The innards of the Trans-Pacific Partnership Agreement
Senator Bernie Sanders has expressed his disagreement with President Obama’s big trade deal. Organized labor in the US argued during negotiations that the trade deal would largely benefit corporations at the expense of workers in the manufacturing and service industries. The Economic Policy Institute and the Center for Economic and Policy Research argued that the TPP could lead to job losses and lower wages.
Obama was given fast track authority to negotiate this and other trade contracts with various countries. Obama maintained that this authority was important in completing the TPP and then sending it to Congress for a vote. The Senate will not have the ability to delay the TPP and lawmakers will not be able to change it. Supporters say the TPP would force China to increase standards and regulations.
The Trans-Pacific Partnership, or TPP, has become more politically combative with groups concerned about trade contracts. The TPP is not the only one, but it is very large and the negotiations are complete.
It started with a trade contract between Brunei, Chile, New Zealand, and Singapore that came into effect in 2006. That deal separated tariffs, intellectual property, and trade policies for most goods traded between the countries. The TPP has become a gigantic free trade agreement between the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile, and Peru. TPP wants to extend economic ties between these nations, lower tariffs on goods and services, and increase trade to boost growth. The 12 countries have a population of around 800 million and account for 40% of world GDP and 26% of world trade. The agreement is a remarkable achievement given the vastly different approaches and standards within member countries mention the special protections some countries have for certain industries. That makes it about the same size as the Transatlantic Trade and Investment Partnership, another trade contract currently being used. The contract could create a new single market like the EU.
After too many years of bogging down US foreign policy in the Middle East, the Obama administration is turning its attention to Asia. The TPP is the focus of US economic rebalancing and a stage for regional monetary integration. Some say the TPP goes further, as an effort to contain China and provide a monetary counterbalance in the area. Many parts of the TPP are designed to exclude China. The TPP is believed to be a strategy to keep China contained.
Most of the disapproval of the TPP has been due to the mystery consultations, in which countries planned to introduce big changes for the future of the countries without the knowledge of the voters. But much of what has been exposed involves changes in intellectual property, state ownership and international courts. The TPP, as well as other trade agreements, have a wide range of regulatory and legal concerns that make the agreements influential in US foreign policy and law.
Information about the TPP’s effect on intellectual property has revealed that the US has been enforcing stricter copyright security for music and film, as well as more comprehensive and long-lasting patents. The TPP would also make the approval process more difficult for generic drug makers and extend protections for biologic drugs, which has worried members of Congress. Public health and internet groups have long campaigned heavily against the TPP on these issues because it can restrict public access to knowledge.
Many TPP governments basically own large chunks of their economies. The discussions have been intended to limit public support to public sector companies in order to increase competition with the private sector. But some say it gives companies the ability to sue governments that change policy to favor services provided by the public. It is also said that the will of the TPP will increase competition between the labor forces of nations.
After World War II, investors were concerned about investing money in third world countries, where the legal systems were not as reliable. They worried that an investment would be made in the country one day only to see a dictator take it back later. Enter the provision called “Investor-State Dispute Settlement” or ISDS. ISDS was installed in previous commercial contracts, and is installed in the TPP, to encourage foreign investment in countries with weak legal systems. ISDS could result in huge penalties if a country takes corporate asset confiscation measures. The ISDS provision in the TPP would also further tip the balance of power in the US in favor of large multinational corporations and weaken US autonomy.