As APEC leaders get together this weekend in Peru, they could be forgiven for looking back nostalgically at Barack Obama’s time in office and wondering whether the world will ever be quite so safe and prosperous again. Because if anyone can further bankrupt America and send the global economy into a tailspin it would be serial bankruptee come President-elect Donald Trump – and the outlook really isn’t all that good. Promising huge increases in military and infrastructural spending at the same time as you’re also promising to cut income and corporate taxes looks like Reagan-era looniness is back in fashion.
You know the drill. Time and again – see Reagan in the 1980s, the state of Kansas today – the ideologues of the right cut regulations and deliver tax cuts in the simple minded faith that this will unleash a wave of entrepreneurialism that will lift everyone’s boat. It doesn’t work. Reagan failed, and that failure sunk his immediate successor, the hapless George H. W. “Read My Lips, No New Taxes” Bush who had to break his promise on taxes in order to protect the revenue. Bill Clinton raised taxes and the US prospered. Dubya cut them again, ruinously. Barack Obama restored some sobriety after the GFC, just in time for Trump to come along and promise another foolhardy spending spree and tax cutting raid on the revenue. There are very good reasons to be afraid of the consequences. In effect, US voters have just put the levers of the world economy into the hands of a failed businessman who has repeatedly shown a cavalier attitude towards the care of other peoples money.
So there are reasons to be nervous in Peru. With understandable trepidation, the APEC leaders will be waiting to see how much of President-elect Donald Trump’s inflammatory campaign rhetoric will be enacted once he’s in the White House. For New Zealand, trade policy will be a litmus test. Over recent weeks, the Key government has continued to pass legislation to enact the Trans Pacific Partnership deal that Trump has vowed to scuttle. Arguably, we would be better off shifting our focus to the rival regional trade deal being promoted by China and India.
Currently, trade policy is not a top priority for the Trump transition team. Cutting taxes, and scrapping Obamacare are their main concerns… and gee, its proving to be tougher than they thought. How do you keep the bits of Obamacare that the voters like, while scrapping the bits that are ideologically impure? Answer: you can’t. In this respect, the Trump people are exactly like Boris Johnson – who is still discovering the hard way that you can’t actually keep all the good bits of being in the EU, after you’ve dumped the immigration-related ‘free movement of people’ bits that you didn’t like. It’s a cruel world like that. People don’t give you everything you want.
Trade policy matters to us, though. We’re a trading nation. Ultimately, the Key government will have to make a call (and plan accordingly) on whether Trump seriously aims to scrap the TPP or alternatively, wants to change it in a way that serves US corporate interests more comprehensively.
If Trump does choose to “fix” the TPP, what extra concessions would New Zealand be prepared to make? All year, Republican Party chieftains have railed against the TPP’s claimed ‘failures.’ Supposedly, the current agreement (a) fails to crack down on alleged currency manipulation by China (b) allows member nations to regulate tobacco marketing for health reasons and (c) fails to provide US drug companies with a long enough term of market dominance for their new medicines. All grievous sins, in Republican eyes.
Should New Zealand agree to meekly comply with such changes, in order to retain our modest gains on dairy access? Hell no. Conceding on medicine patents could cost us millions. Targeting China over its currency would also be fraught with risk. Arguably, Trump’s criticisms are largely out of date. He’s railing against a historical problem that no longer exists. Yes, between 2004-2011, China certainly did keep its currency artificially low to boost its exports, but not so much recently. If anything, China’s leaders have been frantically pumping money into the country’s currency, to keep it from falling even faster.
There’s a wider issue. To indulge Trump, can we afford to endorse a trade war that he may want to pick with China, which is our biggest export destination? Australia and New Zealand both rely heavily on demand from China to keep their economies afloat. Enough concerns already exist about China’s debt problems and mortgage bubble without Trump throwing another spanner into the works. For that reason, New Zealand should be telling Trump point blank that any TPP “fix” that targets China’s currency is not something that we could support.
There is another option. The major trade deal currently on the table is the Regional Comprehensive Economic Partnership (RCEP). Unlike the TPP, this pact includes China and India. It has real flaws: the investor-state dispute resolution mechanisms are just as dangerous and obsolete. But at least the RCEP is not saddled with the copyright issues and drug patent problems that have plagued the TPP – and which always had more to do with enshrining market dominance for US corporates than with fostering genuine free trade. However, the RCEP doesn’t include the US, and New Zealand would be left without a trade pact with the Americans. Hey, maybe we could apply to join NAFTA. That’s up for grabs again, under Trump.
Trade, as the old saying goes, is war by other means. Both the TPP and RCEP are platforms for advancing strategic influence in the region as much as they are about fostering free trade. Question being: does our future lie with our traditional allies, or with Asia? For a few more months, we can still enjoy the luxury of keeping both of those trade balls in the air – but if Trump follows through on his rhetoric, choosing sides is likely to become a necessity. Which way will we jump?
America, Still Not So Great
While we’re mulling over our choices on trade…here’s a scary quote on Defence from someone tipped for one of the top national security adviser posts in the new Trump administration:
Widely considered to have made the short list of candidates for top national security jobs in Donald Trump’s administration, Rep. Duncan Hunter of Alpine pledged Friday to make the Pentagon great again after eight years of Democratic control.
“I’m excited about a warrior culture, a warrior mentality put back into the (military), as opposed to a corporate culture ruled over by the bureaucrats and lawyers,” Hunter, a Republican member of the House Armed Services Committee, said in a phone interview.
“The warrior culture is going to get infused into (the department) again. It’s probably going to take a while because a lot of guys who had that mentality are no longer there, but maybe people’s true colors can show now, a little bit,” he added.
Once were Pentagon warriors, will be so again. This next bit is both creepy and scary. Steve Bannon, the guy who turned Breibart News into a cesspit of US journalism has just been appointed as Trump’s chief strategist and senior counsellor. At the Foreign Policy site, David Rothkopf has compiled a useful list of some of the headlines that Breibart ran under Bannon’s tutelage. For example:
“Bill Kristol: Republican Spoiler, Renegade Jew,” “There’s No Hiring Bias Against Women in Tech, They Just Suck at Interviews,” “Gabby Giffords: The Gun Control Movement’s Human Shield,” “Birth Control Makes Women Unattractive and Crazy,” “Roger Stone: Huma Abedin ‘Most Likely a Saudi Spy’ With ‘Deep, Inarguable Connections’ to ‘Global Terrorist Entity,’ “The Solution to Online ‘Harassment’ Is Simple: Women Should Just Log Off” “Data: Young Muslims in the West are a Ticking Time Bomb, Increasingly Sympathizing with Radicals, Terror” etc etc
And of course Bannon’s classic effort: “Would You Rather Your Child Had Feminism or Cancer…?” The misogyny in those headlines – not to mention the xenophobia and the anti-Semitism – has been a constant theme with this guy. Newsweek has also reported on a raft of other incidents involving Bannon’s hostility to women:
During a 2011 radio interview, he said that progressives vilify prominent women in the conservative movement because they are not “a bunch of dykes that came from the Seven Sisters schools…..”Bannon also fired a disabled employee on maternity leave, according to a lawsuit obtained by The New York Post. “Julia Panely-Pacetti, a new mother who suffers from multiple sclerosis, was terminated by defendants from her position as head of public relations and corporate marketing because of her sex and her disability,” states the lawsuit, filed in Manhattan federal court in September 2005. Panely-Pacetti was… reporting directly to Bannon. The claim was settled in 2006.
There are also allegations of sexual harassment and threats of violence :
…During the 1990s, Bannon was accused of sexual harassment. The suit related to Bannon’s time as director of Biosphere 2, a research facility in Oracle, Arizona. The company’s former director, Margret Augustine, claimed that…. Bannon and a fellow banker, Martin Bowen, had made “sexually suggestive remarks and lewd remarks toward her, and had disparaged female employees of the research facility,” Buzzfeed News reported.
Augustine claimed Bannon once said that the problem with an employee was that she “was a woman in a man’s job” and he often openly discussed women’s “boobs,” calling them “titties.” At a company party, Augustine claims she danced with Bannon and he “held my wrist tightly and told me that once I’d done it with him, I’d never want to do it with anyone else.” In recordings obtained by BuzzFeed News, Bannon referred to a female colleague as a “bimbo” and vowed to take comments the woman made about the safety of the research facility they worked at and “ram it down her fucking throat.”
Clearly, once Steve Bannon enables Donald Trump to make America great again, women will be put back in their place.
TPP or RCEP… it isn’t easy being John Key on the trade policy options. He’d like a threesome with China – heck, a full blown 12 member TPP pool party would be great – but Donald is just so jealous. It looks like its gonna have to be China or the US, sometime soon. Here’s a song about how hard it is for New Zealand to come to a decision – TPP or RCEP? – on where its trade interests and inclinations would be better served: