the world’s middle class will call Asia home. These countries will be the world’s fastest-growing buyers of everything from cars and cosmetics, to streaming movies, to fresh fruit and vegetables. Their governments and businesses will be the fastest-growing investors in everything from infrastructure, to aircraft, to satellites. Thus, the rise of Asia’s middle class can become an engine for strengthening America’s middle class. [See “Trade: Boosting Exports to China,” Issue #29.]

Sustainable Growth

TPP’s strong and enforceable environmental standards are part of an approach to enhance environmental protection that also promotes greater fairness in the global trading system itself. When Americans have to compete against foreign companies that are not required to maintain environmental standards, the result is a competitive disadvantage for our businesses and workers as well as a threat to the environment. TPP represents a powerful tool for overcoming the challenges of collective action that have plagued environmental efforts in the past. It includes incentives for participation, mechanisms for sharing information and facilitating cooperation, and serious consequences for non-compliance.

These tools will help protect oceans, forests, and wildlife in one of the most ecologically significant regions in the world. For the first time in any trade or environmental agreement, TPP will prohibit some of the most harmful fishing subsidies, such as those provided to illegal fishing vessels. It will do so for a group that includes seven of the world’s top 18 fishing nations, accounting for about a quarter of global marine catch and seafood exports. TPP partners will also be required to promote the long-term conservation of sharks, whales, and sea turtles, and to implement measures to combat illegal fishing, including inspections and seizures at ports and monitoring, surveillance, and enforcement systems to curb trade in pirated fish.

An opportunity of similar scale exists to tackle illegal logging and wildlife trafficking. Trade in illegal timber can run as high as $100 billion annually, and the Asia-Pacific region exports nearly one-quarter of the value of global timber and wood products. TPP partners are also major source, transit, and destination countries for legal and illegal wildlife products, contributing to what is estimated to be up to $200 billion in annual transnational environmental crime—including wildlife trafficking. The victims of these crimes include familiar targets such as the elephant and rhinoceros, as well as relatively unknown, highly endangered species such as the pangolin, a scaly, ant-eating mammal that is the world’s most trafficked animal.

Beyond threatening biodiversity, environmental crime is an issue of national security. Organized crime and terrorist organizations are believed to be involved in poaching and transporting ivory and rhino horn across Africa. Groups like the Lord’s Resistance Army in Uganda and Al Shabab in Somalia have also been involved in trafficking wildlife and timber products. In some cases, these networks are likely the same or overlap with those that deal in other illicit goods, such as drugs and weapons.

To combat these threats, TPP includes commitments against wildlife trafficking and will provide a platform for increased regional cooperation, capacity building, and technical assistance. Helping translate these commitments into action, TPP partners with large markets—such as Canada, Australia, and Japan—bring significant resources to the table, while every trading partner offers important experience and intelligence about the environmental threats operating within and across its borders. Through TPP, we can share more information, effectively implement new commitments, and improve enforcement of national laws.

The potential benefits extend well beyond the Asia-Pacific region. Due to the global nature of today’s markets, both legal and illicit, action through TPP can produce a number of positive spillovers. By combating illegal fishing, we will support coastal communities around the world that rely on fishing as well as the more than 2.9 billion people who depend on fish as a vital source of protein. Similarly, by promoting sustainable forest management and legal timber trade, TPP will help protect threatened and endangered species as well as the livelihoods of communities that depend on these ecosystems. By taking a hard line against the illegal take and trade of wildlife, we can help stave off extinctions worldwide.

Moving sustainable growth from theory to practice requires more than moral suasion. Challenges to collective action loom large, and effective strategies for overcoming them are in short supply. Using the leverage of market access and the tools of trade enforcement could be one of the most powerful mechanisms we have to mobilize effective action. Making the most of these tools, commitments in TPP’s environment chapter will be enforced through the same dispute-settlement procedures and mechanisms available for disputes arising under its other chapters, including the full range of trade sanctions.

The urgency of these problems is difficult to exaggerate. Research indicates that animal populations have declined to roughly half the size they were in the 1970s. If current trends continue, marine capture fish stocks could collapse, and species already on the brink, like rhinos and elephants, could go extinct within a century, if not a few decades. TPP can help address these alarming trends and demonstrate that environmental protection is both an economic and a moral necessity.

Inclusive Growth

Like environmental standards, labor standards were addressed only in passing, if at all, in trade agreements until relatively recently. But thanks to years of advocacy by labor leaders and supporters in Congress, there is now a consensus that international labor standards should be core components of U.S. trade agreements. This consensus was locked into law when Congress passed a Trade Promotion Authority bill earlier this year specifying for the first time that a principal negotiating objective of any future trade agreement should be the inclusion of binding and enforceable labor provisions.

Continuing this progress, TPP will spread basic labor rights across a diverse range of countries at varying levels of development, underscoring that no country is too poor or underdeveloped to respect workers’ basic dignity, protect children, and outlaw forced labor. With countries in which basic labor rights do not have a long history, we’re closing in on commitments for introducing basic freedoms—like the right of workers to organize and bargain collectively—that have been part of the American social contract, as well as the broader international consensus on labor, for decades.

The sum of these efforts is an agreement that will deliver real protections for workers. Under TPP, countries will be obligated to reform so that their laws and practices are consistent with the International Labor Organization’s fundamental labor rights. Among these rights are freedom of association and the right to collective bargaining, and freedom from child labor, forced labor, and employment discrimination. TPP is the first trade agreement that will include requirements for countries to adopt laws on minimum wages, work hours, and occupational safety and health; to act against trade in goods produced by forced labor, including such goods made outside TPP countries; and to accept special protections against degradation of workers’ rights and working conditions in “export processing zones,” where labor problems are often at their worst.

We are working with our TPP partners on the steps they’ll need to take to meet these obligations. For example, Vietnam will need to allow workers to form and join independent labor unions. Brunei will have to pass a minimum wage law and adopt laws to eliminate discrimination in employment. Malaysia will need to make a range of legal and institutional changes, including addressing forced labor and human trafficking. While each country requires a tailored approach, the goal is the same: to make trade work better for workers.

Ensuring that these commitments are carried out will require vigilance, and the Obama Administration has made enforcement a top priority. In 2010, we filed a labor case against Guatemala that is the first-ever labor case brought under any trade agreement. President Obama also took action against violations of workers’ rights under U.S. trade preference programs, suspending Bangladesh’s benefits under the Generalized System of Preferences and withdrawing Swaziland’s benefits under the Africa Growth and Opportunity Act. As this track record demonstrates, we will work closely with our partners to help them meet their obligations. But we will not lower the bar, and when progress is insufficient, we will not hesitate to take action.

TPP will more than quadruple the number of people covered by enforceable core labor provisions. In doing so, it will raise the living standards of hundreds of millions of people across the region—a good in its own right, a means of leveling the playing field between American workers and the workers with whom they compete, and a step toward building markets for American exports. Done right, trade policy can help restore the connection between hard work and honest reward.

Digital Freedom

In addition to protecting labor rights, TPP will empower citizens by safeguarding one of the most promising areas for future growth: the digital economy. Since the beginning of this century, the population of Internet users has grown from 360 million to three billion, and data flows have exploded 400-fold, creating new opportunities for exchanging ideas, goods, and services. While dramatically reducing the cost of moving products and services across borders, the Internet has also transformed the products and services we buy and how we buy them.

As these trends continue, we’ve only scratched the surface of the digital economy’s growth potential. The International Trade Commission has estimated that removing measurable foreign barriers to digital trade could add more than $40 billion to the U.S. economy, increase U.S. wages by as much as 1.4 percent, and create as many as 400,000 jobs. The Economist projects that an estimated 80 percent of adults across the globe will have an Internet-enabled phone by 2020, further expanding the ability of people to connect, communicate, and do business, especially in rural and impoverished areas. Advances in technology could also create new exporters in the telemedicine, research and development, and distance education fields, among others. As the world’s leader in services exports, the United States is primed to excel in these areas. But the gains have not been limited to tech companies. According to McKinsey, three-quarters of the value created by the Internet has accrued to traditional industries like manufacturing.

Elsewhere in the world, these trends are creating new opportunities to promote development, reduce poverty, and improve countless lives. Since 2000, Internet user populations in Peru and Vietnam have grown fivefold and 200-fold, respectively. Thanks to expanding Internet access and advances in telemedicine, American ophthalmologists now help train and provide real-time consultations to doctors in Hanoi. Likewise, online banking services connect American lenders with small-business owners in rural Peru, providing access to credit for masons and mechanics to buy tools. In cases like these, our interest in promoting trade and investment to achieve growth and high-wage employment here at home dovetails with a longstanding commitment to alleviating poverty, spurring development, and supporting better lives for the poor abroad.

To realize these gains, however, digital freedom must triumph over digital protectionism. Around the world, policies restricting the free flow of data and the openness of the Internet are on the rise, threatening to effectively balkanize the Internet. Among the most pernicious are barriers to cross-border data flows, such as those imposed by China’s Great Firewall. Policies requiring companies to store data locally present another serious threat, making costs prohibitively high for many small businesses, curtailing access to global services, and stifling innovation. [See “Beyond Borders: Fighting Data Protectionism,” Issue #34.] Often justified under national-security concerns, these policies carry significant economic costs for domestic workers and consumers as well. If these trends continue, we risk forfeiting not only future growth from the digital economy, but also its current benefits.

Pushing back against these trends, TPP offers a number of innovations that will help keep the Internet open and free. The agreement will include obligations to ensure that companies and consumers can access and move data as they see fit and guarantees that companies will not have to build expensive and unnecessarily redundant data centers to serve a market. At the same time, TPP will make these commitments subject to important safeguards, such as privacy and consumer protection. For example, TPP will include obligations for parties to stop junk emails, phishing schemes, and other unsolicited commercial electronic messages. While each country will retain the policy space necessary to implement its own privacy laws, TPP will require them to be transparent, predictable, and in the public interest. Complementing these features, strong and balanced intellectual property rules will help our partners join in the development of the most innovative, Internet-enabled products and services in the world.

Above and beyond its impact on commerce, digital freedom goes to the heart of what it means to live in the information age. Ensuring that the rules of the road for global trade promote the free flow of information and resist artificial barriers has broad ramifications. When data flows are obstructed, everyone from the immigrant keeping in touch with relatives, to the work-from-home entrepreneur connecting with customers, to the aspiring high school blogger can be affected. With TPP, we are working to ensure that the Internet remains as vibrant a marketplace for ideas and expression as it does for goods and services.

Economic Development

Recent history highlights that trade can be a powerful tool for breaking the vicious cycle of economic stagnation, poverty, and ill health that traps many vulnerable populations. In the 1990s, developing countries that lowered trade barriers more than other developing countries grew more than three times faster. Between 1991 and 2011, developing countries’ share of world trade doubled and nearly one billion people were lifted out of poverty.

In place of a vicious cycle, trade helps create a virtuous cycle of growth, poverty alleviation, and healthier societies. Higher growth, more employment, and higher incomes also create more resources with which to finance investments in anti-poverty programs and provide citizens with better access to health services. This cycle depends on a number of other factors, such as institutions, rule of law, and investment in infrastructure and education, but it breaks down when trade is not part of the equation.

Contributing to these virtuous cycles, TPP will spur significant growth both among its participants and globally. According to the Peterson Institute, TPP will add an estimated 11 percent and 6 percent to the GDPs of Vietnam and Malaysia, respectively, by 2025. Not counting U.S. income gains, the same study estimates that TPP will add $147 billion to global GDP by 2025. That’s over four times the size of the current U.S. foreign aid budget and roughly as much as all government foreign aid programs in the world combined. During a period of slow and uneven growth worldwide, and when many traditional policy tools are constrained, the gains generated by TPP could provide much-needed stimulus to the global economy.

Sound trade policies also bolster food security. By lowering tariffs on agricultural goods, ensuring that non-tariff measures are science-based, and disciplining export bans that lead to food shortages, TPP will increase access to affordable, safe, and nutritious food. Furthermore, TPP will help minimize disruptions in the shipping of food by strengthening customs cooperation and trade-facilitation measures. TPP’s transparency commitments will also bring greater clarity to government policies that impact food supplies, reducing uncertainty for agricultural producers and helping prevent future distortions of the global market.

A number of additional features in TPP will contribute to global health. For example, TPP will eliminate duties on medicines and medical devices, thereby decreasing costs for health-care systems, hospitals, clinics, aid organizations, and consumers. Take Vietnam, where TPP will eliminate tariffs of up to 5 percent on a range of medicines, including antibiotics, corticosteroids, and anti-malarial medications, as well as tariffs of up to 7 percent on essential medical supplies like gauze and bandages. TPP will also contribute to better health outcomes by liberalizing rules that make it easier to deliver health services and by strengthening trade-facilitation efforts that make it easier to provide drugs to patients.

TPP will also help combat the sale of dangerous counterfeit drugs, which analysts estimate are responsible for between 100,000 and one million deaths every year. It’s impossible to know how many more human beings are harmed, both physically and financially, by the purchase of counterfeit medicines, and it’s clear that more must be done not only to improve affordability and delivery, but also to increase reliability and safety. TPP will help stem the sale of counterfeit drugs by strengthening customs and criminal enforcement measures. For the first time in any trade agreement, TPP will commit trading partners to imposing heightened penalties on counterfeits that threaten health and safety.

Our commitment to global health is evident in TPP’s intellectual-property standards as well. Our approach is focused on striking a balance between incentivizing the development of new lifesaving medicines and ensuring access to affordable medicines, particularly in developing countries. Generic drugs play a central role in ensuring access to affordable medicines in the United States and around the globe, as will biosimilars in the future. The key is to ensure that there is an ecosystem that fosters innovation throughout the region and promotes access to the results and benefits of that innovation. TPP will encourage innovation across the Asia-Pacific region while offering flexibility to our developing-country trading partners based on their particular situations and existing systems. Striking this balance, TPP also explicitly incorporates the Doha Declaration on TRIPS and Public Health, which affirms the right of countries to take measures to protect public health, including responding to epidemics such as HIV/AIDS. Importantly, nothing in TPP will undermine or weaken the Affordable Care Act, Medicare, Medicaid, the Veterans Health Administration, or the role of these programs in providing Americans with access to affordable health care.

All of these efforts are part of a development strategy rooted in promoting economic growth, one that emphasizes trade, along with investment and assistance. From its labor and environmental protections to its focus on good governance, transparency, and participation, TPP will help address some of the most significant development challenges today. For example, TPP will commit parties to adopting or maintaining laws that criminalize acts of corruption in matters affecting international trade or investment. With a strong focus on cooperation and capacity building, we will work to ensure that TPP doesn’t just reflect high standards in principle, but high standards in practice.

Shaping Tomorrow

Globalization, technological change, and the rise of emerging markets have had a profound effect on the international economy, leading to legitimate concerns, including about their impact on jobs and wages in the United States. Ever since Herbert Hoover’s time, there has been a temptation to make trade policy a proxy for these concerns, but it would be a mistake to conflate globalization with trade policy. Globalization is a force; trade policy is how we shape globalization. Trade agreements are among our best tools for harnessing these trends and ensuring that the global economy reflects our values and our interests.

That said, just as trade agreements are not the cause of all of the economic challenges we face, nor are they alone the solution. As President Obama has said, “Past trade deals didn’t always live up to the hype.” Trade agreements—done right—are not a panacea, but a necessary part of a larger economic strategy. TPP will build and improve upon past agreements, based on our experience over the last 30 years. For example, as Senator Obama promised when he was a candidate for President, TPP will renegotiate and upgrade NAFTA to include fully enforceable labor and environmental obligations.

Ultimately, the question is not whether TPP is perfect, but whether it substantially furthers our interests and our values and whether we are better off with it or under the alternative scenario. In today’s fast-changing world, the status quo will not hold. In Asia alone, hundreds of agreements have been struck in recent years, the vast majority of which do not share our commitment to ensuring that growth is equitable, sustainable, and inclusive. Without TPP, we risk seeing the fastest-growing markets of middle-class consumers cut off from U.S. exporters. Environmentally damaging practices will continue unchecked. Vulnerable segments of the world’s fastest-growing populations will be without basic rights and without important tools to press for them. The Internet’s capacity as a vehicle for both commerce and expression will be undercut by policies that favor control over freedom. Taken together, these developments would present future generations of Americans with a much less attractive future than the status quo, let alone a future that reflects the promise of TPP.

In an address that FDR drafted but tragically did not live to deliver, he planned to tell our nation that “the only limit to our realization of tomorrow will be our doubts of today.” As we work to realize a better tomorrow, let there be no doubt that the United States must lead on trade.

To see Jared Bernstein’s response to this essay, click here.

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Michael Froman is Vice Chairman and President, Strategic Growth at Mastercard and former U.S. Trade Representative and Deputy National Security Advisor for International Economic Affairs.

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