A Report on the TPP

INTRODUCTION

The tense discussions that have emerged from the announcement of the Trans-Pacific Partnership (TPP) in Oct. 2015 is a classic representation of the existential debate: Is globalism good for humanity? Deriving an answer to that puzzle is as difficult as attempting to understand the massive and complicated network of rules that is the TPP. However, what can be said about the TPP is that it is a regional trade agreement between the United States and 11 other Pacific Rim countries—making it the largest regional trade agreement ever (Calmes). If passed by the U.S. Congress, the deal will knock over more than 18,000 tariffs and other restrictions set up against the United States. The TPP will also allow respective countries to put in place new regulations concerning environmental and labor practices (Calmes).

PRESIDENT OBAMA’S CASE

In addition to its projected economic benefits and the strengthened diplomatic relations between the 12 countries, the TPP also promises to fulfill some strategic objectives – specifically to uphold the United States’ competitive edge against the expanding powers of the People’s Republic of China. For example: In May 2016, U.S. President Barack Obama authored a Washington Post opinion piece that cited China’s Regional Comprehensive Economic Partnership (the RCEP, which is another Pacific trade agreement). In the article, he contends that the RCEP is a far cry to the United States’ TPP, pointing out that the RCEP would not stop foreign governments from penalizing certain U.S. companies, nor would it protect U.S. intellectual property rights. “This agreement strengthens America’s economy,” writes President Obama. “The TPP brings together 12 countries representing nearly 40 percent of the global economy to make sure that private firms have a fair shot at competing against state-owned enterprises.”

International relations expert Parag Khanna reports in Politico magazine that without the TPP, the RCEP will push the U.S. economy to be more dependent on Asian capital, which will, in the end, prove more challenging for U.S. enterprises that want to broaden their businesses into Asia. The RCEP is not the only project that constitutes as a threat to U.S. or western influence. China has also founded the Asian Infrastructure and Investment Bank (AIIB), the Silk Road Fund, and co-founded the New Development Bank (formerly known as the BRICS Development Bank); all of these evolving associations position Asia in direct opposition to western organizations such as the International Monetary Fund (IMF) and World Bank Group (WBG) (Khanna).

A MATTER OF SECURITY

Another facet of the TPP that would qualify as an interest for the United States, at least according to supporters of the TPP, is that the trade deal will increase U.S. security. After Prime Minister Shinzo Abe announced that Japan would have a more active role in the development of the TPP during a joint press conference in Tokyo, President Obama emphasized the importance of “investing an international order” rooted in interdependence. The TPP intends to bring state-actors closer to each other for that very effect, and in doing so, President Obama hopes to create a global society that respects the individual sovereignties of allied countries. As President Obama described during the April-2014-press-conference, a scenario where an advanced nation-state (i.e. the United States, China, and Russia) behaves without accountability “[is] not the kind of world that is going to be stable and prosperous and secure over the long term.” In other words, bringing the TPP to fruition is a step toward establishing that liberal internationalist order, an order based upon democracy, free trade, and rule of law.

CHINA’S NEXT MOVE

Despite the TPP’s competitive angle, China reacted to the Pacific trade deal with unexpected openness. According to China’s state-sponsored news website (Xinhuanet) the Ministry of Commerce said it hopes the TPP will improve free trade and promote economic growth, calling it, “One of the key free trade agreements for the Asia-Pacific region.” China is not as concerned with the TPP as the United States is with the RCEP, because China sees no reason to feel threatened by the success of the TPP. In fact, at the 18th Association of Southeast Asian Nations (ASEAN) summit in Nov. 2015, Chinese Premier of the State Council Li Keqiang said, “China is open to the TPP and believes that TPP and RCEP, as well as other free trade agreement (FTA) arrangements in the region, will reinforce each other and contribute to the common goal of an Asia-Pacific FTA.” Washington D.C. may frame the TPP as a way of curbing China’s economy, but Beijing most likely sees the TPP as an opportunity for merging the two partnerships in the long term future, forging an even more extensive trade group in the Asia-Pacific (Morimoto).

While it may appear as if China and the United States are on the same page with regard to social and economic development, such an assumption would be incomplete as well as naïve. China’s recent construction of a naval base in Obock, Djibouti—the first of its kind by Chinese standards—is a strategic move that signals China’s desire to achieve maritime and commercial supremacy (Lubold and Page). The sprouting of military bases in the South China Sea demonstrates also China trying to counter U.S. military presence in the disputed area (Cohen). All of these new military installations stand to benefit from the RCEP if Beijing enacts it.

PARTISAN STRUGGLES

Shifting the focus from international to domestic analysis, a wide range of U.S. industries and consumers can expect changes from the finalization of the TPP. Some of those industries include: dairy farmers, pharmaceutical firms, steel makers, auto-parts manufacturers, garment companies, solar panel producers, as well as their hundreds of thousands of workers (Bradsher and Pollack). Critics of the TPP say that the deal will ship significant portions of U.S. jobs overseas, and take away opportunities from local businesses. However, the Obama administration maintains that it has negotiated for the necessary provisions to make the TPP equitable for all participants (Bradsher and Pollack).

Another obstacle of the TPP is the Republican leadership, which currently holds a majority in Congress. Republican lawmakers have rejected the TPP, because some of their more influential constituents represent tobacco and pharmaceutical businesses. If Congress authorizes the TPP, nation-states with anti-smoking laws can crackdown on tobacco-use, hurting U.S. tobacco companies, and they would be unable to sue said foreign entities. Sen. Orrin Hatch (R-UT), who is also the chairman of the Senate Finance Committee, objected that the TPP does not safeguard certain advanced drugs (known as biologics) long enough, leaving them vulnerable to biosimilars or cheaper copies of biologics. Democrats and Republicans have not reached a bipartisan agreement with regard to the TPP, but Sen. Hatch has been very helpful in fast-tracking the TPP so that Congress can vote on it before President Obama leaves office (Palmer).

CONCLUSION

The TPP will continue to be controversial, and legitimate arguments exist on both sides of the party line. While continuing to weigh the merits of the TPP and the pact’s myriad possible outcomes, it is equally important to consider that globalism under a capitalist system, always has costs that are both human and material. Like the RCEP, the TPP will not benefit everyone. Even so, the United States would be remiss to not follow through with the trade pact—especially when rivals of the United States plan to outsmart her through similar economic and military measures. With that said, further research has to be conducted investigating U.S. options if Congress and the Obama administration fail to ratify the TPP.

Works Cited

Bradsher, Keith and Pollack, Andrew. “What Changes Lie Ahead From the Trans-Pacific Partnership Pact.” The New York Times, 5 Oct. 2015, nytimes.com/2015/10/06/business/international/what-changes-lie-ahead-from-the-trans-pacific-partnership-pact.html?_r=0. Accessed 24 Aug. 2016.

Calmes, Jackie. “Obama Readies One Last Push for Trans-Pacific Partnership.” The New York Times, 21 Aug. 2016, nytimes.com/2016/08/22/business/international/trans-pacific-partnership-obama.html. Accessed 24 Aug. 2016.

Cohen, Zachary. “Photos reveal growth of Chinese military bases in South China Sea.” Cable News Network, 15 May 2016, edition.cnn.com/2016/05/13/politics/china-military-south-china-sea-report/. Accessed 24 Aug. 2016.

Khanna, Parag. “Why Obama, on His Last Asia Trip, Needs to Save the TPP.” Politico, 1 Sep. 2016, politico.com/magazine/story/2016/09/barack-obama-asia-trip-save-the-tpp-214204. Accessed 3 Sep. 2016.

“Remarks by H.E. Li Keqiang Premier of the State Council of the People’s Republic of China at the 18th ASEAN Plus China, Japan and ROK Summit.” Ministry of Foreign Affairs of the People’s Republic of China, 23 Nov. 2015, fmprc.gov.cn/mfa_eng/zxxx_662805/t1317373.shtml. Accessed 3 Sep. 2016.

Lubold, Gordon and Page, Jeremy. “China to Build Naval Hub in Djibouti.” The Wall Street Journal, 26 Nov. .2015, wsj.com/articles/china-to-build-naval-logistics-facility-in-djibouti-1448557719. Accessed 3 Sep. 2o16.

Morimoto, Andy. “Should America Fear China’s Alternative to the TPP?” The Diplomat, 17 March 2016, thediplomat.com/2016/03/should-america-fear-chinas-alternative-to-the-tpp/. Accessed 3 Sep. 2016.

Palmer, Doug. “Orrin Hatch holds cards on trade deal.” Politico, 19 Oct. 2015, politico.com/story/2015/10/orrin-hatch-tpp-pacific-trade-deal-decision-214893. Accessed 3 Sep. 2016.

Mengjie. “TPP, key deal for Asia-Pacific: China’s MOC.” Xinhuanet, 6 Oct. 2015, news.xinhuanet.com/english/2015-10/06/c_134686820.htm. Accessed 3 Sep. 2016.

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