The Trans-Pacific Partnership, TPP, trade deal has been in
the making for years and is very controversial. It consists of the U.S., Japan,
Australia, Canada, Chile, Malaysia, Mexico, Singapore, Vietnam, New Zealand,
and Brunei. These 12 countries account for about 40% of the world’s economy.
The deal would essentially create a free trade zone around the Pacific,
including the lifting of tariffs and import quotas on products such as beef and
butter; however, this deal intentionally leaves out the world’s second largest
economy: China.
One hope for the TPP is that it will reduce China’s power in
the global market, which would give smaller countries an opportunity to take
their place in parts of the export market. In addition to U.S. hopes of slowing
or negating China’s recent rapid rise, the U.S. hopes that the deal will help
it to extend its influence in East Asia.
The deal is very controversial, and it was difficult for
President Obama to even try to negotiate the deal. Critics of the deal says
that TPP will cause unfair competition for U.S. made goods because it is
impossible to be more economically efficient than companies that use low-wage
workers overseas. A major opponent, the Economic Policy Institute, estimates
that a similar trade agreement, NAFTA, cost the U.S. 700,000 jobs in its
beginning 20 years, and TPP will do the same. Another point of criticism is
that allows foreign companies to challenge another nation’s laws that impact
them competing in their market. Critics say this will let companies from other
countries to nullify U.S. safety rules and regulations. Even Democrats are
afraid that the TPP will cost American manufacturing jobs and weaken
environmental laws.
While it has opposition, the deal also has its support. The
U.S. Chamber of Commerce says that 5 million U.S. jobs are connected to NAFTA,
thus concluding that TPP will increase exports and support domestic jobs. TPP
may also mean lower prices for consumer as and businesses. Economists argue
that free trade will ultimately improve a nation’s wealth at the cost of some
jobs being lost overseas. Most importantly, supporters emphasize the fact that
TPP will ensure that the U.S. has a presence in the growing East Asian markets.
If the deal is passed, it will be very important to Obama’s
legacy. However, it will be fiercely debated in Congress and also a topic of
discussion in the upcoming election. Some candidates including Donald Trump and
Ted Cruz have opposed it. Democrat Bernie Sanders sent out a tweet: “"In
the Senate, I will do all that I can to defeat the TPP agreement.” Hillary
Clinton has not spoken about it yet.
While it’s difficult to tell if TPP
will help or hurt American jobs as there is differing data, I do think it’s
important for the trade agreement to be passed, for it will aid in the curbing
of China, which is the second largest economy in the world and is quickly
growing. I also think it’s important for America to have a presence in the
region. It also will help to strengthen alliances with nations such as Japan
and potential allies such as Vietnam.
What do you think? Do you think the
deal will help or hurt America’s economy? Is it important for America to be
involved in the market in the Pacific or should we stay out of it? How will
this impact Obama’s legacy? How will this impact the election?
Sources:
6 comments:
On Monday the US Japan and 10 other Pacific nations reached their final agreement on the largest regional trade accord in history, now Obama must get approval from Congress which might prove to be rather difficult. This could be a big achievement for Obama because this would be drawing together 2/5 of the global economy. Obama believes that we must write the rules to the global economy and not let countries like China dictate it. This argument will be a main point as Obama tries to get the bill passed. Republican candidates, namely Trump, has made multiple statements against this deal. However, republicans are not the only ones that are speaking out against his agreement. There have been multiple statements from democrats opposing this treaty. I believe that there is too much opposition to this agreement from both democrats and republicans for it to be passed and it will most definitely be a hard fight for Obama to win as he leaves office.
http://www.nytimes.com/2015/10/06/business/trans-pacific-partnership-trade-deal-is-reached.html
I believe that there are currently too many opposing ideas in Congress about the Trans-Pacific Partnership, and that it will be difficult to solidify a plan that pleases most people. In fact, legislation in favor of planning the TPP passed narrowly through Congress last summer. Many are still unsure of the implications this deal will have on American workers and the exclusivity of biologic drugs. Though this will positively impact Obama’s legacy, and boost foreign policy, the presidential campaign will make it more difficult for Obama to sell the deal; it could carry on to the next administration. However, I agree that the TPP would be helpful in hindering China’s massive role in the global economy and keep them from running it on their own standards. It could also create useful military and economic ties between the 11 countries participating in the deal. I don’t know what the repercussions could be for US workers, but as consumers, this deal will definitely make costs more competitive. In addition, the TPP could benefit more than just Americans. From this plan, the US has more power to pressurize developing nations into bettering their labor practices. For example, they could require Vietnam to allow independent trade unions and Malaysia to decrease the amount of human trafficking. I definitely see the advantages of this deal, but I think it will take more to convince others to support a deal this large, and what Obama names “the strongest commitments on labor and the environment of any trade agreement in history.”
http://www.wsj.com/articles/u-s-reaches-trade-deal-with-11-pacific-nations-1444046867
Building off of the article I feel that there are many different pros and cons to the Trans-Pacific Partnership. In looking at the cons first there definitely is the potential for the U.S. to get the short end of the stick. By trading with these other countries, many of which are able to produce goods at significantly lower costs than here in the U.S., U.S. goods could stand to suffer by not being able to have a competitive edge in the marketplace. Which could only further stand to worsen our current economic situation here in America. Furthermore there has been the past trade agreement, the North America Free Trade Agreement (NAFTA), that did not see the best results, specifically the lost of hundreds of thousands of jobs at the beginning. Therefore at this point in time, when many are still unemployed and searching for work, a new trade agreement of such nature may not be the best decision. On the flip side however in looking long term the TPP may just help to bring the country in the direction it desperately needs to move in, one with a brighter economic future. In being involved in the TPP the U.S., as well as these other Pacific nations, will be able to curb China's extensive involvement in the world economy (so that it is not able to continue it's domination in the Pacific economy system). As a result this could allow the U.S. a chance to get more involved in the East Asian markets, which could then promote the development of more jobs and opportunities to trade, as well as help to develop other Eastern nation's economies. Overall though this issue is highly controversial and will require a lot more information and details to sway those in Congress to support this major deal - especially given the fact that Congress is only able to accept or reject it and not provide any amendments since it is under 'fast track' procedures for expediting trade agreements. As for the impact it will have on the election, several candidates such as Sanders and Trump have already spoken out against the deal, with Rubio expressing he was leaning more towards support. Of all the candidates Clinton is going to have the toughest call to make. She is trying to seek labor union endorsements, who are united against the deal, while at the same time trying to minimize the number of issues that she opposes Obama on so that she can keep his support. It will be interesting to see which way she ends up falling on the issue.
http://www.wsj.com/articles/trade-deal-throws-presidential-candidates-a-curveball-1444174712
It is always risky to get into deals with foreign countries when commerce is the main topic of discussion. There are so many laws and loopholes that companies find so they can make the most profit while losing the least, and allowing them to outsource production doesn't help our economy. Americans need jobs, and moving those jobs to other countries so minimum wage workers get them doesn't help the country. Also, using this deal to attack China indirectly will not help our relations with them to improve, even if they are threatening our economy. I think we should stay involved in the market in the Pacific, but I think our main focus should be to improve the economy within our fine borders.
It is always risky to get into deals with foreign countries when commerce is the main topic of discussion. There are so many laws and loopholes that companies find so they can make the most profit while losing the least, and allowing them to outsource production doesn't help our economy. Americans need jobs, and moving those jobs to other countries so minimum wage workers get them doesn't help the country. Also, using this deal to attack China indirectly will not help our relations with them to improve, even if they are threatening our economy. I think we should stay involved in the market in the Pacific, but I think our main focus should be to improve the economy within our fine borders. If this goes through and flops, it will tarnish Obama's legacy forever, and with such opposition, I don't think its a good risk to take.
What concerns me most about this deal is a the stark lack of transparency. We know negotiations have been going on for years at least while nothing has been released. This leads to a problem for voters; how can citizens vote for candidates that will represent their interests if they cannot take a stance on the issue due to lack of knowledge? A deal that will shape the future of Pacific trade should surely be given a high degree of transparency. We know a little bit about the deal, like how it is supposed to lower tariffs and add intellectual property protection to certain products like pharmaceuticals, but it is still unclear whether or not these claims are actually true. Hopefully this deal will increase the amount of manufacturing inside the U.S. while fostering a healthy relationship with Asian countries, but it is impossible to know. After NAFTA, a large portion of our manufacturing went to Mexico, a step that the entire legislature is hoping to avoid this time. Hopefully this deal will do just the opposite. The drafters of the bill have stated that they want to move the United States away from a service based economy and towards an even economy with manufacturing too.
http://www.theatlantic.com/business/archive/2015/10/trans-pacific-partnership-tpp-manufacturing/409591/
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