Note: This is a topic explanation only. No analysis will be provided.
The Trans-Pacific Partnership (TPP) deal was passed this May, and proved very contentious upon its passage. It will surely be an issue in the election to come.
What is the TPP? Who is involved?
The TPP is arguably the most ambitious free-trade compact ever drafted. It will slash or eliminate tariffs, opening up trade, spurring economic growth, and vitalizing investment between member countries.
Proponents of the bill hail it as a way to unlock economic growth for partner nations, while critics blast the bill for the secrecy surrounding its negotiations and the possible effect it would have on domestic jobs.
The countries involved in TPP are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, the United States, Singapore and Vietnam. These partner countries seek to expand upon a previous trade agreement originally between Brunei, Chile, New Zealand, and Singapore.
Why does the TPP matter?
All members of the TPP are part of APEC (the Asia-Pacific Economic Co-Operation). Combined, their population exceeds 650 million people. The TPP could therefore turn this into a single market.
The TPP is seen by many as a power play spearheaded by the United States: trying to undermine China’s economic hold over the region. There is even speculation that other members of APEC will join the agreement. If this happens the implications would indeed be enormous: the APEC bloc accounts for around 40 percent of world trade.
Why is TPP so contentious?
Critics of the TPP claim that it’s reminiscent of Reagan’s NAFTA agreement. While the agreement indeed freed up trade in North America, it cost around one million American jobs. NAFTA also created trade deficits with Canada and Mexico, while surpluses had existed prior to the bill’s passage.
Further, many argue that the TPP subverted the democratic process: the negotiations, shrouded in secrecy, left Americans out of a decision that will undoubtedly have significant impact on their lives.