Trans-Pacific Partnership (TPP)

The Trans-Pacific Partnership (TPP) was a proposed trade agreement among a group of twelve nations with Pacific interests, of which the most prominent were the United States and Japan, the first- and second-largest economies, respectively, in the group. The TPP was a massive, complex, and highly detailed agreement, with thirty chapters and over five thousand pages. It built on a previous agreement among four of the powers, Singapore, Brunei, New Zealand, and Chile. The other nations that joined to create the TPP, in addition to the six already mentioned, were Australia, Canada, Malaysia, Mexico, Peru, and Vietnam.

The treaty was signed by representatives of the twelve nations on February 4, 2016, in Auckland, New Zealand. However, it would have only taken effect if it were ratified by all twelve countries—or, after two years, by six countries representing at least 85 percent of the combined gross domestic product (GDP) of the entire group. In order to reach this percentage, ratification by both the United States and Japan would have been necessary, although the agreement was controversial with wide segments of the public in both those countries. Passage of the TPP essentially stalled after January 23, 2017, when incoming US president Donald Trump signed a presidential memorandum withdrawing the United States from the treaty.

Brief History

Parties to the TPP included a wide range of economic regimes, from the state socialism of Vietnam to the corporate capitalism of the United States. The TPP would have superseded many of the provisions of the North American Free Trade Agreement (NAFTA) that links Mexico, the United States, and Canada. It was also expected to have a particularly strong impact on Japan, a country that has been reluctant to open its markets and commit to multilateral trade agreements.

The TPP was not conceived as limited to the original signatories but as expanding to include other countries in the region. Indonesia had taken steps to join. South Korea and the Philippines had also expressed interest in joining but had not made formal requests to join. The Philippines would have had to change its laws to eliminate restrictions on foreign ownership incompatible with TPP membership. South Korea’s economic diplomacy has emphasized bilateral agreements rather than multinational pacts such as the TPP, and some feared that joining TPP would harm South Korea’s relations with China. The government of Thailand was also planning to join. In Latin America, Colombia and Costa Rica had expressed interest.

American involvement in the treaty began in 2008, when then president George W. Bush announced that the United States was joining the negotiations, a policy continued under his successor, Barack Obama. In the United States, ratification of treaties is the work of the Senate. The TPP became a contentious issue in American politics, one of the few that cut across party lines. President Obama continued to strongly support it, seeing it as a key element in the diplomatic "pivot to Asia"; however, in order to go into effect, it would have had to be ratified by the Republican-dominated Congress, which was hostile to Obama and suspicious of international agreements. The Republican Senate did grant Obama "fast-track" authority over the agreement in 2015, meaning that the Senate would vote to either approve or disapprove the agreement but would not attempt to amend or filibuster it.

In the United States, opponents of the TPP claimed that it would lead to the loss of American jobs to low-wage countries and further exacerbate economic inequality. Labor unions opposed it, similarly fearing the loss of American jobs. The agreement was a major issue in the 2016 US presidential election campaign, with Democratic nominee Hillary Clinton reversing her long-held support for the TPP in the face of its unpopularity with many in the Democratic base. Trump, then the Republican nominee, also strongly opposed the TPP as part of his general criticism of trade deals, breaking with much of the Republican leadership.

Overview

The proposed TPP contained many standard elements of a modern trade agreement, including agreements to lower or eliminate tariffs and protect intellectual property. Some described the ultimate goal of the TPP as a single market following the model of the European Union. If this had happened, the original twelve countries would have constituted the largest market in the world even without other countries joining.

One of the most controversial elements of the TPP was the investor-state dispute settlement mechanism. This would have allowed private investors from one country to sue the government of another country for treaty violations that harmed the investors. The suits would have been resolved not in the courts of either country but in arbitration panels staffed by experts in trade law and operating outside the countries’ judicial systems. Their decisions would not have been subject to appeal. Critics said this system could have allowed governments to be sued for passing labor or environmental laws that harmed a foreign company’s profits, and was thus an infringement on state sovereignty. TPP proponents said states’ abilities to pass regulations were protected under the agreement as long as they did so in a fair and nondiscriminatory manner.

Another controversial area was intellectual property, in which respect the TPP reflected the hard-line views of the United States rather than those of other countries that supported looser intellectual property rules. For example, the TPP could have extended mandatory copyright protections to the life of the author plus seventy years, as in the United States, thus keeping popular works out of the public domain for decades.

The two largest economies in the agreement, the United States and Japan, were also reluctant to drop protections for their agricultural sectors. The secrecy with which the agreement was negotiated also attracted criticism, although this is typical for trade agreements.

The TPP was widely viewed as an attempt to construct an American-dominated trade alliance in the Asia-Pacific region as a counterweight to a rising China, part of the proclaimed American diplomatic project of a "pivot to Asia." Although the agreement was not a military alliance, both Japan and Vietnam have engaged in territorial disputes with China, and China and the United States view each other as strategic competitors. However, the Chinese leadership had not ruled out the possibility of joining TPP at a later time.

Immediately following US withdrawal from treaty negotiations in January 2017, officials from Australia and New Zealand said they hoped to rework the TPP by inviting China and other Asian countries to join in place of the United States. In April 2017, Japanese deputy prime minister Taro Aso said that Japan was planning to discuss "possibly starting an 11-member TPP without America." Another potentially viable alternative was the Regional Comprehensive Economic Partnership (RCEP), negotiations for which began in 2012 and were still ongoing as of 2017. The proposed RCEP would include the ten member states of the Association of Southeast Asian Nations (ASEAN) plus China, Japan, Australia, New Zealand, India, and South Korea.

Bibliography

Chappell, Bill. "Minus the US, Asian Economic Powers Meet to Form Trade Deal." The Two-Way, NPR, 27 Feb. 2017, www.npr.org/sections/thetwo-way/2017/02/27/517476947/minus-the-u-s-asian-economic-powers-meet-to-form-trade-deal. Accessed 20 Apr. 2017.

Chow, Peter C. Y., editor. The US Strategic Pivot to Asia and Cross-Strait Relations: Economic and Security Dynamics. Palgrave Macmillan, 2014.

DePillis, Lydia. "Everything You Need to Know about the Trans-Pacific Partnership." The Washington Post, 11 Dec. 2013, www.washingtonpost.com/news/wonk/wp/2013/12/11/everything-you-need-to-know-about-the-trans-pacific-partnership/. Accessed 7 Apr. 2017.

Gallo, Jenell, editor. Free Trade Agreements: Selected Analyses from NAFTA to the Trans-Pacific Partnership. Nova Publishers, 2014.

Greenfield, Charlotte, and Stanley White. "After US Exit, Asian Nations Try to Save TPP Trade Deal." Reuters, 24 Jan. 2017, www.reuters.com/article/us-usa-trump-asia-idUSKBN15800V. Accessed 20 Apr. 2017.

Jennings, Ralph. "Is Japan Reviving a Dead Pacific Rim Trade Deal to Spite China?" Forbes, 18 Apr. 2017, www.forbes.com/sites/ralphjennings/2017/04/18/with-trumps-back-turned-japan-is-seizing-a-new-chance-to-compete-with-china/. Accessed 20 Apr. 2017.

Kurtenbach, Elaine. "Japan Says Pacific Rim Pact Offers Best Trade Deals." AP News, Associated Press, 20 Apr. 2017, apnews.com/57e5db4ffd9445978beb0c9a195cc8ae. Accessed 20 Apr. 2017.

Lim, C. L., et al., editors. The Trans-Pacific Partnership: A Quest for a Twenty-First Century Trade Agreement. Cambridge UP, 2012.

Palit, Amitendu. The Trans-Pacific Partnership, China and India: Economic and Political Implications. Routledge, 2014.

"Text of the Trans-Pacific Partnership." New Zealand Ministry of Foreign Affairs and Trade, 13 Apr. 2016, www.mfat.govt.nz/en/about-us/who-we-are/treaties/trans-pacific-partnership-agreement-tpp/text-of-the-trans-pacific-partnership. Accessed 7 Apr. 2017.

"Trans-Pacific Partnership Agreement." Electronic Frontier Foundation, www.eff.org/issues/tpp. Accessed 7 Apr. 2017.

"TPP: What Is It and Why Does It Matter?" BBC News, BBC, 23 Jan. 2017, www.bbc.com/news/business-32498715. Accessed 7 Apr. 2017.