Any passing review of the history of our country will show that today's great debate about giving President Obama "fast-track" authority to close a deal on the Trans-Pacific Partnership (TPP) is just the latest chapter in a long and acrimonious dispute about trade.
In the early days of the republic, protectionists wanted to protect domestic industries from foreign competition. That was a reasonable concern: Great Britain was determined to snuff out competition from our fledgling industries before they were strong enough to stand on their own. Our protectionists basically won that debate. The immediate result was higher prices for consumer products, but in the long run we became a great industrial superpower.
Today protectionists want to protect American jobs from low-cost foreign competition -- which is also a reasonable concern. Granted, this concern was more pertinent 10 years ago, when we were losing millions of manufacturing jobs, but the challenge of foreign trade remains a thorny issue. We know that the TPP would be a positive for the U.S. economy overall, but as with the North American Free Trade Agreement (NAFTA), the impact would be uneven. There would be winners and losers.
This time around, however, there is a lot more at stake than economics. Our country is engaged in what will be a prolonged competition with China for world superiority. Given China's huge population advantage over the U.S., history suggests that we are in for a tough slog. China cannot challenge us militarily, at least for now, but the real contest between our countries is for world economic leadership, which is what the TPP is really all about.
China has moved into second position among the world's industrial nations but still lags far behind the U.S. This secondary status is a bitter pill for the Chinese, who resent our hegemony. Among other things, China resents the power of the dollar as the world's reserve currency. Most of the world's business is transacted in dollars; China believes it should be in the yuan. China also resents the influence of the U.S.-dominated World Bank and has launched the Asian Infrastructure Investment Bank (AIIB) to compete with it. Our bitter opposition to the AIIB reflects our government's recognition of a serious challenge to our leadership.
So you can see the TPP is about a lot more than trade. It speaks to our determination to maintain world leadership in the face of a rising great power that exhibits clear contempt for our Western democratic values. Some analysts contend that the Chinese challenge is greater than either the Russian or the Islamic threat, which I believe may be true. Our real challenge lies in the East, and if the TPP fails to gain congressional approval, that will set us back many years.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.