Shadow Government

Accepting the Drezner challenge

A relentlessly-optimistic Dan Drezner has thrown down the gauntlet! (Well, more like a dinner napkin, really, but same idea). He defends the prospects for trade progress in President Obama's second term and descends from generalized good cheer into specifics. With a meal on the line, he writes:

"I'm willing to bet that at least two out of the following four things will happen during Obama's second term: 

1)  A Trans-Pacific Partnership that is ratified by Congress;

2)  Bilateral investment treaties with India and China;

3) A transatlantic integration agreement;

4)  A new services deal within the auspices of the WTO."

I accept.

Now, for those of you wagering at home -- not that Foreign Policy condones such behavior -- the question is not just which of us has the clearer crystal ball; you also want to think about the point spread. Over at Cato, Simon Lester offers some initial guidance to eager bookies:

"I would rate the chances of seeing completed China/India investment treaties or a U.S.-EU FTA at close to zero; a ratified TPP at around 10 percent; and a WTO services agreement at around 25 percent."

While I like the implication -- a 97.5 percent chance that I feast at Drezner's expense -- I would differ a bit on the odds.

The challenge of handicapping these events is that they are not precisely defined. A "transatlantic integration agreement" could run anywhere from an accord that promises modest services integration and regulatory cooperation to a full-fledged free trade agreement between the United States and the European Union. A bilateral investment treaty could range from a new consultation mechanism to adoption of the complete U.S. model BIT.

Thus, a central question: How readily can the Obama administration push through a minimalist version of any of these trade measures? There is a clear incentive to do so. Agreements ought to be easier if you can drop the hard parts. Signed and passed agreements constitute a legacy. Only quibbling trade geeks will ever weight the virtue of those agreements by the extent of their coverage. This is one reason for the long history of bilateral or plurilateral trade agreements around the globe that delivered very modest amounts of liberalization: they all delivered a signing ceremony for leaders.

Yet there are some significant obstacles to "going lite." Here are four:

1. Commercial significance. It would be dramatically easier to negotiate the TPP if issues such as intellectual property or state-owned enterprises were omitted. Those issues are divisive both within the United States and between participating countries. Yet they are on the agenda because key industries care about them and see opportunity in regulating the behavior of trading partners. While the Obama trade legacy will not be significance-weighted, there needs to be a minimum level of business enthusiasm to get an agreement through.

2. Balance. Any agreement has to offer something for each party. The narrower the agreement, the less likely all the participants come away with something they like. This is a problem with a services-only deal within the WTO: Usually developed countries are demandeurs for services market access while developing countries are demandees. Of course, the developed countries could go off on their own and sign a plurilateral services agreement among themselves (still under WTO auspices), but that poses some problems. It does not win domestic services firms the market access they crave, it ticks off the developing countries who have been circumvented, and it may limit negotiating space for any future, broader WTO agreement that might draw the developing countries in.

3. Leverage. In the early days of post-war trade talks, agreements came along every couple years. If your industry's concerns were not taken up in one round, you could be reasonably confident you could push for them in the next. In the last forty years, though, there have been only two completed global trade agreements (the Tokyo and Uruguay Rounds). FTAs have been concluded more frequently, but generally only one per country pair. Now suppose you're a U.S. agricultural producer with longstanding concerns about European agricultural practices. How do you react to the prospects of a limited U.S.-EU trade deal that leaves out agriculture? You hate it. You probably think that this is your moment of maximum leverage to reform EU policies; a limited agreement gives that leverage away. The argument would be similar for a modest BIT with India or China; anyone with investment concerns might see a limited agreement as worse than no agreement at all, since the chances of revisiting the topic would be small.

4. Precedents/Congress. The United States has been relatively formulaic in its approach to trade agreements, moving from the NAFTA model, to "NAFTA+" to "Chile+" - the same basic structure, with a few improvements. No major deviations from the same 'high standards' model of a trade agreement. That was one of the attractions of the TPP -- it was a group of countries who had committed to a fuller, deeper version of trade liberalization, matching the U.S. standard of depth and breadth. A standardized approach solves two particular challenges for U.S. trade policy. First, the country undertakes multiples negotiations, spread over time. Second, any administration must reach an understanding with Congress, which has constitutional authority over trade. A fixed template makes it harder for successive trading partners to try to exempt sensitive sectors. It also means that carefully negotiated understandings with Congress need not be reworked with every agreement. While an FTA- or BIT-lite may ease external negotiations, it can complicate discussions with Congress and with future trading partners.

So a 'lite' approach may be hard to swallow.

There is certainly more to chew on as we think over trade prospects for the next term. I have yet to cook up a full alternative set of odds. But am I confident in my skepticism? You bet.

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Shadow Government

Can the Obama administration avoid a rising tide of war?

Are the tides of war rising or receding? That is the foreign policy question that occupied my attention this past holiday weekend, and in good academic fashion I can make a case for either answer.

On the one hand, President Obama has been claiming for years that the wars are receding, and this holiday snippet seems to bear him out: Ft. Bragg, the North Carolina home to some of the most deployed units in the U.S. Army, had the most troops home for Thanksgiving in years. The completed withdrawal from Iraq and the accelerated withdrawal from Afghanistan means that, in sheer deployment numbers, the fewest number of Americans troops are in combat since the start of the Iraq war nearly a decade ago. Moreover, there were no surprise holiday visits by the president to troops in the combat zone, and the whole "wartime holiday" theme seemed more subdued -- or perhaps just so routine as to be unremarkable. Still too many servicemen and women are dying, but suicide seems the growing threat, not IED's and enemy action.

On the other hand, I spent as much time talking about war with friends and family as ever, the only difference was U.S. troops were not centermost (not yet, anyway). The raging civil wars in Congo and Syria and the intensified conflict between Israel and Hamas provided plenty of fodder for table debate. There were grim reminders from Afghanistan that the remaining Americans are very much in a combat zone.

And, most fundamentally, the political conflicts that fueled America's decade of war are as far from resolution as ever. Two deep causes have produced a decade of deployments: first, the civil-war within Islam over how to reconcile the ambitions of political Islam with the constraints and opportunities imposed by globalization and modernity/post-modernity; and second, the imbalance of geopolitical power summed up in the idea of the United States as an indispensable power (if the United States does not act to preserve order, others will not step up into the vacuum). Both dynamics were very much in evidence over the holiday weekend, and neither shows much sign of changing in the coming year.

As a consequence, even a casual survey of the foreign policy horizon finds ample areas where U.S. interests are at greater risk today than they were, say, last Thanksgiving: Who will argue that Iraq is on a better trajectory today than last year -- or Afghanistan -- or Syria -- or Libya -- or Israel/Palestine -- or Iran -- or Congo -- or the Far East?

All of this adds up to a conviction I have had for some time now: Obama's second term will be profoundly shaped by a rising tide of war. That does not mean more U.S. troops will spend next Thanksgiving in combat than this year. We can run away from a rising tide, at least for a while, and the president seems little able (and perhaps less inclined) to overcome the general sense of war-weariness that characterized his first term. But this will be war-avoidance by choice rather than by condition, by which I mean we will be choosing to live with conditions -- be it a regional sectarian war in the Middle East, or a red-line crossing Iranian nuclear program, or conflict-driven humanitarian catastrophes -- that only a few years ago we deemed worse than a U.S. military intervention.

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