As soon as he took office, US President Donald Trump, who says he wants to “make America great again,” displayed his resolve by using administrative orders and memoranda to fulfill some of his election campaign promises. Among them, his decision to pull out of the Trans-Pacific Partnership (TPP) has received the most attention from other nations, with loyal US allies Japan and Australia making a last-ditch attempt to save the agreement.
However, because withdrawing from the TPP was also a policy proposal of Trump’s electoral opponent Hillary Rodham Clinton, the TPP already had no future. Originally a TPP advocate, Clinton surprisingly changed her attitude after announcing her candidacy, a decision that was difficult to understand.
This also shows the inconsistency in the Democratic Party’s policy direction. Maybe it is because many Democrats do not know how to respond to the challenges that globalization is posing to the US.
Over the past three decades and more, US economic expansionism and the move toward globalization have been mutually complementary. This “big Americanism” depends on major corporations expanding around the globe, on the one hand moving their production bases to so-called developing nations, and on the other expanding their markets by growing their products’ market share.
In the process, US manufacturing has gradually withered while financial services have thrived, indirectly creating a bubble economy brought by finance capitalism — a system in which production processes are subordinated to the accumulation of profits in a financial system.
Since the 1987 stock market crash, there has been a cycle of inflation, bubbles and busts in US dollar-denominated assets. These cycles arose from the effects of globalization on the US and other developed nations, where the production side has seen manufacturing move offshore and the financial sector deregulated, while the distribution side has seen the impoverishment of the middle class and the pauperization of blue-collar workers. This trend has prompted a vicious circle of speculation led by increasingly rapacious financial capital.
At first glance, one could say that the US only has itself to blame for ending up the victim. Most Americans were seriously affected by the 2007 global financial crisis.
However, it is worth noting that each time a bubble bursts, the impact is smaller on the rich capitalist class than on the general public, causing the inequality of wealth distribution to worsen.
Perhaps this is why Clinton, a Democrat who was always seen as willing to support workers’ rights, said she wanted to pull out of the TPP.
However, from the point of view of Trump and the Republican Party, it looks as though the Democratic Party is unable to propose clear policies or demonstrate decisiveness in response to the problems encountered by the expansionist “greater Americanism.”
Maybe people need to understand that “greater Americanism” was already running into a bottleneck as the low-cost effects for US companies going to developing nations to expand their production were diminishing. Besides, from the consumers’ side, the growth of multinational corporations that symbolize “greater Americanism,” such as McDonald’s, reached saturation long ago in many places that have developed — like Taiwan — and have long since shown signs of fading out of the market.
High-end consumer goods, such as computers, communications and consumer electronics, are being challenged by hegemonic state capitalism led by the Chinese Communist Party, the clearest example being Huawei Technologies Co — a firm associated with the Chinese military — whose mobile phone market share in Asia has already overtaken that of Apple Inc’s iPhones.
Maybe Trump’s policies are not completely aimed at China or any particular nations and are not just for the sake of working-class people’s well-being or intended to provide more jobs. Perhaps their emphasis is on maintaining steady growth and consolidating the US’ national strength. That requires retaining capital, technology and talent.
In the early stages, the effects of the global financial crisis caused then-US president Barack Obama’s administration to recognize that it could not be overly reliant on financial capital, so it implemented a series of measures to rebuild the manufacturing sector.
Of course, the Trump administration cannot succeed by only shouting nationalist slogans like “America first,” so to retain capital, technology and talent it relies on carrot-and-stick policies like cutting taxes on “patriotic” businesses and penalizing companies that move offshore.
Trump is not just pulling out of the TPP, he also wants to renegotiate the North American Free Trade Agreement, and he also holds the EU in contempt, repeatedly expressing his dislike of regional trade blocs.
However, this does not mean that he is against free trade. On the contrary, it shows that he wants to hold trade negotiations centered on the US. This approach has to do with his “America first” ideals. Maybe Americans will gradually come to see the Trump administration’s determination to consolidate US strength through brand-new economic policies.
Trump’s rise is seen as the rise of anti-globalist economic protectionism, but it is too early to say so. The Republican Party, which puts the economy first, might want to try leading globalization by another method, namely by trying to build a multi-directional network of trade partners centered on the US by means of bilateral rather than multilateral negotiations.
The new US administration thinks that US interests can be maximized by doing so.
People must recognize that the US government’s new thinking is relatively good for Taiwan. Following Washington’s exit from the TPP, the authorities in Taiwan no longer need to keep trying to take part in regional economic integration. Taiwan has run into political difficulties whenever it tried to join regional free-trade agreements and it will continue to do so.
What the US is doing is in effect encouraging everyone to engage in bilateral trade negotiations and to draw up trade agreements under the WTO framework. Therefore, even if Taiwan wants to go on playing the globalization game, as a WTO member it can still go with the new atmosphere by engaging in bilateral negotiations with a wider range of nations.
However, in the process, Taiwan might do well to learn from the US’ policies and the nation’s best option might be to protect its fundamental interests, stop pushing outward-looking policies and retain capital, technology and talent while adjusting business structures.
After all, if a small island is unable or unwilling to engage in brisk production, but only cares about financial manipulation and real-estate speculation, how is it going to engage in trade with other nations?
Leung Man-to is a professor of political science at National Cheng Kung University.
Translated by Julian Clegg
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