In light of this week's shocking vote in the U.K. to leave the European Union (known as "Brexit"), the Trans Pacific Partnership, or TPP, comes into sharp relief. While one developed economy votes to isolate itself from the world, will another?
Discussion has trended increasingly against the deal. But this view should be rejected. That's because the TPP will open new trade opportunities among the 12 countries, including the U.S., who signed the agreement on Feb. 4 in Auckland, New Zealand. Protectionist measures tend to stifle the global economy. Just watch what happens now that the UK has started down the protectionist path.
The TPP followed seven years of negotiations but has not yet entered into force. This agreement is comparable to the proposed Transatlantic Trade and Investment Partnership between the U.S. and European Union. China is not part of the TPP.
President Obama has supported TPP and other trade agreements as a cornerstone of his efforts to generate freer trade and to build a more inclusive world.
Yet populist forces in the U.S. and beyond have expanded over the past two years to oppose freer trade.
Concerned by weakness in economies worldwide and declining workforce participation, political leaders have adopted the populists' cause. They have spoken out against TPP and TTIP and introduced more protective trade measures.
The World Trade Organization (WTO) warned that this is would be detrimental to the economy.
In a recently released report, the WTO pointed out "that between mid-October of last year and mid-May of this year G20 economies introduced protectionist trade measures at the fastest pace since the 2008 financial crisis."
The WTO report said that "this trend coincided with a slowdown in global trade, now in its fifth year. Moreover, it was contributing to the persistent slow growth of the global economy."
Although this increase is, according to some economists, "far less substantial than that seen in the 1930s," its existence "is contributing to keeping the world in the economic doldrums."
The fear here is that rising levels of protectionism could cause economic problems similar to the 1930s when erecting trade barriers "contributed to making the (Great) Depression worse."
When disorder creeps into the economic relationships between nations, they withdraw from the world and turn in on themselves.
The concern is that current movements could become cumulative and exacerbate the difficulties that already exist.
This is the time when things should move in the opposite direction. Rather than embracing greater protectionism, people should support freer trade deals.
Closing off trade in the name of allegedly protecting jobs only reduces trade between nations, labor productivity and competitiveness.
This is where leadership becomes difficult.
Given the concerns and disorder that exist, people are inclined to jump to leaders that promise quick solutions.
While these types of solutions may provide relief in the short-run, they almost always result in greater pain in the long term.
This is an age in which information spreads easily and rapidly, cooperation and interaction are vital and greater trade and sharing increase prosperity.
The Great Depression provided us with evidence of what can happen when people close their doors and turn into themselves. We cannot let that happen again!
See full Brexit coverage here.