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Comment by qaq | Hacker News Reader

Hmm totally not being a Trump supporter how does this empower China exactly? Russia's economy is the size of NYC so that is even stranger point especially given Trumps position on " I will lift the restrictions on the production of $50 trillion dollars’ worth of job-producing American energy reserves, including shale, oil, natural gas and clean coal"

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The TPP (and other trade agreements) is largely about establishing key US companies into foreign markets. The US can, unsurprisingly, command the upper-hand in most negotiations due to our massive economic influence. These laws include protections for IP rights, financial regulation, and food/drug safety standards that allow US companies to operate and establish dominance in foreign markets.

If the US refuses to build trade relations, or becomes known for breaking agreements, then that gives China the opportunity to come in and instead establish their entertainment, technology, banking, and consumer goods companies. This would be clearly at the expense of the US and would gradually erode our economic influence around the world.

People around the world drink Coke, eat McDonalds, search on Google, get loans from Wells Fargo, buy stuff on their Visas, etc, largely due to these agreements. This money funnels back to the US to pay salaries, taxes and dividends.

So, short-term, US sheep farmers benefit from not having to compete on fair terms with New Zealand wool. But long-term, all other Americans lose as the income streams from established American companies are transferred to their non-US counterparts.

In particular case of China given the trade imbalance and the currency peg doesn't really look like US has a net gain from current setup. US position in most categories in China is very modest.

Because China wants a piece of this amazing pie the US has cooked up. The US gave up the hard-to-automate, labor intensive industries while keeping a lot of the high-margin, highly-automated industries. So while Chinese companies compete for razor thin margins on smart phone components, American companies sell flavored sugar water all over the world for 500% markup (and gobble up any competition).

That's why the TPP is so important, it specifically excludes China because the goal is to further entrench US companies in SE Asia/Oceania. If the US backs out, then that gives China the opportunity to come in and sell the low-cost smart phones AND overpriced sugar water.

We are competing with China for trade partners and it seems backwards to me to forfeit.

US companies may sell the overpriced sugar water, but are the proceeds really flowing back to the US? Coca-Cola has done the whole tax haven and transfer pricing game for many years now.

Even if there were no corporate taxes, the US would benefit from companies basing their business here.

> but are the proceeds really flowing back to the US?

What do you think they are doing with that money in tax havens? They buy US bonds and invest that money in our markets.

What are you smoking? Of course we have a favorable trade with China, we give them paper dollars and get back real goods in exchange.

Yet somehow they have built up more infrastructure in a year then we did in decades while running a huge trade surplus. We get back disposable crap that does not create any lasting assets.

We already have infrastructure, China had next to none and still doesn't really. A lot easier to grow when you're starting from zero.

The Beijing subway system is already better than NY's: more lines, better quality, clean, safe...

That's just one example but I was impressed when I saw it. And they have been adding 1 new LINE per year in Beijing, wheras we don't even add 1 new station per year in most US cities.

Not exactly related, but being in Tokyo, I now see that Toronto's subway system is a joke. I think it hasn't really been updated since I was born. There's like, three lines in total.

They have 12,000 mi of high speed rail system, (more than the rest of the world combined) we have 0.

> "China ... still doesn't really"

Have you been to China recently?

> Yet somehow they have built up more infrastructure in a year then we did in decades

We spend most on military, social security and medicare. China doesn't.

I think our spending on social security and medicare is certainly a problem. Don't know much about military spending though.

US Government spending:

https://lh5.googleusercontent.com/Rv5UHrNsvcucvflDwwz_pqEjjH...

Having dominant military is a key component is having USD as world's dominant currency which in turn drives about 30-40% of our GDP, so even aside from security aspect it's a very good investment.

It doesn't matter who eats the apples. It matter who owns the orchard.

The US is eating the apples but China owns the orchard.

> This money funnels back to the US to pay salaries, taxes and dividends.

Or rather to Bermuda, to fill the 0.5% tax-free accounts. So the sheep farmers are screwed and everyone else is screwed too. This is why people reject free trade (or think they do that by voting someone like Trump, which is another topic).

Maybe in some part, but there are also people at Visa who have to run the servers, create business agreements, manage people, etc whose jobs are at risk in a shrinking company.

big corporations do not employ the majority of jobs in america.

http://smallbusiness.house.gov/uploadedfiles/april_recess_sm...

I think the death of small businesses is not a consequence of free trade

Here in Germany many people don't want the TPP, so that is at least one reason for us to be happy about Trumps election.

It's good to hear that Germans are so happy. They would have been even happier to learn that TPP is a proposed trade deal between twelve Pacific Rim countries. It never included Germany.

ah I confused it with the Transatlantic Trade and Investment Partnership

Well if tpp is dead, then the transatlantic one is probably as well, and ceta will be the only one.

As a Canadian, I'm really glad it's over. From my perspective it was mostly the US forcing its money-corrupted legislation onto weaker economies.

> Hmm totally not being a Trump supporter how does this empower China exactly?

China's actively seeking trade deals all over the world. The US taking a strongly antitrade position could improve their relative position. The devil is really in the details, though.

Actively is putting it lightly. They are aggressively seeking trade deals and investment opportunities. Especially since they use those to further their foreign policy aims.

The geopolitical implications of Trump's isolationist position is going to be significant.

Do you have an example where China implemented a trade agreements that resulted in significant trade balance surplus for the trading partner? (aside from energy)

China has been doing some pretty complex deals with countries all across Africa - financing and building hydroelectric dams and other massive infrastructure buildouts. These are long-term deals that often include concessions for oil or other natural resources, so it's difficult to pin them down to a clear surplus/deficit.

Generally in such deals Chinese companies are the contractors doing the work and suppliers of goods, so again outside of energy I don't think China implemented any agreements that provided surplus for the trading partner.

New Zealand has a trade surplus with China. NZ was in the TPPA, but already have a FTA with China. They were trying for one with the US, but the US preferred the TPPA. [1][2]

Since the China FTA came into effect, China has replaced the US as NZ's number 1 trading partner. The US is 4th on that list.[3]

Actual graph showing surplus:

[1]http://thediplomat.com/2014/01/feeding-the-dragon-lessons-of...

[2] http://www.stats.govt.nz/browse_for_stats/industry_sectors/i... [3] http://www.stats.govt.nz/browse_for_stats/snapshots-of-nz/nz...

OK I stand corrected Energy and Food but New Zealand is definitely more an exception then a norm. We are running close to 400b trade deficit with China.

The TPP had very specific political goals - it created a common market for the US, a couple of Latin American countries, and most of the major East Asian and South Pacific economies... but NOT China. The idea being to both bind American allies in Asia more closely to it, and to ensure that if/when China wanted expanded trade with TPP members it would have to deal with rules that had originally been set by the US and its allies.

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