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Trans Pacific Partnership trade deal outcomes

Trans Pacific Partnership trade deal outcomes

Mexican edition Forbes Magazine commentators see Trans Pacific Partnership trade deal as a win for the US.

Now that negotiations connected to the execution of the Trans Pacific Partnership trade deal have concluded, a diversity of commentators and analysts are actively speculating what the practical implications of the accord will be if, and when, the national legislative bodies of the twelve signatory nations approve the treaty. In the opinion of Israel Pantaleon and Gerardo Villafranco, staff writers for the Mexican edition of Forbes Magazine, the big winner among the group of twelve nations will be the United States. Pantaleon and Villafranco assert that the US will greatly benefit from a functioning Trans Pacific Partnership trade deal in three critical ways:

The Trans Pacific Partnership (TPP) will result in geopolitical advantage for the United States

Although China has been making efforts recently to spread its economic and political influence in the US’ traditional Latin American backyard, an implemented Trans Pacific Partnership trade deal will play a critical role in enabling the United States to maintain and expand its dominance in China’s neighborhood in the Pacific Rim.

According to thoughts recently expressed by Pantaleon and Franco in Forbes Magazine, “although the Trans Pacific Partnership trade deal has commercial, economic and financial objectives” at the heart of the matter is a competition between the US and China for regional hegemony.”

China has not stood at a standstill in the face of this challenge to its regional clout. As a geopolitical countermove, during the month of July of 2014, it announced its plans for the Establishment of a China-Latin America Comprehensive Cooperation Partnership of Equality, Mutual Benefit and Common Development at a China-Latin American and Caribbean Summit that was held in Brasilia, Brazil’s capital city. Countries that sent top level representatives included:

  • Brazil
  • Colombia
  • Chile
  • Costa Rica
  • Cuba
  • Ecuador
  • Guyana
  • Mexico
  • Surinam
  • Uruguay
  • Venezuela

During the encounter Chinese officials proposed that Sino-Latin American relations should be maintained and expanded upon on the basis of four guiding principles:

  1. Sincere trust in the political arena;
  2. Win-win cooperation on issues of economic import
  3. Expanded citizen to citizen learning and interchange opportunities
  4. Mutual cooperation in the realm of international affairs and bilateral relations

Although China is making an active effort to become more of an impact player in what is America’s traditional “backyard” and geographic sphere of influence, a fully implemented Trans Pacific Partnership trade deal will involve countries that represent one third of China’s export markets. As China is not a part of the TPP, analysts believe that this will serve to diminish, or at least check, Chinese economic influence in the Pacific Rim.

The TPP will benefit US multinationals

According to the staff writers of the Mexican edition of Forbes, the Trans Pacific Partnership trade deal will produce positive outcomes for multinational firms headquartered in the United States.

From a Mexican perspective, Pantaleon and Franco point out that “of every 100 firms established in the country (Mexico), 50 are from the US, 33 are headquartered in other countries and 17 are Mexican.” This means that because US firms currently produce in and ship product from Mexico to countries that are participants in the TPP, existing trade flows will expand as a result of the provisions built into the Trans Pacific Partnership trade deal. This increase in commerce will ultimately serve to significantly benefit the US multinationals with a presence in Mexico.

The Trans Pacific Partnership trade deal will enable the United States to deepen its economic influence over more Pacific Rim nations

Forbes’ authors note that the TPP will provide the US with a “historic opportunity” to expand its trade relations and economic influence vis a vis countries such as:

New Zealand
Brunei
Malaysia
Vietnam

The accord will also set the stage that will enable the aforementioned countries to augment their economic exchange with the world’s largest consumer market. According to Pantaleon and Franco of Forbes, the increased competition for US import market share that will result from Trans Pacific Partnership trade deal will require that Mexico take steps to increase its economic competitiveness to retain its favored position as regards commerce with the US.

Read the primary source for this post in its original Spanish at Forbes Magazine Mexican Edition.

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