Policy Spotlight: What is the TPP?

Yesterday, President-Elect Trump announced his 100-Day Plan via an online video, emphasizing his priorities to “put America first”. On his first day, Trump plans to issue an executive order to withdraw from the Trans-Pacific Partnership (TPP).

The Trans-Pacific Partnership is a trade deal signed on by President Obama that includes 12 nations and 40% of the world economy. According to the Pearson Institute for International Economics,the deal will produce annual income gains of $131 billion and boost annual exports by $357 billion by 2030. Under the agreement, more than 18,000 tariffs on US manufactured goods and agricultural products will be eliminated almost immediately, causing a huge increase in American exports. In addition, the TPP outlines enforceable labor and environmental protection standards, addresses the barriers to international trade that small and medium sized businesses face, introduces innovative rules to promote Internet-based commerce, and forces those that sign on to adopt anticorruption laws, regulations, amongst other measures to decrease conflicts of interest.

Sounds pretty good, right? So why are so many people upset about it?

Until about a year ago, the TPP was kept from the public and only 700 “cleared advisers”, mostly corporate lobbyists, were able to read it and make suggestions. This led to speculation about its intentions to help only corporate giants. Upon its release, it was heavily criticized for its establishment of “investor-state dispute settlements” (ISDS) which allow foreign companies to challenge a participating country’s laws before an international tribunal of judges. Environmental, health and human rights champions were appalled as they anticipated companies’ abuse of the ISDS process to challenge environment or labor regulations. They claim that this provision will jeopardize current or future standards and endanger residents, despite the TPP having the highest labor and environmental standards ever seen before in a trade deal. Meanwhile, Trump’s administration disapproves of the TPP, because they see free trade as a threat, pointing to manufacturing industry losses as a result of the North American Free Trade Agreement (NAFTA). Ultimately, they fail to understand that the TPP was drafted to acknowledge and strategically solve issues that surfaced in NAFTA.

Thus, the TPP is a far cry from Trump’s description as a “disaster for our country”. Adding to the American economy while holding certain countries accountable for inhumane labor conditions and unjust environmental practices, the TPP emphasizes America’s power in the world economy. As China was left intentionally out of the agreement, the TPP was meant to be a strategic step in affirming American leadership in Asia. Without America, the TPP is dead, but gigantic international trade agreements are not. In fact, China has two—the Regional Comprehensive Economic Partnership, which includes 16 countries and the Free Trade Area of the Asia Pacific, which is open to 21 countries. By not asserting American leadership, we are leaving that space open for another nation—China, Russia, who knows?

This “first-day” commitment is just the start of the damage to come in the Trump administration.

“Building walls to isolate ourselves from the global economy would only isolate us from the incredible opportunities it provides. America should write the rules. America should call the shots…The TPP would let America, not China, lead the way on global trade.” – Barack Obama

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