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date: 12 December 2019

The Americas in the Trans-Pacific Partnership

Summary and Keywords

Following the end of the Cold War, the hegemony of the United States in Latin America was intimately related to the globalization of the hemispheric political economy. Free-trade agreements (FTAs) were crucial to this process, helping to extend and entrench the neoliberal model. As a result of the region’s political turn to the left during the 2000s, however, the Washington Consensus became increasingly untenable. As U.S. trade policy subsequently moved in the direction of a “post-Washington Consensus,” the “Pink Tide” fostered the creation of Latin American-led approaches to integration independent of the United States. In this context, the Trans-Pacific Partnership (TPP) was designed to catalyse a new wave of (neo)liberalization among its 12 participating countries, including the United States, Canada, Chile, Peru, and Mexico.

The TPP codified an updated and comprehensive set of rules on an array of trade and investment disciplines not covered in existing agreements. Strategically linking the Asia-Pacific to the Americas, but excluding China, the TPP responded to China’s growing economic presence in Asia and Latin America. Largely a creation of U.S. foreign economic policy, the United States withdrew from the TPP prior to its ratification and following the election of Donald Trump as U.S. president. The remaining 11 countries signed a more limited version of the agreement, known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is open to future participation by the United States and other countries in Asia and Latin America. The uncertainties in the TPP process represented the further erosion of Washington’s “free trade” consensus, reflecting, among other things, a crisis of U.S. hegemony in the Americas.

Keywords: Trans-Pacific Partnership, trade, post–Washington Consensus, hegemony, China, Obama administration, Trump administration, neoliberalism, Gramsci, Latin American politics

On its signing in February 2016, the Trans-Pacific Partnership (TPP) was slated to become the world’s largest trade pact. It featured 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam) that together comprised approximately 40% of global gross domestic product (GDP). The TPP linked the Americas to the Asia-Pacific in a multilateral effort to catalyze a new wave of liberalization, providing an updated and comprehensive set of rules on an array of trade and investment disciplines. Although it was very much the creation of U.S. foreign economic policy, the United States withdrew from the TPP in January 2017, prior to its ratification and following the election of Donald Trump as U.S. president. Washington’s withdrawal significantly altered the TPP process, providing clear indication that U.S. trade policy had entered a new era under Trump.

The remaining 11 countries reached a final agreement on a revamped version of the TPP, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, also known as the TPP11), which was signed in March 2018. The successor agreement was more limited in scope, excluding some of the more controversial elements favored by the United States in the original text, such as provisions on intellectual property and the investor-state dispute settlement mechanism. The twists and turns in the TPP process reflected, among other things, the shifting features of U.S. power in the Americas. The uncertainties surrounding the agreement problematized U.S. hegemony in the Western Hemisphere, which, in the decades following the Cold War, was based increasingly on the neoliberalization of the regional political economy.

Prior to the TPP negotiations, the United States had completed bilateral free trade agreements (FTAs) with the accord’s three Latin American members: Chile, Mexico, and Peru. However, the TPP had considerable implications for the political economy of the Americas, generating interest from counties not party to the original 12-member talks. The agreement held the potential to open up new paths of capital accumulation in areas not covered under previous regimes, with particular focus on key issues in Washington’s broader geo-economic agenda (services, intellectual property, state-owned enterprises, and e-commerce, among others). In addressing these new disciplines the “mega” trade deal was viewed as a way of harmonizing existing rules and regulations, leading toward “convergence” among its members, while responding to the rise of Chinese influence in the global economy.

Although it was undoubtedly designed with the Asia-Pacific geopolitical “space” in mind, its extension to Latin America was significant. Reflecting the political realities of a more autonomous region, the TPP could revitalize U.S. hegemony in inter-American relations. Against the grain of the shift to “post-neoliberalism” that had characterized the region’s “Pink Tide” (the political re-emergence and electoral success of Latin America’s center-left in the early 2000s), the TPP represented a means of furthering the neoliberal economic model. A major priority of the Obama administration, it carried forward the Washington Consensus policies favored by previous administrations (and their regional partners). Under the Trump administration, however, U.S. hegemony moved away from the consensual properties of institutional power and toward more a coercive strategy, even as U.S. foreign economic policy remained centered on “opening up” markets for U.S.-based transnational capital.

Free Trade and U.S. Hegemony

Trade agreements overlap various forms of mutually reinforcing power in international relations—institutional, structural, and ideological (Barnett & Duvall, 2005). As formal institutions, they mediate between actors to guide, steer, and/or constrain economic activities of production and exchange, with ramifications for the structural-material power of states qua agents. As sets of rules, they order international economic relations in a way that benefits those with more influence over the formation of the agreements’ detailed provisions—national negotiators and their backers in the corporate/commercial sphere. FTAs redirect and “lock in” existing patterns of economic behavior, creating “winners and losers” in the political economy both within and across national borders. Beyond simply facilitating the exchange of goods, U.S.-backed FTAs have fostered processes of deeper (neo)liberalization, creating binding rules on diverse sectors of public policy—affecting everything from financial services and foreign investment to labor and environmental standards. Ideologically, FTAs have both drawn from and reinforced the hegemonic “common sense” on economic governance and integration, helping consolidate the neoliberal continuities in the shift toward the “post–Washington Consensus.”

Despite being a protectionist power for much of its history, the “free trade” advocated by the United States after World War II made it both benefactor and beneficiary of an increasingly globalized capitalism (Panitch & Gindin, 2012). As part of the construction of a liberal international order, Washington pursued open trade through multiple tracks corresponding to different levels of the international political economy: global/multilateral, regional, and bilateral. The United States has also made use of a unilateral track in which it restricts access to its vast market “in order to get (its) partner to open its markets to US exports or to cease other offensive commercial practices and policies” (Cooper, 2014, p. 3). This more coercive side of U.S. trade policy came to the fore under Trump, a key plank of his “America first” nationalism.

In advancing market liberalization in a broad but selective manner, U.S. trade agreements reinforce the country’s structural power in the international political economy. Structural power involves the “direct and mutual constitution of the capacities of actors” in international relations (Barnett & Duvall, 2005, p. 52). Because economic structures imbue hegemonic actors with material interests and asymmetric capabilities, structural power is necessary for hegemony. States operate within the constraints of existing structures, and the foreign economic policies of hegemonic states are often aimed at preserving or extending pre-existing structural advantages. The material base of U.S. hegemony in the Americas was reconstituted through the post–Cold War neoliberalization of the region’s international political economy. U.S. hegemony is not reducible to the uneven economic development of the Western Hemisphere, however, nor is it a recent occurrence. As highlighted in revisionist historiography, it has antecedents that date to rise of the United States as a world power, with Latin America often serving as a “laboratory” of imperial interventionism for U.S. policy writ large (Grandin, 2006; Loveman, 2010, p. 377).

Hegemony as a Social Relationship

Hegemony is central to international relations (IR) and its subfield of international political economy (IPE). Although IR/IPE features a multitude of definitions of this contested concept, which generally correlate to the competing ontological and epistemological divisions that shape the discipline(s), hegemony is most parsimoniously understood as a dialectical social process involving asymmetrical power relations. In this view, influenced by the neo-Gramscian tradition, hegemony cannot be reduced to realist conceptions of domination nor liberal notions of leadership. Rather, it blends coercive expressions of control with consent-based forms of power which operate via dynamic interplay with counter-hegemonic forces. The hegemonic actor (or hegemonic bloc) must accommodate “pushback” from “below” in order to stabilize and extend the asymmetrical advantages inherent in the hegemony/counter-hegemony dialectic.

The neo-Gramscian approach in IPE owes much to the pioneering work of Robert W. Cox, who brought Antonio Gramsci’s historical materialism into the discipline as an explicitly critical counterpoint to mainstream theorizing. In Cox’s Marxian ontology, hegemonic orders were intimately intertwined with forces of production—complex international relationships connecting classes across countries and necessarily interlinking social, economic, and political structures (1993, p. 62). Hegemony is also dependent on shared values and understandings, however—ideational factors that traverse national boundaries and link states to non-state entities and that often go unquestioned by elite actors. Such ideas consolidate claims of legitimacy, helping more powerful actors foster cooperation in a way that benefits the hegemon and/or hegemonic bloc and deflects resistance to the existing order. “Hegemony is like a pillow,” wrote Cox, “it absorbs blows and sooner or later the would-be assailant will find it comfortable to rest upon” (1993, p. 63). This softening happens through consensus created within formal organizations and institutions like, for instance, multilateral trade regimes.

As ideological consensus was a key aspect of Gramsci’s praxis, in international relations hegemonic consensus is often created and expressed through institutional power, which must be rebuilt over time to account for the opposition of counter-hegemonic forces. Gramsci used the term “common sense” to capture the ideological terrain of hegemony (Gramsci, 1971, pp. 325–326, 333–334; see also Crehan, 2016). Elites attempting to align popular beliefs with their own material interests often find opposition from “below,” meaning that, paradoxically, “common sense” isn’t always as fixed or stable as it may seem. In the context of the postwar economic order, assembled by the United States in the interests of both U.S. and transnational capitalism (Panitch & Gindin, 2012; Stokes & Raphael, 2010, pp. 35–38), the prevailing ideology generally reflected the interests of U.S.-based multinational corporations and financial firms. This was sedimented in the organizations/institutions governing the international political economy, including trade agreements, which both draw from and reinforce the “common sense” features of an ideology that spans multiple “levels” of the international economy. When this “normal” conception breaks down, the hegemonic order can enter a period of crisis, produced not exclusively by the antimonies of capitalist production but by the interaction of structural factors with the contingencies of elite agency and that of disaffected, subaltern, or marginalized groups.

Following Cox’s intervention, the neo-Gramscian approach became instrumental in relating U.S. foreign policy to the globalizing world economy (Gill, 2008; Robinson, 1996). Against more “statist” accounts of the role of U.S. power in holding together the global capitalist order, it foregrounded the importance of class in the social and political dynamics of (U.S.-led) capitalist globalization. The neo-Gramsican approach has also been used to illuminate the political economy of U.S.-Latin American relations in the early 21st century, and to position the international politics of this relationship in the larger global capitalist context (Biegon, 2017; Chodor, 2015; Robinson, 2008). While there are important differences within (neo-)Gramscian historical materialism as applied to IR/IPE, they share similarities in their approach to hegemony as complex and multifaceted. As compared to conventional theories, hegemony becomes more open—a social relationship grounded in class dynamics and textured not only by states but by other actors on the world stage.

A Post–Washington Consensus Agreement

Trade liberalization was a core tenet of the Washington Consensus, the dominant paradigm in economic policy from the 1980s through the early 2000s. Coined by the economist John Williamson, the Consensus got its moniker because it originated in the heart of U.S. officialdom, in the boardrooms of the U.S. Treasury Department, International Monetary Fund (IMF), and World Bank, as well as the city’s think tanks (Stiglitz, 2008). Although it was originally defined with respect to Latin America, it was soon applied elsewhere amidst the post–Cold War enthusiasm for “free market” globalization. Under the precepts of the Washington Consensus, trade agreements became tools to deepen ongoing processes of neoliberalization. Thus, “free trade” was bound up with policies of privatization, deregulation, tax reform, and the liberalization of interest rates and foreign investment.

In the 1990s, at the high point of the Washington Consensus, the United States utilized multilateral negotiations to establish an expansive rules-based system, transforming the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO). The North American Free Trade Agreement (NAFTA), implemented by the United States, Canada, and Mexico in 1994, provided a model for additional agreements at the national and (sub)regional levels. Meanwhile, the WTO’s Doha Development Round (DDR) of negotiations, launched in 2001, stagnated over the following decade, in part because an assertive bloc of southern countries pressed their northern counterparts over policy space for social development (Gallagher, 2008), creating a lasting impasse. Washington was compelled to pursue other paths to market liberalization. Regional agreements were seen as the next best option. In Latin America, the centerpiece of this effort was the Free Trade Area of the Americas (FTAA), a bipartisan project of multiple U.S. administrations aimed at extending NAFTA to the entire Western Hemisphere. In conjunction with the emergence of progressive governments in the 2000s, however, the FTAA, like the WTO’s DDR, was soon met with resistance “from below” (Biegon, 2017, pp. 70–74; Chodor, 2015, pp. 150–165).

Neoliberalism was always contested in Latin America, particularly by “popular classes” of workers and peasants, who often suffered the brunt of neoliberal restructuring. Nevertheless, in elite circles the Washington Consensus was widely accepted across the region from the 1980s onwards (Panizza, 2009), becoming a “veritable Gramscian consensus around the neo-liberal project” (Robinson, 2003, p. 322). However, the popularity of the Consensus was damaged during the series of crises that beset Latin American economies in the 1990s, from the Mexican peso crisis through the Brazilian and Argentinean crises. Policies associated with the paradigm appeared unable to deliver on growth and macroeconomic stability, let alone social development. The volatilities of neoliberalism, coupled with its ideological tensions, provided the conditions for the rise the region’s “new left,” which further undercut the consensual aspects of the prevailing economic model. This Pink Tide contained a diverse collection of leftist and center-left groups and actors united in their opposition to the strictures of Washington’s policy framework.

The governments elected in the Pink Tide set out progressive agendas on social and economic policy, with a focus on alleviating poverty, reducing inequality, developing national economies, and charting independence in foreign affairs. Through the opposition of the Lula administration in Brazil and the Kirchner and Fernández de Kirchner governments in Argentina, alongside more strident denunciations from the “Bolivarian” governments of Venezuela, Bolivia, and Ecuador, the FTAA was all but dead by the mid-2000s. The broad turn toward post-neoliberalism correlated with the creation of a spate of new regional bodies that excluded the United States, such as UNASUR (Unión de Naciones Suramericanos, the Union of South American Nations) and CELAC (Comunidad de Estados Latinoamericanos y Caribeños, the Community of Latin American and Caribbean States), further undermining Washington’s institutional power in hemispheric politics. Adherents of “21st century socialism” looked to ALBA (Alianza Bolivariana para los Pueblos de Nuestra América, the Bolivarian Alliance of the Peoples of Our America), a loose collection of Venezuelan-backed initiatives, as a radical alternative to neoliberal integration and capitalist globalization (Cusack, 2019). Analysts began speaking of a post-hegemonic hemisphere (Briceño-Ruiz & Morales, 2017; Crandall, 2011; Riggirozzi, 2012), in which the United States’ traditional dominance was tempered by the new configuration of center-left governments spread around the region. For some commentators, the TPP would provide the opportunity for the United States to lead “an FTAA of the willing” (Hidalgo, 2012), revitalizing the goal of a free trade pact spanning the Americas from North to South.

A similar de-legitimation dynamic was witnessed in the United States as a result of the housing and credit crash of the late 2000s, which produced the worst recession since the Great Depression. The Great Recession, as it became known, severely damaged “common sense” support for “free markets” and “free trade.” In this context, U.S. economic policy turned inward, toward bank bailouts and fiscal stimulus. Congressional backing for FTAs grew more tenuous. The intra-elite contest over trade policy took place via presidential trade promotion authority (TPA, more commonly called “fast track” authority), in which legislators allow the executive to enter into trade agreements without the need for amendments or further Congressional action, thus expediting the finalisation and implementation of complex multilateral agreements. Once Obama won fast track authority in 2015 he was able to confidently move forward with TPP talks. However, the TPP was the subject of an extensive campaign by unions and civil society groups in the United States and elsewhere to steer the negotiation process toward a more progressive set of rules on labor rights, climate change and conservation, human rights, and health and consumer safety issues, pursued through the TPP’s formal consultation process with civil society stakeholders. When this effort failed, these groups focused on blocking the ratification of the TPP in the U.S. Congress and other national legislatures (Chodor, 2019; Solón, 2016). The TPP became a major issue in the 2016 U.S. presidential election, and scrutiny of the accord further eroded public support for “free trade,” damaging its prospects politically (Congressional Research Service, 2016).

By the time of the collapse of the (original) TPP, the Washington Consensus had long lost its hold on policymaking in Latin America. The “post–Washington Consensus” reflected the political opposition to the deep neoliberalization of the original paradigm. More Keynesian in scope, it advocated a greater balance between state and market forces (Stiglitz, 2008). At the same time, the post–Washington Consensus was committed to trade liberalization, albeit of a narrower kind. For some critics, the “new” paradigm offered little substantive change (Panizza, 2009, pp. 145–147; Robinson, 2008, p. 40). Neoliberal continuities were embedded in the details of U.S. trade policy. Under President Obama, who had initially campaigned against “free trade” in 2008, Washington maintained a relatively traditional approach to trade governance (van Apeldoorn & de Graaff, 2017). The Obama administration finalized FTAs with Colombia, Panama, and South Korea, negotiated by the previous Bush administration. The TPP was more ambitious in scope than the bilateral agreements and became the centerpiece of the United States’ post-crisis bid to “jump-start” trade liberalization globally. As an added bonus, the TPP represented a means of “convergence” (Estevadeordal, 2012, p. 27), allowing the United States to shift its focus away from more limited bilateral agreements and toward a more comprehensive regime, one with the potential to add new members and incorporate new trade disciplines over time.

China and the Americas in the U.S. Pivot to Asia

The TPP was designed in the context of a “contest of templates” in the Asia-Pacific, with the United States and China competing to construct regimes that improved the terms of trade for their strongest sectors (Gordon, 2012). China launched its Regional Comprehensive Economic Partnership (RCEP) in 2012, setting out a goods-based template to compete with the TPP, which was more services-oriented. U.S. officials were forthright about the TPP’s connection to the “pivot” to Asia (later called the “rebalance”), the Obama administration’s realignment of strategic priorities and resources (Clinton, 2011; Donilon, 2014). This gave the TPP a distinct geopolitical and geo-economic purpose (Dian, 2017; Griffith, Steinberg, & Zysman, 2017). While the United States argued that the pivot was not about China per se, most observers saw it as a means of “containing” the rising power. Even if China provided much of the political impetus, the TPP—and the broader pivot—had implications that extended beyond Sino-U.S. relations. Outside of East Asia, China’s focus on building economic linkages to Latin America increased the TPP’s geo-economic “weight.”

Indeed, China’s interest and activity in Latin America had grown considerably in the early part of the 21st century (Ellis, 2014: Jenkins, 2010; Yu, 2015). Chinese exports to Central and South America boomed across a number of sectors, as did Chinese investment. Latin American exports to China, concentrated mainly in commodities (including copper, oil, soybeans, and iron ore), increased sharply. By 2015, Chinese lending to Latin America and the Caribbean surpassed $29 billion annually, a figure greater than World Bank and Inter-American Development Bank lending combined (Ray, Gallagher, & Sramiento, 2016). Chinese President Xi Jinping pledged $250 billion in investment over a 10-year period at the 2015 China-CELAC summit in Beijing (Reuters, 2015). Chinese loans to Latin American countries generally held fewer policy conditionalities, making them more attractive to regional partners than those from the IMF and World Bank.

China’s state-directed development model, known as the “Beijing Consensus,” gained traction in the region, where it dovetailed with efforts by left governments to achieve policy independence from U.S.-based international financial institutions (IFIs). Interest in the Chinese model heightened perceptions that the Washington Consensus had effectively collapsed, a trend further reinforced through the global crisis of 2008–2009. At the same time, when it came to the manufacturing sector, China was widely seen as a competitor, with Chinese imports adversely impacting domestic producers of manufactured goods. For some, burgeoning commercial linkages with China created new asymmetries that left Latin America potentially dependent on the emerging economic superpower (Jenkins, 2012). In the mid-2010s, when global commodity prices declined in conjunction with a slowdown in China’s booming economy, growth in much of Latin America also declined, with several large economies (including Brazil and Venezuela) entering into recession. Although China’s structural power had risen exponentially, it did not eclipse that of the United States. At the completion of the TPP negotiations, the United States remained the dominant market for exports from Latin America (followed by the European Union and then China) as well as its largest single source of imports (ECLAC, 2015).

China’s interest in Latin America was mostly commercial, but it did have other dimensions. Ideologically, China’s support for South-South cooperation provided diplomatic space for the governments of the Pink Tide. Forums like the BRICs (the Brazil, Russia, India, and China grouping) and its affiliated development bank and the China-CELAC summit demonstrated the institutional face of this effort. The People’s Republic of China engaged in a prolonged contest with the Republic of China (Taiwan) over diplomatic recognition; for decades, a majority of the countries that recognized Taiwan were in Central America and the Caribbean, and Beijing often sought to use foreign aid to pry them away. On the security front, China increasingly engaged with Latin American countries through arms sales, military exchanges, and joint exercises. Potential competition over energy resources (“energy security”) overlapped these concerns, with Beijing’s interest in oil-rich Venezuela drawing considerable attention from Washington.

The triangular dynamic between China, Latin America, and the United States led to speculation that China could serve to counterbalance U.S. hegemony (Jenkins, 2010). In this context, the extension of the TPP to Latin America was more than an afterthought for U.S. policymakers, but partly a response to China’s growing role in the Western Hemisphere. Moreover, because of the TPP’s institutional design, it did not preclude the eventual incorporation of China into the pact (Solís, 2013). China’s inclusion would need to garner the support of existing TPP members and would depend on Beijing’s willingness to participate in a comprehensive regime originally fashioned by U.S. negotiators. The Obama administration’s ambivalence on whether China could, or would, eventually be brought into the pact illustrated that the logic underpinning the TPP extended beyond its instrumentality as a targeted response to China’s economic rise. In the wake of the U.S. withdrawal, there was speculation that China could effectively “replace” the United States as the TPP’s dominant market, an unlikely development given China’s commitment to the RCEP.

In the context of China’s foray into the Western Hemisphere, the TPP provided a mechanism for the United States to consolidate the more “Pacific-oriented” bloc of Latin American governments under new commercial and juridical disciplines not covered in previous FTAs but codified with Washington’s input. The governments of Chile, Colombia, Peru, and Mexico had signaled their interest in such a project through their formation of the Pacific Alliance in 2012. This supported the notion that the elite consensus on neoliberal trade integration would be rebuilt in piecemeal fashion, by first building momentum through institutional confidence (Dade & Meacham, 2013, p. 6). Through its integration of existing rules, the TPP was expected to strengthen structural links to East Asian markets, providing incentive for countries that may be hesitant to consider an eventual FTA with the United States, including the more “Atlantic-oriented” countries of Mercosur (the Southern Common Market, comprising Argentina, Brazil, Paraguay, and Uruguay).

The TPP After the U.S. Withdrawal

If the TPP was designed to build momentum toward further globalization, the 2016 U.S. presidential election abruptly halted this discussion. Several candidates voiced opposition to the agreement, including Donald Trump, who put his anti-TPP stance at the center of his “populist” appeal. Trump’s unexpected rise resulted in a major shift in U.S. trade policy. He outlined a nationalist approach to foreign affairs based on unilateralism and transactional deal-making. Washington’s commitment to multilateral institutions, a core feature of its postwar international hegemony, was sidelined. In its place, the Trump administration aggressively pursued of a narrower understanding of U.S. national interests. As stated in Trump’s 2017 Trade Policy Agenda:

Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the United States, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports. As a general matter, we believe that these goals can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations—and by renegotiating and revising trade agreements when our goals are not being met.

(USTR, 2017, p. 1)

In the lead-up to the U.S. withdrawal the TPP had become a political flashpoint, and Trump was not alone in voicing opposition. From the left, the 2016 presidential campaign of Bernie Sanders echoed the critical themes of the anti-TPP movement, compelling Hillary Clinton to distance herself from the agreement. By all accounts, however, Trump was a “true believer” in protectionism, and his position on trade had been relatively consistent over time, predating his White House run. His (neo-)mercantilist approach was evident in various aspects of foreign economic policy, most notably the series of tariffs he instituted in early 2018, which targeted steel and aluminium imports (of 25% and 10%, respectively) from the European Union, Canada, and Mexico. He also introduced tariffs on solar panels and washing machines, as well as a variety of goods from China. Trade partners responded in kind, leading analysts to declare the outbreak of a “trade war” (Bown & Kolb, 2018). Trump leaned into the term, claiming that trade wars were “good, and easy to win” (Reuters, 2018). After threatening to withdraw from NAFTA, his administration reopened the accord largely in an effort to protect U.S. automotive producers.

The United States’ exit from the TPP seemed likely to kill the pact. However, in March 2018, the 11 remaining TPP countries gathered in Santiago, Chile, to sign the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The revised agreement encompassed 22 modified provisions from the original text, with 19 items removed “temporarily,” one item changed, and two items added to clarify provisions in the agreement (Asian Trade Centre, 2018, p. 1). The changes included major modifications to the investment and intellectual property chapters, limiting some copyright and patent protections as well as the ability of investors to litigate disputes through the investor-state dispute settlement mechanism. The CPTPP left in place previously agreed provisions on state-owned enterprises (SOEs). Its e-commerce and government procurement chapters, essential to the United States during the TPP talks, were also left largely intact. Chapters on financial services and telecommunications received very minor adjustments (Asian Trade Centre, 2018, pp. 2–3).

The narrower scope of the revised rules in some areas cut against the interests of U.S.-based transnational capital, even as “trade and investment rules in areas such as e-commerce and SOEs established in the CPTPP help(ed) advance US objectives even without (US) participation” (Goodman, 2018). According to the Peterson Institute, a Washington think tank, while the original TPP would have netted the United States a $131 billion income gain, under the revamped “TPP11” the U.S. economy stood to lose approximately $2 billion (Petri, Plummer, Urata, & Zhai, 2017, p. 8). The text of the new agreement suspends (rather than revokes) the more controversial elements that were “removed” from the TPP, meaning it would be relatively straightforward from a technical standpoint for the United States to rejoin the grouping (though it would still require ratification). In other words, the existence of the CPTPP would not preclude a reconstitution of the TPP. Because of the idiosyncrasies and uncertainties associated with the Trump presidency, this cannot be ruled out; in early 2018, Trump said he was reconsidering his stance on the TPP (Goodman, 2018), and a future U.S. administration may seek re-admittance.

Such a scenario would likely depend on a different political environment in the United States. Opposition to the TPP was not limited to Trump supporters, many of whom were drawn to Trump’s unorthodoxy as a rejection of the political establishment. Trump capitalized on the frustrations of a segment of the U.S. working class in the post-industrial “rust belt,” but this “rebellion” had roots that predated Trump’s candidacy (Faux, 2016). In the wake of the financial crisis, and in the context of the inequalities wrought by capitalist globalization, the “common-sense” support for “globalist” free trade was increasingly pressed not only from the right (as illustrated by the Tea Party movement that paved the way for Trump) but also from the left, as seen in the Occupy movement of the early 2010s (Crehan, 2016). The progressive campaign against the TPP, which gathered momentum once the neoliberal character of the agreement became clear, was part of this broad-based and ideologically eclectic “backlash” against globalization on the part of subordinate groups/classes, further undercutting consent to neoliberalism “from below” (Chodor, 2019). Across the Americas, this effort echoed the “alter-globalization” movement that had shaped previous battles over “free trade” (Solón, 2016). Just as the Washington Consensus had unraveled in Latin America, the traditional bipartisan consensus in Washington in favor of FTAs eroded over time—not because of a lack of support among officials, lawmakers, or their donors, but because of changing attitudes among the U.S. mass public (Congressional Research Service, 2016, pp. 2–3; Pew Research Center, 2010; Stokes, 2014).

As with the original TPP, the CPTPP can incorporate new members over time. In 2018, Colombia, the only member of the Pacific Alliance not already in the TPP, formally requested permission to join. Meanwhile, Japanese officials called for more Central and South American countries to consider membership. If the original TPP was designed to jump-start a stalled liberalization agenda, advocates maintained that an expanded CPTPP would damp down protectionist sentiment (Solís & Mason, 2018). The new accord came at an opportune time for the center-right Latin American governments that took power as the Pink Tide receded. “There is optimism,” according to the IMF (2017, pp. 3–4), “particularly with the new administrations in Brazil and Argentina and the continued dynamism of the Pacific Alliance, that the time is ripe for the continent as a whole to exploit the potential gains from deeper regional integration and insertion into GVCs” (global value chains). Latin America had come through the “anti-globalization backlash” to arrive at a new “pragmatic” consensus on trade; not only was there broad agreement that trade acts as an important driver of economic growth, but that deeper regional integration could address the significant trade costs in the region as a whole (IMF, 2017).

For the IMF, then, this new consensus did not cling tightly to the “policy recommendations of the Washington Consensus era” (IMF, 2017, p. 24). However, the drive for the TPP/CPTPP did represent the extension of an earlier neoliberal policy agenda, albeit through a more comprehensive agreement updated to include industries and practices not covered by NAFTA or WTO rules (on things like internet commerce, government procurement, and SOEs). Like those institutions, it enmeshed “free trade” with investment liberalization. As with previous FTAs, and contrary to the claims of the Obama administration, labor and environmental concerns were marginal to the negotiations, and there was little prospect that concomitant provisions would be consistently or robustly enforced. By removing various non-tariff barriers to trade, further enhancing the rights of investors to challenge domestic regulations, and introducing new protections for intellectual property, the regime articulated a U.S. vision of economic governance consistent with ascendant factions of U.S.-based transnational capital, from financial services and pharmaceutical firms to the tech sector. According to Bastiaan van Apeldoorn and Naná de Graaff, “the TPP underlines how an agenda of deepening neoliberal globalization was at the heart of Obama’s economic strategy and response to the most serious crisis of global neoliberal capitalism thus far” (2017, p. 368). The signing of the CPTPP carried forward the promise of a revitalized neoliberalization process connecting the Asia-Pacific to North and South America, one with potential to kick-start trade liberalization on an even wider scale.

The persistence of the TPP after the U.S. withdrawal serves as a compelling reminder that U.S. hegemony, as viewed from a Gramscian historical materialist ontology, is bound up in a neoliberalization project that is ultimately class-based. The political economy favored by the United States in the (post–)Washington Consensus era was supported by elites elsewhere, including in Latin America, notwithstanding the erosion of consent for neoliberalism embodied in the (more radical elements of the) Pink Tide. Although the trans-Pacific accord signed in 2016 was the creation of U.S. foreign economic policy and served U.S. “national” interests, the elite “common sense” surrounding the policies codified in the TPP was never the exclusive product of the United States’ ideological domain. In the context of the counter-hegemonic movements of the 2000s, the TPP was a means of sustaining a wider commitment to neoliberalism following the breakdown of the FTAA. In the context of the uncertainty created by Trump, the CPTPP represented a means of sustaining this same commitment, supported by transnational elite networks and ascendant rightist and center-right political forces. Alongside projects like the Pacific Alliance, the CPTPP suggested the “post-hegemonic” regionalism of UNASUR, ALBA, and CELAC had given way to the re-emergence of the “open regionalism” of the Washington Consensus variety, potentially deepening the emerging Pacific–Atlantic divide in regional economic governance (Briceño-Ruiz & Morales, 2017). This is not to say that the persistence of the (CP)TPP proved that U.S. hegemony was stable. That a more limited accord advanced without U.S. participation showed that the ongoing crisis of legitimation had entered a new phase.

Hegemonic Crisis

Notwithstanding the concerted effort to resurrect the TPP after the U.S. withdrawal, the Trump administration’s mercantilism did create something of a “strategic vacuum” in the trans-Pacific “space” (Griffith et al., 2017). The (CP)TPP may yet yield dividends for the United States; the United States could return to the multilateral regime at some point in the future, and the narrower agreement did advance the interests of important factions of transnational capital. The CPTPP also appeared to re-create some momentum for trade liberalization at a time when global trends were pointing in the opposite direction. However, the inability of the Obama administration, bipartisan backers in Congress, and supporters in the business lobby to implement the original agreement is illustrative of a crisis of U.S. hegemony in the international political economy. It left the door open for the Chinese model of trade governance to gain traction in Asia and elsewhere. From the perspective of liberalization advocates, it put U.S. trade policy back in the bilateral “cul-de-sac” of the pre-TPP period. And in the context of the Western Hemisphere, it demonstrated that U.S. “leadership” would service the discrete interests of Trump’s “America first” agenda, with little regard for trading partners or multilateral institutions.

The twists and turns in the TPP process show that, although elite ideas constitute the specific policies used to maintain and/or extend hegemonic relationships, these ideas need to find continual resonance with groups outside of the elite orbit. Indeed, popular “common sense” is an important feature of hegemony, though one that has been overlooked in IR/IPE, even in critical and neo-Gramscian traditions. If ruling ideas and ideologies fail to resonate with mass common sense, the latter can act as an obstacle to elite projects (Hopf, 2013). A consensus perpetuated by policy elites can be challenged in ambiguous ways. This “bottom-up” rejection need not entail a fully fledged, emancipatory counter-hegemonic movement or coherent “war of position,” in Gramscian terms (as represented by elements of the Pink Tide). It can take more “populist” forms, which invariably throw up new and unanticipated contradictions. The tensions of the Trump presidency, in which the White House attempts to boost exports and lower trade deficits while strong-arming countries into bilateral deals, all while pursuing deregulation and privatization at home, are symptomatic of the muddled forces that brought Trump to power—a coalition that included disaffected working-class voters alongside groups strongly committed to neoliberal capitalism.

In other words, shifts in popular common sense can destabilize a hegemonic consensus, compelling dominant groups to utilize other forms of power to maintain structural advantages. The resulting confusion can exacerbate “organic” crises that may be structural in origin. For Robert Cox, “the evidence for a decline of hegemony is to be sought less in the loss of power than in the tendency toward unilateralism in furtherance of specific interests” (1996, p. 245). Such unilateralism manifests in the form of a greater deployment of coercive force, further damaging the consensual features of a hegemonic system. With respect to Latin America, Trump’s more coercive tack was represented not only by his malicious approach to the issue of Mexican and Central American migration but also by the reversal of Obama’s rapprochement with Cuba and statements threatening military action against Venezuela. Additionally, the Trump administration’s preference for bilateral trade deals is based on the assumption that they allow the United States to maximize its structural leverage and compel the other side to accept terms that advance the interests of U.S. capital in a narrower, more immediate sense. The effort to play Mexico and Canada off of one another in the 2017–2018 NAFTA renegotiations provided a telling example of the administration’s move away from multilateralism.

Conclusion

The Trans-Pacific Partnership was, in the Obama administration’s slogan for the agreement, “Made in America.” Although the mega-trade deal was constructed by the United States to consolidate a strategic “pivot” to Asia, its connection to Latin America evidenced a concerted effort by the United States to protect and reinforce its power in its traditional “backyard.” In the context of the gradual erosion of the Washington Consensus, this effort extended beyond the TPP, which was one element of a multidimensional but contested process. Across a range of issues, U.S. foreign policy was compelled to respond to the counter-hegemonic challenges associated with the Pink Tide, including rival projects of economic integration, such as ALBA and Mercosur.

From a neo-Gramscian perspective, hegemony combines coercive elements alongside the ideological production of consent, conceptually spanning levels of analysis linking foreign policy to class interests within and across national borders. Designed to facilitate capital accumulation and transnationalization, FTAs overlap institutional and structural forms of power. In the post–Cold War period, they ensured that the United States’ privileged position in the global political economy would be protected while the mobility of transnational capital was enhanced. In opposition to the notion that Latin America had firmly entered a post-hegemonic era in international relations, the TPP, by putting the United States at the center of an expanding liberalization regime and providing it with an architectural role in the harmonization of existing rules, showed U.S. agency was aimed at a renewal of its hegemony in the hemispheric political economy. Among other factors, the TPP responded to the growing importance of China in the region.

The nascent elite consensus captured in the original TPP was overtaken by events. As a manifestation of neoliberal “globalism,” the TPP was challenged from “below,” including within the United States itself. The Trump administration upended U.S. trade policy and reoriented U.S. hegemony, which moved away from the institutional power of multilateralism and toward a more coercive posture. As the remaining countries sought to finalize the CPTPP and take the trans-Pacific project forward, the United States’ hemispheric hegemony appeared closer to crisis than a settled reconstitution.

Further Reading

Biegon, Rubrick. (2017). US power in Latin America: Renewing hegemony. London: Routledge.Find this resource:

Chodor, Tom. (2015). Neoliberal hegemony and the Pink Tide in Latin America: Breaking up with TINA? New York: Palgrave.Find this resource:

Dian, Matteo. (2017). The strategic value of the Trans-Pacific Partnership and the consequences of abandoning it for the US role in Asia. International Politics, 54(5), 583–597.Find this resource:

Griffith, Melissa K., Steinberg, Richard H., & Zysman, John. (2017). From great power politics to a strategic vacuum: Origins and consequences of TPP and TTIP. Business and Politics, 19(4), 573–592.Find this resource:

Lim, C. L., Elms, Deborah K., & Low, Patrick (Eds.). (2012). The Trans-Pacific Partnership: A quest for a twenty-first century trade agreement. Cambridge, U.K.: Cambridge University Press.Find this resource:

Panizza, Francisco. (2009). Contemporary Latin America: Development and democracy beyond the Washington consensus. London: Zed Books.Find this resource:

Riggirozzi, Pia. (2012). Region, regionness and regionalism in Latin America: Towards a new synthesis. New Political Economy, 17(4), 421–443.Find this resource:

Van Apeldoorn, Bastiaan, & de Graaff, N aná. (2017). Obama’s economic recovery strategy open markets and elite power: Business as usual? International Politics, 54(3), 356–372.Find this resource:

Yu, Lei. (2015). China’s strategic partnership with Latin America: A fulcrum in China’s rise. International Affairs, 91(5), 1047–1068.Find this resource:

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