The Trans-Pacific Partnership is a trade agreement between the Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam, all countries located within the Pacific Rim. The partnership was originally launched by Brunei, Chile, Singapore and New Zealand in 2005; the United States did not join the trade talks until Obama’s presidency took off in 2008. However, the creation of the agreement was kept secret until its release to the public in 2013.
The TPP was brought to public eyes, being described as a way for the Unites States to “[write] the rules for global trade–rules that will help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen the American Middle Class.” (Trans-Pacific Partnership) The TPP is of great importance to the United States, because its member countries comprise “roughly 40% of global GDP and one-third of world trade.” (Granville) Like it did when creating NAFTA, the USA joined the TPP with the hopes of improving foreign relations between the member states as well as increase the national and global economy; something that many see controversial. The TPP was signed in January 2016; since then, however, the USA has been stuck in a debate of whether the TPP should be ratified and implemented or not. Some see the TPP as a crucial strategic move to pivot USA foreign relations toward Asia, while others believe that the TPP has numerous clauses that would not be beneficial for the US economy. Although the TPP has not yet been ratified, and many politicians do not wish to do so, the TPP’s policies will do more good than harm to the United States’ economy, making its ratification in the upcoming months crucial.
The White House joined the TPP, during President Obama’s first term in office, as a key way of balancing China in the Asia Pacific region. In light of the United States’ lack of involvement in Asia during the previous years, Asian countries’ support of China’s economic rise has increased. Because of this, as well as China’s geographic position, joining the Trans-Pacific Partnership as a strategic move by the United States government should be respected. As soon as Obama won the elections, he wished to become actively involved in Trans-Pacific Partnership negotiations, insinuating that this was the best way to reposition the United States as a major superpower in the Asia Pacific region. As stated by Tom Donilon, the Transpacific Partnership “entails strengthening alliances and partnerships, building an economic architecture that can sustain Asia’s growing prosperity, supporting democratic reforms and maintaining productive relations with China” (Donilon). Joining the TPP is not only a way for the United States to reposition itself as a major super power of the world, but will also be a main strategic move to “write the rules that will govern the global economy for the next century” (Donilon). This shows that it is of great importance for the United States to recognize and ratify the TPP to strengthen not only the US economy, but also US foreign relations with Asia.
Writing the rules of economic integrity in the Asia Pacific region is crucial when talking about to the United States’ prosperity in the future. One problematic aspect of the TPP is that it is often seen as a parallel to NAFTA, a trade agreement between USA, Mexico and Canada signed in 1994. NAFTA was projected to be extremely successful and proved itself right when it was first ratified. However, as a report of NAFTA from Public Citizen states, “millions have suffered job loss, wage stagnation, and economic instability from NAFTA” (McBride). These were the negative impacts that NAFTA had in US during the long-run. Since so many Americans believe that the TPP is of the same nature as NAFTA, and a multitude of Americans believe that the results of the TPP will be the same as those of NAFTA, many fear to support the agreement. However, a report stated that ratifying the TPP would “increase real incomes by $131 billion annually, or 0.5 percent of gross domestic product, which is the measure of the country’s total economic output. Exports would increase $357 billion, or 9.1 percent above previous projections by 2030” (Calmes). Seeing as this study along with others project the TPP to have an outstanding impact in the US economy, it is evident that ratifying the TPP and implementing its policies in the months to come should be a main priority of the United States Senate.
The TPP will, in fact, have a positive effect on the United States, like the World Trade Organization (WTO) did when created. The Trans-Pacific Partnership builds on other Trade Agreements that the United States has already signed to make sure that it doesn’t contradict the stance that the state has previously taken on trade talks. These previous trade agreements, which include WTO, have already proven to be good for the United States, so the creation of another trade partnership that encompasses different countries as well as a number of different and improved policies should be seen as beneficial. As stated by the Washington Post, the “TPP ‘incorporates’ key articles from the WTO… to avoid creating a parallel (and potentially contradictory) body of case law on these issues” (Marc Bush). The TPP was created specifically with the hopes of expanding and improving clauses on other trade agreements. Because it is building upon previously successful agreements, this should depict the TPP as a legitimate, trustworthy partnership deserving of prompt ratification.
Although Obama’s team truly believes that the TPP will create positive gains to the United States and its citizens, that is not the most common sentiment of the rest of the American politicians. In fact, many disagree with the TPP because they believe that its beneficiaries will be the Asian member-states at the cost of the United States well-being. Those who are against the Trans-Pacific Partnership do not realize that its goal is to create standards that will help not only the United States but also Pacific Rim nations that lack laws and regulations which are included in the TPP and designed to create prosperous trade. Although some of the clauses and chapters in the TPP are not necessarily needed in the United States, they will create great change in the other member states, easing trade between the member states and the United States. It is true that trade agreements are usually more beneficial for developing countries than for already developed and economically prosperous countries. However, those who believe that the TPP favors Pacific Rim member states, should take into account that “the Asia-Pacific region will continue its economic integration, with or without the United States” If involved in the agreement, the United States will have more opportunities for improvement and economic ties with a region of the world that will see the most economic growth in the years to come. Furthermore, it is of outmost importance to take into account that as Obama stated, “when fewer people suffer in poverty, when our trading partners flourish and when we bind our economy closer to others in a strategically important region, America is both stronger and safer” (Obama). Becoming part of the TPP and “helping build a regional economic architecture that can sustain shared prosperity” (Donilon) will be one the the United States’ best deliberate action plans possible. Helping other nations grow and become more stable both socially and economically will have a second hand effect on the United States that even if not seen today, will be felt in the years to come.
Although the TPP will have positive effects on the US economy, it is still met with a lot of push back from many politicians. The Presidential Elections and campaign period, specifically, had a very detrimental impact on the possible ratification of the TPP. Neither Secretary of State Hillary Clinton nor President Elect Donald Trump see the TPP as good policy reform—displayed during their Presidential Campaigns, where they both voiced skepticism against the agreement. Although Hillary Clinton positioned herself against the TPP during election season, she previously showed her support for the Trans-Pacific Partnership. When in a meeting with Japanese Foreign Minister in 2013, she stated that the TPP “holds out great economic opportunities to all participating nations” (Tapper). However, two years later, during her political campaign, she did everything possible to reverse her endorsement of the TPP noting in an interview with PBS that, “[she is] not in favor of what [she has] learned about it” (PBS). Like Secretary of State Clinton, President Elect Donald Trump, stated during his campaign that the TPP is “one of the worst deals ever made” (Fifield). As the Washington Post stated, “both candidates are really talking about the 21st century TPP agreement in 19th century language. Its complexity is a sign of the times” (Marc Bush). Seeing as they stand on opposite ends of the republican and democratic spectrums, and both agree that the United States should not ratify the TPP, their statements have had a major impact on public opinion. The statements made by the two presidential candidates have had the most detrimental effect on the public eye. Considering the influence that both Secretary Clinton and President Trump have on American Citizens, it is crucial to examine the TPP meticulously to understand whether it will actually benefit americans.
Like President-Elect Trump and Secretary of State Clinton, Senator Warren, Senator McConnell and Congresswoman DeLauro, among others, have also clearly stated that they do not agree with the TPP as it stands today. In a Boston Globe article, Warren specifically dictated that she does not agree with the majority of the TPP, claiming that “only five of the 29 chapters reportedly deal with traditional trade issues” (Elizabeth Warren). Although she might be right in saying that few chapters specifically talk about trade, she must realize that the rest of the chapters impact trade in one form or another. The most controversial chapter of the Trans-Pacific Partnership, called The Investor-State Dispute Settlement (ISDS), discusses the rights of companies to sue countries with hopes of changing laws and regulations to favor their own business agenda. As described by Senator Warren, “the ISDS would allow foreign companies to challenge U.S. laws — and potentially to pick up high payouts from taxpayers… it could lead to gigantic fines, but it wouldn’t employ independent judges” (Warren). If this clause is included in the final draft of the TPP, International corporations wouldn’t have to go to US court, instead they could use a foreign court that could potentially allow companies act against the sovereignty of each state. This, in the eyes of Senator Warren and Congresswoman DeLauro, is the most problematic clause of the TPP.
In response to the comments made by Democrats and Republicans, and in an attempt to obtain their support, the Obama administration explained that they amended the ISDS clause. Obama refuted Senator Warren’s statements as pointed in a New York Times article, “the trade agreement actually reformed the so-called Investor-State Dispute Settlement tribunals, which are a longstanding feature of trade policy. It called for changes responding to criticisms that the tribunals favor corporations and interfere with nations’ efforts to protect public health and safety.” (Calmes). Furthermore, the ISDS will protect foreign investment by American business, no matter how small or big; “ISDS ensures that a wide range of American businesses — including small businesses — are protected against unfair discrimination when investing abroad” (Trans-Pacific Partnership). Moreover, it is crucial to note that the ISDS clause is included in almost every trade agreement that the United States is a part of, and the “U.S. has never lost an ISDS case” (Trans-Pacific Parternship). The United States has proven to be immune to these cases, serving as enough proof for Senator Warren, Congresswoman DeLauro and their supporters. Hence, making it clear that the ISDS clause should not be feared by Americans and politicians when thinking about the ratification of the TPP.
The ISDS clause is not the only one creating questions among the public. The Trans-Pacific Partnership has also met pushback because it does not include protection against currency manipulation, as well as Chapter 18 which relates to ‘Intellectual Property.’ Along Sen. Warren, other democrats and companies like the Ford Motor Company, believe that the TPP should not be ratified because it does not include “enforceable protections against other countries’ manipulation of their currency’s value to gain price advantages for their products also view.” (Calmes). Shockingly enough, businessmen and multinational corporations have found their own issues with the trade agreement. Republicans had objections from “intellectual-property provisions that would have limited monopoly protections for brand-name pharmaceutical companies’ biologics” (Calmes). If approved, the TPP would strengthen and, in doing so, be more strict on intellectual-property rights. This would create problems with companies that produce low cost pharmaceuticals in the United States; however it would have a positive impact on Asian countries that at this point in time do not have strong laws against copyrights and property-rights. Accessibility to technology in Pacific Rim State has eased their ability to ignore intellectual-property rights and its profitability has become and incentive that must be stalled. Revealing the importance for the United States to be part of the TPP. As previously stated, although this clause might not help Americans who want low cost pharmaceuticals and objects which through the TPP will be protected by property rights, this clause will have a noticeable impact in Asian countries, in turn positively impacting the United States economy.
Unfortunately, the Trans-Pacific Partnership is coming close to its end. Politicians have decided that its ratification will not be happening anytime soon, as Senator Schumer stated on Thursday, the “Trans-Pacific Partnership… would not be approved by Congress” (Calmes). Politicians who disagree with the Trans-Pacific Partnership and want to amend it cannot do so because ‘Fast-Track Authority’ was reestablished specifically for this agreement. Fast-Track Authority allows the President to undergo trade negotiations and move the final draft straight to Congress for “an up or down vote on the entire agreement” (Frankel). The problem arose when the Obama Administration got Fast-Track Authority on the Trans-Pacific Partnership. It is understandable that some wish to change or amend clauses like the ISDS and the ‘Intellectual Property Protections” among others. The only problem, is that because TPA was passed, Congress is not allowed to make amendments to the agreement. If given the opportunity, most of the politicians who believe that the TPP will not have a positive effect on the United States because of certain clauses, if given the chance would most likely amend the agreement and eventually vote in favor of its ratification. Unfortunately, the approval of Fast-Track Authority, which Obama though would have a positive impact on the agreement of the TPP, as well as expedite its ratification, has proven to have a detrimental effect as seen by the remarks by Senator Shumor mentioned above.
In light of the events that have unfolded since the Presidential Elections, the Obama administration is doing its best in showing that the TPP will have a positive impact in the United States. They are doing so because “not sealing a TPP accord would leave a vacuum that China would rush to fill, setting its own presumably lower standards in the region” (Nakamura). Clearly, the United States is in too deep, and removing itself from the trade talks would show weakness, hence displaying a careless stance regarding world order and obtaining a weal position in the world’s international affairs. After seeing the possible outcome of the TPP agreement in the US, the other member countries of the TPP began to prepare themselves for the United States’ to fail in the ratification of the agreement. Politicians of the Pacific Rim states have already met in Peru and are “seeking progress toward an emerging alternative to the Trans-Pacific Partnership — the Regional Comprehensive Economic Partnership, known as R.C.E.P., which includes China, Japan and 14 other Asian countries but excludes the United States” (Calmes.) This should be more concerning than the alternative impact that ratifying the TPP would have on the US economy. The creation of another trade-agreement, one that excludes US involvement, would generate a bigger loss for the United States. As explained by Kevin Koster, the Vice President of the National Cattlemen’s Beef Association, “‘we are experiencing lost sales without T.P.P.’ ‘Multiply that over several hundred more products and several dozen more free-trade relationships,’” (Calmes.) said Michael Froman, a lawyer and U.S. Trade Representative, in an interview. This will be a truly devastating result of the failure to ratify the TPP. This is what US officials should consider when voting for the Trans-Pacific Partnership in the upcoming months. Because even if as it stands right now the TPP is not the best, failing to ratify it will be even more detrimental.
In light of the United States’ presidential election results, the TPP is more likely to be reversed and fail than for it to be ratified. Therefore, it would be of outmost importance for future President of the United States Donald Trump, to clear the water with the TPP member states and show them that the United States’ failure to pass TPP doesn’t reflect US wishes to stall its foreign relations with them. Although not ratifying the TPP will show otherwise, at least the US will be making an effort to portray its wish to make amends and possibly work on a different trade agreement. Preferably, however, instead of absolutely canceling the TPP talks, President Trump reverses the ‘Fast-Track Authority’ allowing the Senate to make amendments and eventually ratify the TPP. If this is done and Senators are able to come together to amend the TPP and eventually, in the near future, ratify it, the United States will not be completely lost in the Pacific Ocean world.
If the US is able to ratify the TPP, and reposition itself in the eyes of the world as a main economic player in all major geographical areas, it will see a great economic advantage and increase. In return, the United States will once again play the role of a hegemonic power in the world and the competition arising from China will be diminished, clearly improving US economy, power and global dominance.