A tale of two trade deals: never mind Asia, time to pivot to Europe.

• Author: Prestowitz, Clyde

While Washington is consumed by political furor over how to get the federal budget deficit under control, strangely few people are talking about its troublesome twin sister. Unlike the budget deficit, the half-trillion-dollar U.S. trade deficit does nothing to stimulate the economy even in the short term. Rather, it is sucking jobs out of the country year in and year out while also raising doubts about America's ability to maintain its global security commitments. Taking sensible measures to reduce our chronic imbalance of trade would require neither austerity nor tax increases, and is the key both to creating jobs and to restoring confidence in America.

So what, you might ask, is the administration's policy on trade? Right now its primary focus is on a deal known as the Trans-Pacific Partnership, or TPP, which President Obama wants finished up by October. If concluded according to plan, the TPP will include the United States, Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, and Vietnam, with the possibility that Japan and Korea might also join. The treaty would also be open for other countries to join if they could meet the required standards.

Beyond this, as Obama announced in his State of the Union address, the White House is looking for a deal gazing in the opposite direction. Known as the Transatlantic Free Trade Agreement (TAFTA), it would tie the United States and the European Union into the world's largest trading block.

As with most trade deals, both the TPP and TAFTA have geopolitical as well as economic significance. Indeed, one reason the administration is placing strong priority on the TPP is because it sees the deal as an important part of its larger foreign-policy "pivot to Asia." With the rise of China and recent U.S. emphasis on Iraq, Afghanistan, and the Middle East, some Southeast Asian and East Asian countries have been looking for assurances that the U.S. will remain engaged in the region and provide a countervailing power. So along with stationing 2,500 Marines and increasing the U.S. naval presence in Australia, opening a drone base in the Cocos Islands, increasing naval visits to Singapore and other Asian ports, and raising the U.S. naval presence in the western Pacific to 60 percent of all U.S. ships, the administration is seeking special economic ties with the nations noted above--which, of course, do not include China.

A potential trade deal with Europe also has economic and geopolitical implications, but it has not yet generated the same level of expectation, commentary, and lobbying. This is partly because it is not as far advanced as the TPP, but it is also because few imagine that Europe will be a source of either major opportunities or major threats. Why place bets on an aging, stagnant Europe, goes the conventional thinking, when this is likely to be the century of Asia?

Yet the geopolitical case for the TPP is not nearly so strong as the administration argues, and the agreement is certainly not worth the cost the U.S. is likely to have to pay. Meanwhile, the economic case for forging closer trading ties with Europe is comparatively much stronger. It's time to look deeper at how these two trade deals fit into America's grand strategy.

In early 2011, Deputy National Security Advisor for International Economic Affairs Mike Froman invited me and a few other trade experts to the White House to request suggestions and support for the TPP.

Froman made two basic arguments. The first was geopolitical: the TPP, Froman explained, was the administration's way of demonstrating to our Asian friends and allies that we are back and committed to them. The second was economic: the deal would further open some important markets to American business, he argued, and, most importantly, would serve as a template for negotiating much broader and purer global free trade deals in the future.

To understand the administration's reasoning, it is necessary to have a little background. In 2001, the World Trade Organization (WTO), the 158-nation body that attempts to govern global trade, launched the so-called Doha Round (after Qatar's capital city, which hosted the launch meeting). The purpose of these negotiations was to achieve a dramatic increase in global trade liberalization. By 2008, however, the talks had gone nowhere and American frustration was at the boiling level.

In response, the Bush administration developed a theory of competing free trade agreements, or FTAs. The idea was that by concluding a series...