Candidates: Stop comparing your opponents to Hitler

Remember how Hillary Clinton compared her GOP opponents to the Nazis, declaring thatRepublicans wanted to “go and literally pull [illegal immigrants] out of their homes and their workplaces” and “round them up” and put them in “boxcars”? Her comment was outrageous, but it was par for the course. After all, Clinton had earlier compared GOP presidential candidates to terrorists .

It’s terrible for a Democrat to compare Republicans to the Nazis. But for a sitting GOP governor seeking his party’s nomination to do it is beyond the pale.

Yet that is precisely what John Kasich has done in a new Web ad attacking Donald Trump. The Kasich ad(ironically titled “Trump’s Dangerous Rhetoric”) declares: “You might not care if Donald Trump says Muslims must register with their government because you’re not one. And you might not care if Donald Trump says he’s going to round up all the Hispanic immigrants, because you’re not one. And you might not care if Donald Trump says it’s okay to rough up black protesters, because you’re not one. And you might not care if Donald Trump wants to suppress journalists, because you’re not one. But think about this: If he keeps going, and he actually becomes president, he might just get around to you. And you better hope there’s someone left to help you.”

If that language sounds familiar, it is intentionally paraphrasing German Lutheran pastor Martin Niemöller’s famous poem following World War II: “First they came for the Socialists, and I did not speak out — Because I was not a Socialist. Then they came for the Trade Unionists, and I did not speak out — Because I was not a Trade Unionist. Then they came for the Jews, and I did not speak out — Because I was not a Jew. Then they came for me — and there was no one left to speak for me.”

Keep in mind that Niemöller — a survivor of the Dachau concentration camp — was talking about the German people’s responsibility for the Holocaust. When Niemöller said “they came for the Jews,” he meant to take them to the gas chamber. As the United States Holocaust Memorial Museum explains on its Web site, “his point was that Germans . . . had been complicit through their silence in the Nazi imprisonment, persecution, and murder of millions of people.”

And Kasich thought it was appropriate to use that analogy to describe Donald Trump?

Kasich’s ad is not only offensive, it is misleading. It states Trump is going to “round up all the Hispanic immigrants.” No, he isn’t. Trump says he’s going to deport illegal immigrants. You may agree or disagree with what Trump proposes, but there’s a big difference between deporting people who are here illegally and “rounding up” everyone of a particular ethnicity. And let’s not forget: Trump says he’s going to let them all back in. As Trump put it in an interview , “I would get people out and then have an expedited way of getting them back into the country so they can be legal. . . . A lot of these people are helping us . . . I want to move ’em out, and we’re going to move ’em back in and let them be legal.”

That’s hardly the Final Solution.

The Kasich ad also falsely declared that Trump wants to “suppress journalists” while showing video of his security guards removing Univision anchor Jorge Ramos from a press conference. Ramos was removed for disrupting the press conference, and Trump later invited him back and answered his questions once he agreed to wait his turn to speak. That hardly counts as “suppression.”

The ad also backfires. It is intended to highlight the troubling things that Trump has been saying, but it is so over the top, so outrageous, that even people who might not particularly support Trump will recoil from it. Trump should be called out for his recent comment that a Black Lives Matter protester who disrupted one of his events “should have been roughed up.’ In the United States, no one deserves to get “roughed up” for exercising their First Amendment Rights. And his answer when asked by a reporter if we should keep a “database” of Muslims in America — “I would certainly implement that, absolutely” — was repulsive.

Yet when Kasich compares Trump to Hitler — and uses misleading statements to do so — what Trump says is overshadowed. Kasich calls Trump “divisive and insulting,” yet he manages to be even more divisive and more insulting than Trump himself. That’s quite an achievement.

Kasich’s ad achieves a political trifecta: It is offensive, inaccurate and ineffective. Here’s a little advice for Kasich, Hillary Clinton and any other candidate who wants to follow them down into the fever swamp of Nazi analogies: Don’t.

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The Clinton solution for refugees: Guantanamo

Hillary Clinton has joined Barack Obama in accusing Republican of betraying American values for raising legitimate security concerns about admitted Syrian refugees, declaring last week that “slamming the door on refugees isn’t who we are.”

Funny, because when her husband was president, he “slammed the door” on refugees — the cell door at Guantanamo Bay.

In the early 1990s, tens of thousands of refugees fled Haiti and sought refuge in the United States following the military coup that overthrew President Jean Bertrand Aristide. They did not include Islamist terrorists, but many posed another perceived threat: They had HIV. Instead of admitting them into the United States, President Bill Clinton ordered the Haitian refugees be held at Guantanamo, and then repatriated back to Haiti.

During the 1992 election Clinton criticized President George H.W. Bush’s practice of repatriating Haitian refugees as “cruel” and “immoral,” and promised to end the practice. But after winning the presidency, Clinton reversed course, and tried to stop the Haitian exodus by declaring that the refugees would be intercepted and sent back to Haiti. It didn’t work, and eventually he decided to house tens of thousands of Haitian refugees in Guantanamo. A federal judge declared Clinton’s policy of detaining refugees at Gitmo “outrageous, callous and reprehensible” and criticized him for inflicting on the Haitians “the kind of indefinite detention usually reserved for spies and murderers.” After an American-led force restored President Aristide to power in 1994, the Clinton administration told the remaining refugees they had to return home, declaring: “Under no circumstances will any Haitian currently in Guantanamo be admitted to the United States.”

Did Bill Clinton “betray our values” in refusing to admit these refugees?

It was not the first time Clinton saw Guantanamo as the solution for a refugee crisis. In 1980, some 125,000 Cubans fled the Castro regime as part of the Mariel boatlift. While most were fleeing oppression, the regime also released thousands of criminals from Cuban jails and patients from Cuban mental health facilities and sent them to America. The Carter administration chose Fort Chaffee, Ark., as a detention facility to hold the refugees. But then-Arkansas Gov. Bill Clinton told the White House he did not want criminal and mentally unstable Cubans brought into his state. When the White House objected that there was nowhere else to put them, Clinton recounted in his memoir “My Life,” he told the White House: “We still have a base at Guantanamo, don’t we? And there must be a gate in the fence that divides it from Cuba. Take them to Guantanamo, open the door, and march them back into Cuba.” The Carter administration overruled Clinton’s objections and sent the refugees to Arkansas.

Later, as president, Clinton reversed the 35-year-old U.S. policy of granting asylum to Cuban refugees fleeing communist persecution. In its place, he instituted an inhumane policy called “wet foot, dry foot” in which he offered Cubans asylum based on the Darwinian principle of “survival of the fittest” — refugees intrepid enough to evade the Coast Guard and reach dry land could stay, while those interdicted at sea would be sent back to their Cuban communist masters.

Now, Hillary Clinton is accusing Republicans governors of “turning away orphans” for refusing to accept Syrian refugees, when her own husband did the same with Haitian and Cuban refugees. Unlike the Haitian and Cuban refugees her husband sent home, today’s Syrian refugees pose a major national security challenge for the United States. While most refugees are innocent men, women and children fleeing terror and persecution, we know that Islamist terrorists have already successfully used the U.S. refugee program as cover to infiltrate terrorists into our country. It only takes a few Islamic State infiltrators to bring the chaos we see in Paris today to our shores.

Obama administration officials have testified that they cannot assure Congress that they can effectively screen the refugees. And even if the vetting process were perfect, a November 2014 poll of Syrian refugees found that, while the vast majority oppose the Islamic State, a significant minority of 13 percent support the terror network. At that rate, if the United States were to admit 10,000 Syrian refugees, as the Obama administration proposes, it could be admitting as many as 1,300 ISIS supporters. It’s hard enough to screen for Islamic State operatives. Screening for Islamic State sympathizers is virtually impossible.

These are serious security issues. But instead of working with Republicans to resolve them, and finding a bipartisan way forward to help the refugees, President Obama is politicizing the issue — and Hillary Clinton is joining the political bandwagon. She ought to be careful. It’s tricky claiming the moral high ground on refugees when President Clinton’s preferred solution was to send them to Guantanamo Bay.

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Wounded warriors on the ski slopes

It’s a pity that Alexis de Tocqueville won’t be on the slopes at Beaver Run Resort in Breckenridge, Colo., this week. The French thinker, who wrote perceptively about America in the 1830s, noted that he “often admired the infinite art with which the inhabitants of the United States managed to fix a common goal to the efforts of many men and to get them to advance to it freely”—that is, without a government directive. One of the most inspiring modern manifestations of that “infinite art” can be found in the Hartford Ski Spectacular hosted by Disabled Sports USA.

The annual event, which this year runs from Nov. 30 to Dec. 6, attracts nearly 800 participants, many of them military veterans, with disabilities ranging from missing limbs and severe spinal-cord injuries to blindness and traumatic brain injury. The Ski Spectacular has snowballed since it was first held in 1987. Each year hundreds of people with disabilities take part in alpine and Nordic skiing, snowboarding, biathlon, sled hockey and curling. Members of the U.S. National Paralympic Ski and Snowboard Team are among the volunteer instructors.

Disabled Sports USA grew out of an initiative in the late 1960s by World War II veteran Jim Winthers, who pioneered “three-track” skiing—carving down the slopes on one leg with the help of an outrigger ski in each hand. Winthers and some of his comrades from the Army’s 10th Mountain Division realized that skiing could be therapeutic for wounded vets returning home from the Vietnam War.

One such veteran, an Army sergeant named Kirk Bauer who had lost his left leg to a grenade in the Mekong Delta, was lying in his hospital bed thinking about “a list of things I could no longer do,” he told me recently, when Winthers offered to teach him how to ski. It sounded crazy at first, but he agreed. The confidence he gained from skiing, he says, helped “turn my life around and unlock the keys to success.”

Mr. Bauer went on to summit Africa’s Mount Kilimanjaro and complete both the Boston Marathon and the Bataan Memorial Death March (a marathon through the New Mexico desert). Along the way he earned a law degree from Boston University and went to work on Capitol Hill.

In 1982 Mr. Bauer signed on as executive director—and the first paid staff member—of the organization that eventually became Disabled Sports USA. Today the nonprofit group has more than 100 chapters in dozens of states, serving some 60,000 disabled athletes. It has also expanded beyond skiing to include programs in 40 different sports, including cycling, golf, kayaking, water skiing, fishing, rock climbing and scuba diving.

Athletic participation improves physical and psychological health. But it also helps individuals build self-confidence and support networks, with positive results for the athletes’ employment, their communities, and most important their families. Disabled Sports USA offers testimonials on its website, any of which show the depth of its impact. In the words of Mollie Borders on the participation of her husband John: “The hospital healed John’s physical injury, but Disabled Sports USA healed the family.”

The organization’s Warfighter Sports program has given nearly 10,000 wounded veterans and their family members the opportunity to participate free of charge in dozens of winter and summer sports at more than 100 events across the country each year. But it’s important to point out that many of Disabled Sports USA’s programs—including the Hartford Ski Spectacular—are open to civilians as well.

In recent years Disabled Sports USA has received some limited government funding. But true to its original spirit, the organization runs mostly on private donations and thousands of volunteered hours from some of the most qualified adaptive-sports instructors in the country. Although Mr. Bauer is no longer the only paid employee, just 12% of the group’s budget goes to administrative and fundraising expenses. Tocqueville would certainly applaud.

Mr. Wolfowitz, a scholar at the American Enterprise Institute, is a former deputy secretary of defense.

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Blue’s clues for top schools: Lessons from KIPP STRIVE

On November 9-10, the US Department of Education bestowed the Blue Ribbon award to 285 public schools and 50 private schools across the country. The goal of the 33-year-old program is to recognize the best performing schools in the nation: public, charter, private, magnet, alternative or Title I.

For teachers, students and families, the Blue Ribbon award is a huge accomplishment. “This honor recognizes your students’ accomplishments and the hard work and dedication that went into their success…You represent excellence—in vision, in implementation, and in results—and we want to learn as much as we can from you,” said US Secretary of Education Arne Duncan in a video message to the awardees.

The majority of 2015 Blue Ribbon winners — 303 of 335 schools — fall into the “Exemplary High Performing” school category. This means the school is among the top 15% as measured by its test results in English language arts and mathematics, among other criteria. This year, fifteen Blue Ribbon winners are charter schools, and five of the charters are Title I status. KIPP STRIVE Academy in Atlanta is one of the five Title I charter schools, and it was the only middle school to receive the award.

KIPP STRIVE’s student body — 99% black and 78% qualifying for free and reduced-price meals — are shattering demographic and class-based myths about student achievement. Results from Georgia’s 2013 test show that KIPP STRIVE students are outperforming statewide results, as seen below.

2013 CRCT RESULTS

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Once students graduate, a number of them enroll in high-performing public high schools or earn a scholarship to attend a private high school. Contrary to popular belief, KIPP STRIVE’s leadership is not enticing the “best and brightest” students to enroll at KIPP STRIVE just to boost test scores, a claim opponents of charter schools often make.

I was blessed to work with a diverse group of visionaries from 2007-2009 to open KIPP STRIVE. Today, I am proud of what the school is doing to prepare its students for high school, college, and beyond.

As I reflect on the opening of KIPP STRIVE, I wanted to share some things I learned about school organization that other founding school board members or Parent-Teacher Organizations (PTO) across the country should keep in mind.

A quality principal matters—a lot: Leadership is essential to any school. Ed Chang, our founding principal, was well trained through Building Excellent Schools and the Fisher Fellowship. Find a principal with the requisite qualifications for leadership and invest in additional professional development.

 Regulatory relief matters: Our principal hired all teachers and staff, managed the school budget, and negotiated many of the school’s contracts. Georgia’s charter law, coupled with supportive Atlanta Public School regulations, made this possible. School founders and PTO members should push for site-based autonomy. In my experience, shedding layers of bureaucracy gives school leaders the best chance to create well-functioning and high-performing schools.

Board members do not manage a school: Trustees must stay in their lane — they need to govern, and not crossover into school-level management. Board members must leverage their professional network to support the school and let the principal do the managing.

A school-parent partnership is more than a slogan — it must be a lifestyle: KIPP STRIVE’s principal and board members visited nearly 150 homes to speak with parents about the mission of the school, our expectations of students, and our expectations of parents.  Parents are unaccustomed to school personnel visiting their home, but these conversations are important for conveying the belief that parents have a bargain to uphold, too.

Creating a Blue Ribbon school like KIPP STRIVE does not happen overnight. It takes intentional and thoughtful leadership, and it requires conditions that allow those leaders to have the autonomy to act on their innovative instincts.

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Race to the Top in retrospect

Today, Secretary of Education Arne Duncan is giving a speech at a high school in Boston that has improved after receiving a federal School Improvement Grant (SIG). He’ll be unveiling his department’s latest report on the results of the SIG program and a new four-year report on Race to the Top, the Obama administration’s signature initiative in K-12 education.

Secretary of Education Arne Duncan visits Boston on November 12, 2015. Department of Education Flickr.

The report casts SIG in a favorable light, and claims that Race to the Top has helped plant the seeds for long term change. Color us here at AEI skeptical.

This summer I penned an essay in Education Next on the legacy of Race to the Top, an effort that:

could have designed a program that told the states, “Give us your best ideas, and we’ll fund the states that are pioneering the most promising approaches.” … Instead, the administration proposed 19 “priorities” that states seeking Race to the Top funds would be required to address. States could earn points in each category by promising to follow administration dictates, with the most successful states winning the cash. Few of the priorities entailed structural changes. Instead, they mostly emphasized things like professional development, ensuring an “equitable distribution” of good teachers and principals, “building strong statewide capacity,” “making education funding a priority,” and so on. ….

In the end, the effort suffered for its emphasis on promises rather than accomplishments, ambiguous scoring criteria, and murky process for selecting and training judges. Conservative analyst Chester E. Finn Jr. concluded that the review process didn’t reflect “what’s really going on in these states and the degree of sincerity of their reform convictions.” The reliance of winning states on outside consultants and grant writers also meant that the commitment of key legislators, civic leaders, or education officials to the promised reform agenda could be pretty thin. Every one of the dozen winning states has come up short on its promises.

But even though the program did not live up to its promise, there are valuable lessons it taught. Here are two:

Build Reliable Infrastructure. It was no fault of the Obama administration, but the infrastructure to do Race to the Top well simply didn’t exist. Criteria for who should judge and how they should do so were made up on the fly. The need to do this in a hurry, along with conflict-of-interest rules, made it hard to assemble a first-rate pool of reviewers. U.S. Department of Education officials also had to combat concerns about the review process appearing too “political.” In the future, clear norms regarding reviewers, criteria, use of evidence, and institutional autonomy should be established before such programs are created.

Beware of Opportunity Costs. The Obama administration dangled $4 billion in federal funds at the height of the Great Recession and linked them to states demonstrating that they’d “prioritize” education spending. At a time when states could have been using the crisis to focus on finally doing something about underfunded pensions or much-needed belt-tightening, they were preoccupied with dreaming up new spending proposals. Opportunity costs don’t just come in policies pursued and tabled, but also in the debates that policymakers should and don’t have.

For the whole thing, feel free to peruse the full article.

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A ‘perfect storm’ for the emergence of drug-resistant bacteria

Are we reverting to a pre-antibiotic age? Dirty hospitals, poor prescribing practices by physicians and poor patient adherence to correct antibiotic use mean that routine medications are becoming increasing obsolescent.

Twenty20 License

The risk is accelerating because of new global substandard medicines — caused by inferior ingredients or inadequate production techniques — that are driving a new wave of antimicrobial resistance (AMR). With few financial incentives for major pharmaceutical companies to find new antimicrobial agents, the future may be bleak. Old medicines will become obsolete, and few new medicines will be there to replace them.

The U.K. government considers that AMR could cost society a fortune within decades — perhaps a six percent reduction in global wealth, or up to $14.2 trillion ($14,200 billion) by 2050. In my just-released study on how substandard medicines contribute to antimicrobial resistance, I found that the threat of AMR is increasing due to poor quality medications, and that India is ground zero when it comes to most of these problems.

Research by physicians and scientists at the University of Queensland in Australia suggests that treatment with substandard medicines containing sub-therapeutic concentrations of active ingredients causes resistant strains to breed uncontrolled.

Yet, in the cutthroat world of cheap generic drug production, the lowest cost usually wins the contract to supply — whether to a pharmacy chain, hospital, or even a large government program. As a result, legitimate manufacturers are constantly looking for ways to lower costs and beat the competition. In the West, decent regulators and quick feedback from physicians means that poor quality producers are not likely to survive in the market. But in emerging nations, sloppy production is unlikely to be detected. And in some, notably India, where the government prioritizes protecting the industry over public health, corner-cutting production is actually defended by the government.

While these products are sold as generics, they should not be regarded as such. They are not the bioequivalent of innovator or generic products; many don’t even pass basic physical and chemical stability analysis. They are simply poorly made by legal manufacturers, and they undermine the reputation of real generics.

My team’s research found that roughly six percent of several thousand samples of antimicrobial medicines bought from 19 emerging nations were substandard. India is often viewed as the pharmacy to the developing world, and many of these products are made by legal and government-protected Indian manufacturers. While the vast numbers of cheap medicines produced in India have undoubtedly saved countless lives, their cheap production is a double-edged sword.

Given that antibiotics are so cheap in India, antibiotic use has become, in effect, a substitute for proper sanitation. My researchers found important medicines (like the carbapenem antibiotics that are used to treat infections caused by multi-drug resistant bacteria) available over the counter — in a handful of cases, even without a prescription. In the West, these medicines are strictly used as a last resort for controlling AMR, administered only in hospitals and by trained medical staff.

Another example of the Russian roulette being played in India is the startling number of multi-drug resistant bacteria that were discovered in the public water supply in New Delhi.

While India is not alone in proliferating sub-standard manufacturing, the confluence of inexpensive medicines, sometimes of dubious quality, widespread use of antibiotics, instead of the more traditional and effective methods of hygiene, in addition to the physician incentives to over-prescribe and the vast dense urban settings, have created a perfect storm for the emergence of drug-resistant bacteria. The global spread of the highly resistant New Delhi beta-lactamase-1 (NDM-1) plasmid may have been exacerbated by substandard antibiotics. NDM-1 was first identified in 2008 in a Swedish patient returning from India with Klebsiella pneumonia. It has now been found in 70 countries. National borders are no defense unless strict quarantine measures are in place, such as occurred with the recent West African Ebola epidemic. No one has called for that yet, but it might need to happen at some point.

Rich nations generally have fewer poor quality medicines caused by too few or incorrect ingredients. The problem is more that the formulation of some imported medicines is not as precise and, hence, they don’t function as well, or sometimes at all, by comparison to generic drugs made at home.

This lack of equivalence has been found across a wide range of antibiotic agents including vancomycin, amoxicillin, meropenem, gentamicin, and ciprofloxacin. For vancomycin, the therapeutic failure of allegedly generic vancomycin led to MRSA peritonitis and bacteremia. European and U.S. authorities have boycotted hundreds of Indian-made products that have not shown full equivalence. The German government, for example, suspended 80 Indian products made by 16 companies because they failed established standards and lacked bioequivalence.

It is time for the international medical community and global regulatory bodies to agree on a more effective way to identify substandard antibiotics and remove them from the supply chain. Otherwise, we can look forward to a return to the “pre-antibiotic era” of fatal infections, where quarantines become a way of life, and currently routine surgeries and diseases transform into life threatening situations.

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New Carpe Diem economic news and data quiz

Test your knowledge of recent economic news and data, most of which has been featured in recent posts on the Carpe Diem blog, with this new 10-question quiz.

Loading Carpe Diem Economic News and Data Quiz

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If not this TPP, then what?

Whatever the merits of the existing Trans-Pacific Partnership agreement, it might not be ratified. A number of Members of Congress who may refuse to vote for the Trans-Pacific Partnership (TPP) are avowed free traders. Free traders who find the TPP inadequate as it stands are obliged to offer a sensible alternative, because this opportunity should not be lost.

The problem: there may be no such alternative. Unfortunately, it is probably unreasonable to expect the current administration to renegotiate – this is what they achieved given their priorities.

Japan’s Economics Minister Akira Amari (L) with a journalist, next to U.S. Trade Representative Michael Froman, during a news conference after a four-day (TPP) Ministerial meeting in Singapore February 25, 2014. REUTERS/Edgar Su.

Turning to the next administration, it is hugely encouraging that the next president will have Trade Promotion Authority through his or her first term, where President Obama has only possessed it for a few months. Odds are good the next president will be interested in putting his or her own stamp on trade, as President Obama did in 2010.

The far bigger challenge is successfully renegotiating with 11 partners; they cannot simply be ordered to grant better terms. The simplest step is to renegotiate several key items, perhaps starting with converting non-conforming measures into free trade commitments with long phase-ins. Crucially, asking for more requires the president and Congress to be willing to offer more.

If this cannot work, free traders should not abandon the TPP. The next step would be to shrink the number of participants in the first round. This will harm US relations with the governments (temporarily) excluded and general American credibility to some extent.

However, these costs are far less than the cost of rejecting the TPP or signing what proves to be a weak TPP. Further, the logic of the TPP is for few members and a stronger agreement. The TPP exists in large part because the WTO has become so unwieldy as to make progress there all but impossible.

The US could shunt to a second TPP round the one or two countries which are making the most troublesome demands. It is again true that American side would have to make more concessions as well in a first round with countries more committed to free trade.

A final option is to first conclude a bilateral agreement with Japan that eliminates some flaws in the TPP. The motivation is a good chunk of the short-term benefits from the TPP for the US stems just from the inclusion of Japan. The immediate, sizable obstacle is that neither side may be truly willing, and free trade advocates should be highly cautious in touting this alternative.

Nonetheless, a major accomplishment of the Obama administration was to fold Japan into the TPP, where Japan signing a genuine free trade agreement seemed unthinkable a decade ago. It is now “thinkable” and, indeed, a good deal of work has been done. A US-Japan agreement would set terms for reciprocal access to the Japanese market and serve as the core of an improved TPP.

TPP proponents emphasize that the deal is much better than nothing. The alternative is not nothing. It will certainly not be easy to strengthen the TPP but it is possible and the US would benefit greatly from a strong TPP.

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TPP: A bronze-standard free trade agreement (go for gold)

The Trans-Pacific Partnership covers an enormous amount of ground and has important strengths and multiple weaknesses. Claims of its broad magnificence or awfulness are not credible.

The view here stems from reading all 30 chapters, the four bulky annexes, and various side letters. The first read (a longer paper will follow) says the Trans-Pacific Partnership (TPP) offers a net gain to the US but has too many long-term flaws to be considered a high-quality free trade agreement at this point.

Twelve nation members of the TPP hold a meeting in Lahaina, Maui, Hawaii July 28, 2015. REUTERS/Marco Garcia.

The key issues in reaching this conclusion:

Agriculture

Agriculture market access unquestionably improves under the TPP. Soybeans, a key American export and global foodstuff, would see open trade. This is also true for other products and, if TPP terms were extended globally, there would be hefty gains.

Most American agriculture producers will be understandably happy but, in the long term, the TPP may be seen as a lost opportunity. A number of countries, led by Japan, retain barriers that can in part be traced to retention of America’s own agriculture trade barriers. This is self-defeating behavior for the world’s largest agriculture exporter.

Intellectual Property (IP)

The IP chapter also constitutes a substantial improvement over current global treatment. In a much-needed step, the TPP extends explicit protection to digitized information and trade. And it updates IP protection elsewhere, for example with regard to geographical indications.

IP advances are unavoidably uneven and areas that lag will be keenly felt in the US, the top innovator. For instance, host countries can take up to five years to consider a patent application while protection of technical data can last as little as five years. This combination can undercut the incentive to innovate.

New Areas

The TPP breaks new ground on a number of fronts. The most obvious is e-commerce, which deservingly and beneficially gets its own chapter.

More subtle are the TPP’s broad accomplishments on transparency, which appear in a variety of chapters. With 12 economic and regulatory systems involved that can confuse individuals, companies, and even governments, transparency is the grease for progress from the TPP. This has been recognized in the terms.

Rules of Origin (ROO)

The one vital area where transparency is in question is ROO, which determine what is covered by the agreement. The ROO are generally loose, which fits with the free trade goal of promoting more exchange, not diverting existing exchange into a new bloc.

The problem is complexity. The content requirement to automatically qualify for the TPP is high and extensive rules for certain sectors look politically motivated. Some complexity is unavoidable but the TPP risks rendering firms uncertain how to take advantage of treaty terms and confusing customs agents charged with administering those terms.

State-Owned Enterprises (SOEs)

The SOE chapter sees a sharp tradeoff between present and future. It is a major step forward, especially on transparency, compared to essentially non-existent obligations for SOEs now. But it sets a dangerous precedent. There are too many ways to organize a state sector immune from TPP disciplines.

Sovereign wealth funds are immune, sub-national enterprises are largely immune, and national SOEs can fairly easily organize their subsidiaries to be immune, because a crude 50-percent rule is employed for ownership or board membership. Along these lines, the chapter erodes the argument that the US must set rules so China does not. China could game rules the US just set.

Non-conforming Measures (NCM)

The enormous amount of material on NCMs – where countries are allowed to ignore the agreement – make a case for the TPP overreaching in membership or issues or both. Non-conforming measures are unavoidable to some extent, but it is unwise to introduce new topics then allow precedents of non-compliance.

Vietnam, for example, should have been given long phase-in periods rather than outright protection from so many TPP requirements. The chapter on financial services is largely neutered by the annex on financial services NCMs. Transport services see a huge number of exemptions, possibly driven by America’s own harmful protectionism in shipping.

 

Two issues will receive more attention than they deserve:

Investor-state dispute settlement (ISDS)

Both sides of the debate exaggerate the importance of the ISDS chapter. It will not protect American companies from foreign governments if the latter wish to be predatory and it will not lead to meaningful change in American law. It matters, but not very much.

Exchange Rates

Currency is still more overblown. Japan has not been a currency manipulator for years. China is not a TPP member. Moreover, in 1994, China devalued the yuan 45% yet US unemployment fell to 4.6%. In 2005, China slowly revalued the yuan 30% and US unemployment rose. Exchange rates do not work the way protectionists insist.

 

There are groups loudly opposed to the TPP for whom the terms are a detail. For everyone else, the TPP comes down to a better trade environment in the short term versus long-term problems created by provisions that do not promote genuinely free trade.

In particular, innovation and agriculture are America’s main comparative advantages and the TPP offers notable improvement in both. It is sensible to argue these gains matter most. Against that are the painfully extensive non-conforming measures, badly inadequate treatment of state-owned enterprises, and risky rules of origin warping the future trade environment.

This may indeed have been close to the best agreement possible given the parties. But the outcome is a bronze-standard free trade agreement. The US must do better than bronze-standard free trade agreements.

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America vs. China: Showdown in the South China Sea?

“Expect more.”

That is the succinct response of a senior U.S. defense official when asked informally whether the dispatch in October of a U.S. Navy ship within 12 nautical miles of one of China’s newly constructed islands in the Spratly Island chain was a one-off event. Officials in the Obama Administration seem well aware that failure to follow on with their highly publicized freedom of navigation operations will send a signal of irresolve to China and Asia. The sail-through did little to settle the issue of Sino-U.S. tussling over the South China Sea, and the question now, is how will China respond.\

From one perspective, the length of time that it took Washington to make the decision to send the USS Lassen near Subi and Mischief Reefs itself is an admission that the Obama Administration remains wary of provoking China. Months of public comments by officials from the president on down resulted in no action until last week, and even then, it was but a lone U.S. destroyer sent to transit what until a few months ago had always been considered international waters. Even worse, claims that the destroyer engaged simply in “innocent passage” as opposed to any legally-allowed military activity on the high-seas further undermines the administration’s argument that it is not tacitly conceding China’s territorial claims.

From another angle, though, the sail-through was an acknowledgment that U.S. policy has failed. China has successfully built and militarized islands on what were formerly shallow reefs, and in doing so far dwarfed the efforts of other claimants in the disputed Spratlys. More pertinently, it has changed the “facts on the ground,” and created for itself power projection bases that greatly extend the reach of the Chinese military.

This is significant because no other nation makes claims nearly as expansive as China does, nor does any other nation have either as many territorial disputes or fields a military that it increasingly active in the region. China is qualitatively different, not just quantitatively, from its neighbors, and its policy of building militarized outposts astride the world’s most heavily-trafficked waterways must be understood as a potential threat to freedom of navigation and the maintenance of peace in Asia. By acquiescing in the existence of these outposts, the region accepts a greater degree of risk today than it did five years ago.

In many ways, the struggle over the Spratlys is less about the United States and China, than it is about China and its neighbors. Few observers expect Washington entirely to abandon its allies, reduce its presence, and alter its maritime operations. It is almost certain, moreover, that the next U.S. president will act with more firmness than the current one.

Yet China’s goal in the short-run is not to get the U.S. Navy to stop transiting the South China Sea. Rather, it is to alter the behavior of its neighbors and force the other claimants in the Spratlys to de facto surrender their positions. Such an achievement would both give China the dominant military position in the region, and also wind up isolating the Americans. After all, if other nations have given up trying to prevent China from altering the balance of power, then how can the United States act alone?

Thus, the assertion by the U.S. official above that Washington is just beginning its policy of pushing back against China. Freedom of navigation operations are as much about politics as they are about military maneuvers. Proving to allies such as the Philippines and potential partners such as Vietnam or Malaysia that the U.S. is serious about upholding international law and preserving the rules-based order that underpins Asian trade, is a crucial step to ensuring that China does not browbeat its neighbors into submission.

That is one reason that Washington needs to operate more with its allies and partners, and should conduct any future demonstrations with other nations who also feel threatened by China’s actions.

And what about increased risk, now that U.S. Pacific Command seems set on further operations? China angrily denounced the U.S. sail-through, and stated that in the future it would seek to prevent such actions. There is indeed a greater chance of an accident or skirmish between China and the United States. Both sides have ratcheted up their rhetoric to the point where even the attempt to peacefully resolve the situation can be interpreted as backing down.

Just as vexing will be “gray zone” situations. U.S. planners must prepare for a scenario where dozens of “private” Chinese fishing vessels seek to impede the safe passage of U.S. ships. Will the U.S. Navy run the risk of damaging or sinking ostensibly civilian vessels, no matter how dangerous to safe navigation?

The proof will be in the pudding. Either the U.S. Navy goes back into contested waters or it doesn’t. And either China tries to stop it or not. With the world watching, it will be very clear just who has the greater will.

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