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Treaty Terms: Understanding The Trans-Pacific Partnership
12/12/2016 Trade Andrew S
keywords: Commerce Free Trade International Agreement TPP Trump

From NAFTA to CAFTA to the CPTA, free trade agreements have long played a key role in US diplomacy and economic policy. So too would the Trans-Pacific Partnership, a proposed trade agreement between the U.S. and 11 other countries. Negotiated by President Obama, the deal would vastly expand US trade but is unlikely to be enacted, at least in the short term.

Assessing The Agreement

The Trans-Pacific Partnership, or TPP, is an international trade agreement between the following countries: Vietnam, Malaysia, Mexico, Singapore, Brunei, Peru, New Zealand, Japan, Canada, Australia, Chile, and the United States. Intended to reduce trade barriers and expand global commerce, the deal includes the following provisions:

  • Eliminating tariffs, quotas, and other trade restrictions on all non-exempt goods
  • Establish institutions to resolve trade conflicts and disagreements among members
  • Simplify and speed up customs procedures
  • Establish protections for intellectual property, labor standards, and environmental quality among members
  • Encourage transparency in regulation so that domestic standards do not become de facto barriers to trade

For the TPP to go into full effect, all 12 signatories must ratify it. If some of them do not, the agreement will still go into effect for those that do if at least 6 signatories representing no less than 85% of all signatories' GDP ratify it. Because the United States represents more than half of the GDP of all the signatories combined, the agreement cannot survive without US support.

Political Prospects

President-Elect Donald Trump has vowed to remove the US from the TPP on his first day as president. Along with opposition to immigration, skepticism of free trade was one of the most important themes of his campaign, so he is likely to carry out his promise. The TPP will thus lose its largest signatory, making it impossible for the deal to survive in its present form.

Despite these prospects, many supporters still have hope that the deal will survive in the long run. Although other members cannot ratify the TPP as such without the US, they can create a similar free trade area with each other, possibly by expanding the existing Trans-Pacific Economic Partnership Agreement between Brunei, Singapore, New Zealand, and Chile. The US could then join that free trade area once a different president comes to power. This could happen relatively soon. Vice President-Elect Mike Pence supported the TPP before he joined Donald Trump's campaign, so if Trump somehow leaves office before the end of his first term, Pence could resurrect the agreement.

Andrew S

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