How the Trans-Pacific Partnership Benefits the United States?

The Trans-Pacific Partnership (TPP) agreement is a regional trade agreement that the United States negotiated with 11 other Asia-Pacific countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam).  The United States joined the TPP negotiations in 2010, and the negotiations were completed in October 2015. In February 2016, the Obama administration reached a formal agreement, and now is waiting for Congress to approve the agreement under the new Trade Promotion Authority law in 2016.

Up To

Nike promises to hire up to 10,000 people in the United States if the Trans-Pacific Partnership free trade agreement passes.

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There are conflicting opinions regarding the pros and cons of the TPP. Some people think that the TPP would reduce US income and employment, and increase inequality.  For example, the target of this year’s April Fools’ Day protests is the TPP. In Washington, D.C., at the offices of the Pharmaceutical Research and Manufacturers of America (PhRMA), and in New York, Boston, San Francisco as well as Tokyo, Sydney and other global capitals, protestors rallied against the TPP’s extreme monopoly provisions that will raise medicine prices.

However, I believe that the TPP is a comprehensive and high-standard agreement that will support U.S. economic growth and jobs and address trade issues to help American companies, workers and farmers stay competitive.

To begin with, the TPP agreement is important for the United States by expanding U.S. trade opportunities in a region of the world that represents 40 percent of global GDP.  It will also strengthen U.S. economic leadership and reinforce U.S. foreign policy and national security interests in a critical region.  This regional trade agreement will expand U.S. trade and investment ties with the six TPP countries that are existing bilateral U.S. free trade agreement (FTA) partners and open new markets in the five TPP countries that are not current FTA partners, including Japan, the world’s third-largest economy.  By setting reciprocal, enforceable trade rules generally and establishing disciplines in key new areas of interest to the United States, the TPP will help promote U.S. innovation and economic growth and support American jobs in every state.

The TPP eliminates over 18,000 tariffs on Made-In-America exports. As we all know, tariffs increase price for American exports. For example, they raise prices by up to 59 percent for U.S. autos and up to 40 percent for U.S. poultry, which puts workers and businesses at a global competitive disadvantage. Eliminating these tariffs on the cars, crops and consumer goods will support American jobs and create new opportunities to sell to the world’s fastest-growing markets.

The TPP supports good middle class jobs at good wages. Made-in-America exports rose by nearly 50 percent and contributed nearly a third of U.S. total economic growth from 2009 to 2014. American exports are supporting a record number of American jobs—11.7 million, an increase of 1.8 million new jobs over the last 5 years. The TPP will increase U.S. exports and support higher-paying jobs, because every billion dollars of exports supports 5,800 jobs, on average.

Furthermore, the TPP agreement addresses the types of issues that the United States has included in its past FTAs, such as market access for goods and services, the protection of intellectual property, strong investment protections including investor-state dispute settlement, and government procurement.  It also establishes disciplines in such key new areas as competition with state-owned enterprises (SOEs), digital commerce and the protection of cross-border data flows, emerging issues related to intellectual property rights, and regulatory cooperation.  The TPP countries used the U.S. approach of negotiating services (including financial services) and investment commitments on a “negative list” basis (i.e., all commitments are binding on a TPP country unless it explicitly excludes itself from a commitment).  This resulted in substantially increased market access opportunities for the United States.  The TPP agreement also includes strong labor and environment provisions. 

Last but not least, the TPP will not bring some issues people are now worrying about. Regarding the issue of medicine prices mentioned above, the TPP eliminates tariffs on medicines and medical devices, helping lower costs for hospitals, clinics, aid organizations, and consumers. In this way, the TPP makes life-saving medicines more widely available. Also, the Investor-State Dispute Settlement (ISDS) would not allow corporations to override laws, including environmental and public health regulations. ISDS cannot change laws in the United States or any other country. No government measure (federal, state, or local) can be blocked or reversed under the ISDS provisions or any other part of TPP. The United States would never negotiate away its right to regulate in the public interest. This is true with regard to public health and safety, the financial sector, the environment, and any other area where governments seek to regulate.

To sum up, the TPP will benefits the United States by reducing tariffs and other non-tariff trading barriers, increasing employment and wages, and unleashing the new economic growth.

For more detailed information on the TPP and its benefits and importance, visit USTR’s TPP website at: http://www.ustr.gov/tpp.

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2 Responses to How the Trans-Pacific Partnership Benefits the United States?

  1. tygaoblog says:

    This article is very informational and worth giving a thought on. As we all know that TPP has been a controversial topic, this article give a relatively clear summary on the benefits TPP brings to the U.S. Firstly, TPP can help expand U.S. trade opportunities and investment ties with the countries involved in this regional trade agreement.Secondly, the TPP reduces the tariffs on American made products, which will do great benefits to the U.S. exports. Thirdly, TPP can provide huge amount of higher-paying jobs for American. What’s more, TPP helps establish and strengthen disciplines in lots of issues included in the FTAs. And TPP will not erode U.S. government’s regulation right of the public interest and the government will not give up its power under the ISDS provisions. The reasons above can strongly support the point of view that TPP do has positive effects on the United States given the fact that so many Americans treat it as a threaten to the U.S. economy growth.And I think what is left to do for the government is to balance the advantages and disadvantages of TPP and take fully use of the benefits of TPP to help economy stably grow. And a well accepted trade agreement must be a mutual beneficial agreement.

  2. xyzhang2016 says:

    This is an interesting article that outlines that benefits of TPP to the US. I think the main motivation for Obama Administration to pursue TPP is to unlock opportunities for American manufacturers, workers, service providers, farmers, and ranchers – to support job creation and wage growth.
    TPP also has a huge impact on the world. It could reshape business practices across the world, potentially lowering tariffs for some goods and making foreign goods more readily available, as well as bringing worker standards into greater alignment.

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