TPP: The Largest Asia-Pacific Trade Agreement That Nobody Knows About
President Joko Widodo of Indonesia recently (as in, this Monday) said on a visit to the White House that his country would join the Trans-Pacific Partnership. Many view this as a foreign-policy win for President Obama, who has been laboring away constructing what will be the largest-of-its-kind trade network in the Asia-Pacific . One could say that the Trans-Pacific Partnership, TPP for short, was born out the America’s aspirations to balance China’s projected power and economic dominance in the Asia-Pacific region. The agreement was finalized among its current 12 member countries earlier this month, and in my opinion will probably be the most important foreign policy achievement Obama has delivered during his presidency. Ironically, it also seems to be the least well-known. Imagine for a moment the answers you would get if you went on to the street with a camera crew and asked people “What is the TPP?”. What would you have said?
The Trans-Pacific Partnership has been in negotiations for almost as long as Obama came into office. It currently has 12 member states: the United States, Singapore, Brunei, Chile, New Zealand, Australia, Peru, Vietnam, Malaysia, Mexico, Canada, and Japan. It is supposed to liberalize trade and strengthen economic ties between countries across the Pacific. The TPP finally came to fruition after 19 rounds of talks, as national leaders combed through massive sets of trade standards across almost all imaginable industries and policy-areas. If it gets ratified, it will undoubtedly unlock huge markets and opportunities for businesses within all member countries.
One of the key dilemmas leaders have had to face with opening up trade is the negative consequence it has on their nations’ less competitive industries. However, it seems like the recent political climate in Asia (namely, China) has prompted formerly reluctant nations to use preferential trade agreements as a political tool. For example, Japan and the US have, through the TPP, decided to open up their most highly protected industries (agricultural and auto industries). What’s interesting here is that much of the “opening up” in the TPP seems to encompass not reduction of tariffs, but limitations to regulatory practices imposed by governments to keep out foreign goods. The impetus for Pacific Rim nations to enter into regional trade agreement has everything to do with the both recent political struggles with China and, and this is just my opinion, uncertainty about its economic prospects as a dominant regional trade partner. The TPP, in this sense, is actually a very smart diplomatic maneuver to establish a system of liberal trade rules among some of China’s key trading partners in the region in an effort to both preclude China from dictating the terms of trade and also eventually forcing it to conform in order to stay in the loop.
Despite the TPP’s diplomatic and projected economic successes, the public (or the small portion of the public that knows what it is) clearly has mixed feelings about it. The entire process was kept largely under wraps, even until now, and has generated a lot of public suspicion. The agreement is said to touch on several contentious issues including quality regulation of food imports, intellectual property, and environmental regulation. Furthermore, Obama got fast-track authority for the agreement already, meaning it will be immune to amendments and filibusters. This has raised further concerns (much of the contents you will find on the internet will are criticisms of the TPP) among the public and fears that we are being dragged unknowingly into an international agreement that has regulatory implications.
If you are interested in learning more about the TPP, Wikileaks has been publishing sections of the agreement (including the infamous intellectual property chapter) that is worth examining. The next exciting step in the process that I certainly will be following is the TPP’s journey through Congress. After all, a treaty is just words on paper unless it is ratified. And that, as we all know, is the hardest part.