What Is The TPP?

Leaders of TPP member states

Leaders of TPP member states

What is the TPP? The Trans-Pacific Partnership (TPP) is various things, including a secretive trade agreement with overtones of foreign policy that is stalled but not dead. The agreement is being hammered out among twelve Pacific Rim nations. From what is known about the agreement, it appears to be Corporatist in nature and likely to lead to US job loss like the North American Free Trade Agreement (NAFTA) did before it.

Secretive

The Trans-Pacific Partnership is being negotiated in unprecedented secrecy. Even Congress has been kept in the dark. Apart from the negotiators themselves, the only group with knowledge of and input to the negotiations is representatives of big business. This makes the whole affair smack of Corporatism. Indeed, the New York Times reports that corporate interests are seeking advantages through the trade agreement that would be significantly more difficult to obtain through domestic legislation.

President Obama also requested “Fast Track” (trade promotion) authorization for TPP. This would limit Congress to an up-or-down vote on the agreement, and preclude hearings on its provisions. This makes for a double whammy: a trade pact negotiated in secret to be passed without debate.

The secrecy and request for Fast Track authority, which are deemed essential to the success of the negotiations, have caused fear. This fear has raised resistance. According to Sutton, the push-back “comes thanks in large part to (people) around the world contacting their lawmakers and asking them to question and oppose TPP’s secretive corporate-driven agenda.” A group called Stop the Secrecy is collecting petition signatures in opposition to the secrecy and projecting the count on key buildings in Washington, DC. The Electronic Frontier Foundation sites the lack of transparency as one of two main reasons for their opposition to the TPP. The New York Times, while cautiously optimistic about the pact, concedes that “(b)y keeping secret so much information about trade negotiations, which have ceased to be purely about trade matters like tariffs and quotas, the government has made itself a target for criticism.”

Trade Agreement

The Trans-Pacific Partnership would be the “largest free trade agreement in American history.” It involves the countries of Vietnam, Malaysia, Japan, Australia, Canada, Mexico, Singapore, New Zealand, Chile, Peru and Brunei. These economies account for 40% of the world’s GDP growth.

The TPP could benefit US interests. It is hard to pass verdict on something one knows so little about. Potential benefits listed by the New York Times are the reduction of “abuses like sweatshop labor, currency manipulation and the senseless destruction of forests. (It) could weaken protectionism against American goods and services in countries like Japan, which have sheltered such industries as agriculture and automobiles.” Dutta writes in Washington Council on International Trade, “The trade (deal) would…enable manufacturers and retailers to improve the efficiency of their global supply chains, creating jobs here at home and empowering consumers with a wider variety of choice in the marketplace and lower cost of living.” Talton, writing for the Seattle Times adds, “An assessment by the nonpartisan Congressional Research Service said the TPP could achieve many American goals: Not just opening markets, but harmonizing trade agreements, drawing in new participants and holding them to higher standards than those of the World Trade Organization.”

For the potential benefits of the Trans-Pacific Partnership, there are potential problems. The TPP is often compared, derogatorily, to NAFTA, the North American Free Trade Agreement between the US, Canada and Mexico. The TPP is called “NAFTA on steroids.” Wallach at Huffington Post observes, “The thing is that economists of all stripes agree that U.S. trade policy has been one of the major contributors to growing U.S. income inequality.” She continues, “This follows on the recent 20th anniversary of NAFTA, which fueled an explosion of the U.S. trade deficit with Mexico and Canada to $181 billion by 2012, resulting in a net American loss of one million jobs.” Talton notes that “Fast track, used in NAFTA and other agreements, has not brought down the trade deficit. Its results have been part of a massive loss of jobs to offshoring and arguably unfair trade practices, such as currency manipulation, that the TPP would not address.”

Foreign Policy

In addition to being a trade agreement among the participating nations, the Trans-Pacific Partnership is very much about China, which is excluded from the pact. Talton writes the “TPP would draw China’s rivals in the region closer to the United States.” The Washington Post states, “China would be left on the sidelines, along with its mercantilist model of international commerce…The net effect would be a better balance of power, money and ideas between the United States and its allies on the one hand and China on the other.” How would China react to this? A Peterson Institute for International Economics assessment states, “If China views these agreements as economic war and containment by other means, and retaliates by concluding its own regional agreements, excluding the large traders, fragmentation and conflict could lie ahead.” The New York Times, in contrast, suggests the pact “could also encourage China, which is not part of the talks, to reconsider its currency and labor policies to avoid being at a disadvantage.”

Among member nations, the Trans-Pacific Partnership becomes an instrument of US hegemony. It would ensure that participating nations “conduct business according to U.S.-style rules on tariffs, regulation and intellectual property.”

Stalled

As of early May 2004, the Trans-Pacific Partnership negotiations appear to be at an effective standstill — at least until after the November elections. The Washington Post believes the key to the whole TPP deal is an agreement between the US and Japan. These are the two biggest economies in the pact, and have historically had very disparate approaches to trade. Spicer reports that during President Obama’s recent trip to Asia (22 April – 29 April 2014) progress was made, but “a gap remains and effort is needed to come to a final compromise.” Meanwhile, Gallagher warns, “Despite President Barack Obama’s charm offensive in the region, Pacific nations are well-advised to remain wary of the U.S. government’s position on the Trans-Pacific Partnership agreement. If U.S. trade negotiators got their way, the Pacific Rim would reap surprisingly few gains — while taking on big risk.”

Also important to final agreement among the participating nations is Fast Track authorization in the US. Other nations are reluctant to come to an agreement only to have it rewritten by the US Congress. The Fast Track would limit Congress to a yea or nay vote, with no ability to make changes. President Obama asked for this authority in his State of the Union address (28 January 2014), but Congress has not agreed to this approach.

The Trans-Pacific Partnership is a super secret trade agreement. Some argue that the secrecy is necessary for the success of the negotiations, but the secrecy also raises concern and opposition among the public and Congress. One breach of secrecy is the access given to big business. This suggests the pact will be Corporatist in nature. Leaked documents regarding Intellectual Property, Finance and the Environment support this theory. The TPP is stalled at the moment, and faces obstacles going forward. However, there is still effort being made to reach a final agreement. It is important to remain vigilant. It is possible the TPP will be a good thing for the US and partner nations, but it seams more likely that it will only be good for the corporatist elite.

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