In a meeting last week, the leaders of the United States, Mexico, and Canada got together and discussed various issues surrounding their own countries, including forming new trade agreements to open up more trade across the globe. These three countries entered into their own agreement 20 years ago when they signed the North American Free Trade Agreement (NAFTA), which was a significant step for regional trade in the Western Hemisphere. Now, these three countries hope that they can use NAFTA as a springboard to form new agreements with other countries in an attempt to find new markets and diversify their own economies.
At the heart of these trade talks was the potential transformation of the Trans-Pacific Partnership (TPP). The TPP currently is a trade agreement between Brunei, Chile, New Zealand, and Singapore, but there have been talks in the past few years of expanding the partnership to include many more countries along the Pacific, including Japan, Australia, Malaysia, and Vietnam. NAFTA members are excited about the potential trade increases that TPP would bring, and all three country’s leaders expressed hope that a deal could be signed by the end of this year.
The impact of the TPP could be rather significant on the global economy, as the agreement would open up and increase trade between countries that might not have traded as much before. The pact could also bring about closer ties between NAFTA members and the Asian Pacific, with some seeing this pact as a way for North America, and specifically the US, to combat China and its booming economy. These closer ties would give the United States greater influence in China’s backyard, something US officials would be very happy about. The agreement would also be a victory for free trade, as the pact expands upon NAFTA and the principles behind it. This freeing of trade between North America and the Pacific could be a boom to the countries involved, opening new opportunities for trade and investment.