Containment through trade? Explaining the US support for the trans-pacific partnership

Abstract

The chapter discusses the political-economic factors driving the US government's decision to embark in negotiations for a mega-trade agreement with key Asian partners such as the Trans-Pacific Partnership (TPP). The main argument advanced in this paper is that this strategy was motivated by concerns about the changing relative balance of economic power and, consequently, by the potential prospects for improving the US' relative economic position in the international economy due to the trade and investment diversion effects of the TPP. Evidence for the expected distributive effects of the agreement, the historical unfolding of events and policymakers' motivations, and lobbying by key domestic interest groups lend support to this view. The paper concludes by speculating about the TPP's implications for the stability of the multilateral trading system.