Walking Out: America’s New Trade Policy in the Asia-Pacific and Beyond (2024), Michael L. Beeman, Walter H. Shorenstein Asia-Pacific Research Center, Stanford University, $30.00

One of the past decade’s most important geopolitical developments has been America’s turn away from the trade liberalisation agenda that it pursued after the Second World War. Nowhere has this reversal been more clear than in its trade relations in the Asia-Pacific, home to the world’s fastest-growing economic region and 60 per cent of the planet’s population.

The most common reason offered for this shift in US trade policy is one of two words: ‘China’ and/or ‘Trump’. That, however, is not the view taken by Michael L. Beeman, a former senior trade official at the US Department of Commerce and the Office of the US Trade Representative (USTR).

In Walking Out: America’s New Trade Policy in the Asia-Pacific and Beyond (2024), Beeman has written a fresh and remarkably non-ideological analysis of the causes and effects of this sea-change in US trade policy. In constructing his arguments, Beeman draws on his professional experience, but also a sophisticated grasp of trade economics, an appreciation for history and international relations, and careful attention to US domestic politics. Beeman’s book, however, is also that rarity: a text comprehensible to the non-expert that simultaneously makes significant contributions to the debates surrounding trade and America’s place in the world.

China’s departure from many of the foreign and economic policies that it pursued between 1980 and 2012 is part of this story. For Beeman, however, the decisive factor driving changes in US trade policy is the upheaval in American domestic politics since 2015. It reflects a convergence on trade issues between the New Right and the Progressive Left. ‘America’s sharp trade policy swerves to the New Right and the Progressive Left’, Beeman writes, ‘having bent both ends of the US political spectrum back toward each other and into rough alignment in a new policy dimension.’ For all their differences on constitutional and cultural questions, the New Right and the Progressive Left have remarkably similar positions on many economic topics. In many ways, this consensus is defined by their attitudes towards trade with other nations.

America’s trade debates have not always broken down along party lines. Scholars like Douglas A. Irwin have shown that economic differences between regions often explain the contrasting trade stances taken by politicians from the same party. Following the Second World War, however, US domestic politics settled on a position of trade liberalisation. This enabled Americans to purchase more affordable goods, and reduced costs for US businesses. It also helped advance a goal that many US presidents have pursued since the republic’s creation: ever-growing and secure American access to foreign markets – something that could only extend America’s influence throughout the world.

While post-1945 US trade policy sought to free up global markets, one focus of its policymakers was upon establishing globally accepted rules for international trade. The nature of those rules, they also understood, would be heavily influenced by America as the world’s dominant economic power. Indeed, Beeman shows that US officials worked hard to ensure that the rules governing trade – especially as expressed through the General Agreement on Tariffs (GATT), which later became the World Trade Organization (WTO) – served America’s long-term economic and strategic interests, not those of an amorphous global world order.

Over time, America’s direction of this process encountered challenges. China is not the first major postwar Asian power to pursue trade policies that negatively affect the US. In the 1980s, Beeman reminds us, Japan (like today’s China) ‘pursued state-supported targets that led to export deluges into the US market, manipulated its currency, poached US industrial designs, and used innovative approaches to work around the core rules of international trade’.

While America responded with a range of defensive and offensive measures, Washington did not blow up the international trading system in the name of beating Japan. Instead, US policymakers countered Japan’s actions without throwing away decades of work invested in building a global trading system that served America’s national interests. They even used many of the existing multilateral rules built into that system to secure support from other countries to produce beneficial outcomes for America.

America was able to stick to its overall approach because of a broad cross-party consensus about trade liberalisation’s economic and foreign policy benefits. While some Americans in the 1980s insisted that America should be ‘more like Japan’ (much as some today hold that America should mimic various Chinese policies), most US policymakers did not lose sight of how the US-led trade system worked well for America and Americans.

The evaporation of that consensus, Beeman contends, is what began altering American trade policy in the mid-2010s. Factors like the WTO’s growing unwieldiness as it became larger, and the tendencies of some judges in the WTO’s dispute resolution system to move beyond their narrow mandate, helped sour some US policymakers on the rules-based system. But the key element at work, Beeman emphasises, was the emergence of a zero-sum mentality in US domestic politics from the 2000s onwards. This has made it much harder for American politicians to talk about complicated policy subjects and arrive at a coherent set of positions embraced by a critical mass of Democrats and Republicans.

According to Beeman, the same polarisation created room for negative views of trade liberalisation to dominate the debate. ‘As America lost its capacity to resolve its problems at home’, he writes, ‘its two political camps, once unable to agree at home, were able to agree on looking outside its borders for blame.’ Many associate this development with the rise of Donald Trump and his brand of politics in the Republican party, but Beeman underlines the extent to which important segments of Democrat opinion – especially those associated with unions – had become dissatisfied with trade liberalisation as early as the mid-1990s.

That helps explain why the Biden administration, despite making noises about returning to a pre-Trump view of trade, continued down the Trumpian trade path. Surveying the Biden administration’s trade posture, Beeman argues that ‘What became more apparent over time was that it… was a union-centred, and at times union-directed, trade policy.’ More generally, he adds, ‘the administration’s trade policy continued to prioritise the fundamentally anti-free trade and broadly anti-corporate views of its trade union and civil society constituents’.

The end result has been less a move towards outright protectionism on America’s part than it has been the production of a highly unstable, incoherent, confused, and confusing set of US trade policies that hurt Americans just as much as they seek to punish bad actors like China.

The rules-based trading system designed by American policymakers, Beeman illustrates, was no free trade nirvana. Protectionist elements pervade all WTO members’ trade policies. What mattered, Beeman shows, were two things. First, that there were rules and that they injected a high degree of predictability and certainty into the international trading system. Second, there was an established forum in which America could exercise huge influence upon global trade and slowly negotiate a widening opening of global markets to its commerce.

The costs of abandoning this approach, however, extend beyond trade. America’s new mishmash of trade policies and New Right and Progressive Left tendencies to embrace (apparently without realising that they are doing so) neo-mercantilist zero-sum conceptions of trade – long ago comprehensively refuted in Adam Smith’s Wealth of Nations – have actually created space for America’s most powerful geopolitical rival, China, to exert ever-growing economic and political influence throughout the Asia-Pacific. As Beeman remarks: ‘In the Asia-Pacific, America’s absent leadership, self-imposed alienation, and rejection of prior assumptions that others still supported came amid China’s accelerating export expansion and economic influence.‘

One example of this self-defeatism was America’s withdrawal from and effective scuttling of the Trans-Pacific Partnership (TPP) in January 2017. During the 2016 presidential campaign, this trade agreement was heavily criticised by Trump and Senator Bernie Sanders, thereby underscoring the New Right-Progressive Left alignment on trade. Besides America, the 12 TPP countries included strong US allies such as Australia and Japan, US neighbours such as Canada and Mexico, and emerging economies such as Indonesia, Vietnam, and Malaysia, to which many American businesses were major exporters.

Significantly, China was not a TPP member. Beeman points out that Barack Obama even urged Congress in January 2016 to support TPP on the grounds that ‘with TPP, China doesn’t set the rules in the region, we do’. In 2018, however, the remaining 11 TPP members created the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Among the CPTPP’s applicant members today is none other than the People’s Republic of China.

This raises two questions for US policymakers. First, does anyone doubt that, if China enters the CPTPP, Beijing will try to use this forum to diminish American influence throughout the Asia-Pacific? As Singapore’s prime minister warned in 2016, China is ‘engaging all of the countries in the region around its own version of trade agreements, and they’re sure not worried about labor standards, or environmental standards, or human trafficking or anti-corruption measures’. Second, given America’s precipitous abandonment of TPP, won’t CPTPP members be wary of any future American application to enter the CPTTS, a trade-zone presently ranked as one of the world’s largest by GDP?

What makes matters worse, Beeman observes, is that America’s unilateralist approach to trade policy throughout the Asia-Pacific since 2017 has been ‘as (or more) off-putting to countries across the region as Beijing’s leveraged demands on them’. Regional allies like Japan and Australia, for example, were caught in the crossfire of the first Trump Administration’s (failed) effort to force concessions from China by raising steel and aluminum tariffs. But, Beeman writes: ‘As long as America continues to discriminate to restrict trade, as opposed to offering reciprocal preferences to expand trade, resetting normalised trade with the rest of the world will continue to provoke new foreign relations problems with its allies and adversaries alike.’

The damage, however, will not be limited to US interests abroad. America’s growing use of protectionist measures will also, Beeman states, create ‘new opportunities for interest groups to try and capture favorable decisions from America’s policymakers, [thereby] opening the door for further discrimination among them as well’.

That is a recipe for serious domestic problems. These include: incentivising American companies to focus on extracting privileges from the US government rather than out-innovating and outcompeting their domestic and foreign rivals; creating a cash bonanza for trade lawyers with a vested interest in keeping trade regulations as numerous and byzantine as possible; growing inefficiencies throughout the US economy; and, lastly, higher prices for American consumers.

Can America reverse its present trade trajectory? Presently, the answer is no. US domestic politics remains deeply sceptical of the pre-2015 rules-based trading order and no American political leader of sufficient weight is currently waving the free-trade flag. This means, Beeman warns, that America has effectively ‘ceded its role as rule-maker for that of rule-taker – one of responding and reacting to a new status quo for regional and global trade that others are now creating in its place’. How, some will ask, does this put America First?