What Is the Trans-Pacific Partnership (TPP)?
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What Is the Trans-Pacific Partnership (TPP)?

5 Min.

The TPP was a free trade agreement proposal involving 12 economies around the Pacific Rim. It was proposed to reduce tariffs and trade barriers between twelve countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Back in 2015, Congress granted President Barack Obama the power to negotiate the deal quickly and put it up for a vote without amendments. In February 2016, all 12 nations involved signed the agreement. On January 23, 2017, Donald Trump, President at the time, signed a memo directing the U.S. trade representative to remove the U.S. from the agreement. Eventually, the eleven nations that were still involved came to an agreement on a slightly altered deal, which has been ratified by some of the nations.

Basics

The Trans-Pacific Partnership (TPP), initially including the United States among 12 Pacific Rim economies, was a proposed free trade agreement. In 2015, Congress granted President Barack Obama fast-track authority to negotiate the deal, leading to its signing in February 2016. However, Senate Majority Leader Mitch McConnell announced in August 2016 that the deal would not be voted on before President Obama's departure.

Despite the opposition to the deal by both presidential nominees, Donald Trump and Hillary Clinton, it was President Trump's election victory that solidified its demise. On January 23, 2017, Trump signed a memo instructing the U.S. trade representative to withdraw from the agreement and pursue bilateral negotiations instead. 

The Trans-Pacific Partnership (TPP) Explained

A trade agreement among 12 countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam, aimed to reduce tariffs and trade barriers. In the United States, the TPP was seen as part of the Obama administration's strategic shift toward East Asia. Secretary of State Hillary Clinton emphasized this in a 2011 Foreign Policy magazine article.

Clinton hailed the TPP as the benchmark for trade agreements, expressing her support. Her statement was likely prompted by a strong primary challenge from Senator Bernie Sanders. However, she later reversed her stance, opposing the deal. Donald Trump, Clinton's rival in the 2016 presidential campaign, also criticized the TPP and similar agreements. Trump's campaign focused extensively on NAFTA, signed into law by President Bill Clinton in 1993, as another trade deal he opposed.

Examining the Trade Deal Controversy

Criticism surrounding the TPP agreement revolved around various concerns. Detractors emphasized the lack of transparency during negotiations, deeming it undemocratic. Additionally, opponents argued that trade deals were responsible for foreign competition and the decline of American manufacturing jobs. Furthermore, the inclusion of the "investor-state dispute settlement" (ISDS) clause, enabling corporations to sue to violate governments, raised apprehensions among some.

Meanwhile, proponents of the deal emphasized its potential to open up new markets for domestic industries. They argued that TPP and similar agreements generate job opportunities and foster economic growth. Supporters further asserted that opposition to these deals was often rooted in partisan politics.

Exploring TPP Alternatives

After the United States' withdrawal from the TPP under former President Trump's directive, the remaining signatory nations engaged in discussions regarding potential alternatives.

One option was to proceed with the deal, excluding the United States. Australian Prime Minister Malcolm Turnbull discussed this possibility with leaders from Japan, New Zealand, and Singapore. However, a Japanese government official announced that their country would not pursue the agreement further. 

Given the substantial economic significance of the United States' participation in TPP negotiations, other countries likely found the trade-offs unappealing without access to the U.S. market. Eventually, the remaining eleven nations reached a revised agreement, which some countries have since ratified. 

Additionally, China advocated for the Regional Comprehensive Economic Partnership (RCEP), a multilateral trade deal involving 15 Asia-Pacific nations. This partnership aims to connect China with countries such as Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, India, Japan, South Korea, and New Zealand. On November 15, 2020, leaders from these nations officially signed the RCEP agreement. 

President Obama consistently stressed the urgency of finalizing the TPP, emphasizing the importance of not allowing countries like China to dictate global economic rules, stating, "We should write those rules." 

Subsequently, on March 8, 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was signed by Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam. The United Kingdom expressed interest in joining the CPTPP and commenced accession negotiations on February 1, 2021, following the agreement by the CPTPP Commission on June 2, 2021.

Conclusion

The Trans-Pacific Partnership was a proposed free trade agreement among 12 Pacific Rim economies, with the United States initially included. Despite its signing in 2016, the deal faced significant opposition from both Donald Trump and Hillary Clinton during the 2016 presidential campaign. Trump's presidency ultimately led to the United States' withdrawal from the agreement. The remaining 11 nations involved reached a revised deal, which has been ratified by some countries. The TPP's journey showcases the complexities and challenges of negotiating international trade agreements.

Trans-Pacific Partnership
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