A Look at the Trans-Pacific Partnership
Some are betting that a Trans-Pacific Partnership in trade will result in the collective economic growth of the participants.
In recent years, the United States has led negotiations among Asian-Pacific nations in an effort to increase economic connectivity and expand trade benefits similar to those enjoyed under the North American Free Trade Agreement (NAFTA). A small group of nations began negotiating the Trans-Pacific Partnership in 2005, with the intent of having a concluded accord inked by all signatories by 2012. Disagreements between the participating nations in areas such as the protection of intellectual property and trade in agricultural products have delayed the Trans-Pacific Partnership negotiating process. As of 2014, twelve nations were party to ongoing negotiations. They include:
- New Zealand
- United States
The US Point of View
The Obama Administration makes the case that the Trans-Pacific Partnership has as its goal the boosting of economic growth for the US, as well as improving the pace and reliability of job creation and retention by increasing exports to a group of countries that includes some of the world’s strongest and fastest growing and robust economies. These markets already consume a wide range of US exports, from manufactured goods to agricultural commodities and products. According to Administration officials, the agreement is intended to bolster and to significantly expand these lucrative trade relationships even further.
What’s in it for Mexico?
Mexico first expressed interest in joining the Trans-Pacific Partnership (TPP) in late 2011. Mexico, as a member of the North American Free Trade Agreement (NAFTA), is already a strategic economic partner with many countries and markets, including the US. In fact, Mexico is the United States’ second largest export market, and involvement in this developing agreement would only strengthen Mexico’s economy and trade status further.
Why isn’t China at the negotiating table?
Many have noted that China has not yet been included in the negotiations, though that may of course change at some point. Currently, the TPP is seen as a way to open up trade in the Pacific region without having do business the China way. China is often criticized for what critics perceive as market manipulation, infringement on intellectual property, and stifling international investment. Though China’s government has expressed some interest in joining the partnership, many view this alliance as an alternative to China.
How will the TPP expand trade among signatory nations?
The primary benefit of this agreement will be the reduction or elimination of most tariffs, quotas, and other financial barriers among the member nations. This will have the effect of opening new markets and increasing trade in existing markets. For example, the US is hoping for tariff-free access to the Japanese agricultural market, and Japan is hoping for tariff-free access to the US automotive market.
Domestic Criticism in the United States
Not everyone is on board with the Trans-Pacific Partnership, however. Some labor unions in the US are afraid the agreement will mean more outsourcing of US jobs. Many of the critics of the Trans Pacific Partnership fear that key provisions of the accord are being drafted behind closed doors, without public or congressional input. US auto manufacturers believe that increased competition with Japanese product might hurt their business prospects, while some lawmakers in the US claim the agreement is too flexible and might be changed too easily once it is signed. While the primary objection in the US, however, is that the economic impact will be harmful for domestic production, supporters of the Trans-Pacific Partnership point to the successes of NAFTA in terms of increasing the overall volume of trade among the three North American partners in their effort to assure skeptics of the TPP of the future benefits that will be enjoyed by all parties to the agreement.