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The Trans-Pacific Partnership (TPP) has been a largely controversial topic from the day discussions began. As the largest regional trade agreement in history, the agreement would set new terms for trade and business between the U.S., Canada, Mexico, Australia, and numerous other Pacific Rim countries. As a whole, this group of member countries is responsible for nearly one-third of world trade. Needing the approval of Congress, the TPP has become a topic of discussion in the 2016 U.S. presidential election. While the nominees of both major parties are both against the agreement currently, there are a number of reasons why dropping the partnership all together may not be the best idea.
In an analysis conducted by the U.S. International Trade Commission, the TPP was estimated to potentially increase gross domestic product (GDP) by $42.7 billion, and they expect 128,000 more full-time jobs as a result. Critics are worried that while the ideal goal is to promote economic development and stability, like NAFTA, economic crises could stem such as the one that happened in Mexico just a few months after the agreement was entered into force. NAFTA is also attributed as the main cause for the loss in manufacturing jobs in the U.S. Still, there are numerous benefits of NAFTA, such as the modernization of the Mexican economy, which provided workers with jobs after exiting the agriculture industry.
Despite the somewhat muddled history of NAFTA, the TPP is improved in terms of better looking out for the interests of workers. According to Nicholas Lardy, a China expert at the Peterson Institute for International Economics, the TPP “offers a higher standard with more protections” for American companies and their workers. Additionally, the deal would allow North American countries to commit to the Asian region and make an effort to improve the entire region’s economic integration. Cornell trade expert Mr. Prasad stated simply that if the TPP were to stop, “it would be a blow to U.S. influence and credibility more broadly. If the United States can’t deliver, it’s going to hurt legitimacy and credibility.”
NAFTA would also be strengthened with the help of countries such as Japan, Malaysia, and Vietnam. The TPP is written in a manner that will ease adoption by other nations in the future, in order to avoid faltering trade deals such as the Doha round. Some other well-known strengths of the deal include its elimination of 18,000 taxes on American goods, boosted exports among member countries, strengthened governance, ensured fair competition with state-owned enterprises, and promoting digital trade. Aside from these economic strengths, the TPP also plans to make strides in human rights including protecting workers, preserving the environment, and ensuring food safety. To learn more about the TPP and what it entails, please view our TPP trade bloc page.
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