The Trans-Pacific Partnership: an international trade agreement you’ve likely never heard of
What is the Trans-Pacific Partnership Agreement?
The Trans-Pacific Partnership, or TPP, is an international free trade deal that is currently being negotiated by the United States and 11 other countries. The goal, in general, is to boost the economy and create new jobs by opening up new trade opportunities of goods and services through removal of trade barriers and reduction of tariff costs. However, there are several factors of the secret negotiations that are not quite as publicly promoted that have angered millions of workers and left others scratching their heads.
What you need to know
The TPP is the largest international free trade agreement to date, surpassing its predecessors NAFTA and CAFTA and incorporates more than 790 million people which represent 40 percent of the global economy.
The Good
The TPP will open new markets in Asia-Pacific countries (thus promoting jobs and growth), set high-
standard trade rules and address 21st century issues in the global economy. In 2013, the United States exported $622.5 billion of manufactured products to TPP countries. A decrease or elimination of TPP countries’ tariffs on those products would dramatically boost the U.S. economy and level the international playing field.
The Bad
The TPP is expected to expand the North American Free Trade Agreement “trade” pact model that led to a large U.S. trade deficit, significant job loss, a decrease in wages and new floods of agricultural imports.
“The TPP would give big polluters broad new rights to attack climate and clean air and water protection in a secret trade court, forcing our government to pay millions in tax payer dollars.”
-Sierra Club Executive Director Michael Brune
The TPP would allow multinational corporations to challenge laws such as the Country of Origin Labeling, which informs consumers about where various food products are raised or grown. This could expose citizens to unsafe food products.
The TPP also would allow pharmaceutical companies to develop stronger patents on drugs, as part of the intellectual property chapter. Although this will increase profits for a specific firm, it in turn, could take the cheaper, generic version of a drug off the market.
Nobel laureate in Economics from Columbia University disagreed with the premise that pharmaceutical companies need more money for research, although many claim this to be true:
“Pharmaceutical companies claim they need to charge high prices to fund their research and development. This just isn’t so. Drug companies spend more money on marketing and advertising than on new ideas.”
Impact on Ohio
According to TheTrade Partnership, the passing of the TPP into law will substantially improve Ohio’s economy. The regional agreement will provide Ohio with an opportunity to increase trade with five new free trade agreement members – Brunei, Japan, Malaysia, New Zealand and Vietnam – whom represent 249 million people and a combined economy of $6.4 trillion, potentially providing Ohio with a vast new market.
In 2012, Ohio exported $3.2 billion worth of goods and services to the “new FTA” members, but have
paid steep tariff prices. These tariffs and other trade barriers could be removed by the TPP.
However, Kent State University Assistant Economics Professor Dr. Jooyoun Park said she doubted Ohio will feel any positive impact, at least not in the short run.
“The biggest piece of this deal is adding Japanese parts to the market,” Park said. “This will affect Michigan and not so much Ohio because it [Ohio] focuses more on assembly.”
How does the TPP compare to the North American Free Trade Agreement (NAFTA)
The TPP has, by many, been called “NAFTA on steroids” likening the partnership to the North American Free Trade Agreement of 1994. Currently, the Obama Administration is pushing for the passage of the TPP to update the NAFTA-based trade model to cope with the latest market trends and technology advancement.
In June of 2012, a portion of the investment chapter of the TPP was leaked and revealed U.S. negotiators are pushing to expand NAFTA’s corporate tribunals, which have been used to attack domestic public interest laws, such rules passed by the Food and Drug Administration.
“You’ve seen was has happened to the working class,” U.S. Congressman Tim Ryan said at a town
meeting in Akron, Ohio. “And now the TPP wants to do more and threatens to do more damage.”
Communications Workers of America Administrative Director Frank Mathews agrees with Ryan 100 percent.
“The definition of insanity is doing the same thing over and over and expecting a different result,” Mathews said. [pullquote]”TPP will be NAFTA on steroids.”[/pullquote]
By the numbers
According to the Center for Automotive Research, the passing of TPP could result in the loss of 91,500 U.S. auto jobs to Japan and reduce the number of automobiles produced in the United States by 225,000.
Meanwhile, the textile industry expects nearly 522,000 jobs to be lost to Vietnam over an eight year period.
Already, major corporations have offshored an estimated 3.4 million U.S. service jobs including call center and IT positions. The TPP would permit any foreign firm to supply services to the U.S. without employing any U.S. workers and could thus encourage more outsourcing.
The Future
For now, the TPP remains on the negotiating block, and Park expects negotiations to continue for years and possibly make the agreement fade away.
Additional Videos
Former United States Secretary of Labor Robert Reich has served as a voice against the Trans-Pacific Partnership and has referred to it as a, “Fast track to the bottom.”
The United States is not the only one affected by the TPP. Australia has spoken out against its passage.
