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Explainer: Deconstructing the Trans-Pacific Partnership

As Obama aims to seal the deal on the cornerstone of his Asia policy, domestic and foreign opposition remains firm

In an attempt to move beyond NAFTA (the North American Free Trade Agreement) and similar free trade agreements with 20 other nations, the United States has been engaged in extensive talks with 11 countries, most of which are in the Asia-Pacific region, to cement the Trans-Pacific Partnership (TPP) — a trade agreement that would lower tariffs and ease investment restrictions. Together these 12 countries account for 40 percent of the global economy.

Expanding the orbit of U.S. free trade is a major foreign policy goal of the Obama administration, and as a part of its desired international "pivot" toward Asia, it hopes to increase its economic presence in the region.

Supporters of the partnership say by lowering barriers to trade and increasing avenues for economic globalization, the enlarged $2 trillion zone of diminished tariffs would stimulate employment in U.S. and provide an incentive to invest abroad. Analysts say the agreement hopes to show China that the U.S. will remain a committed economic partner for the nations of the Pacific Rim, without excessively provoking Beijing.

As with the landmark 20-year-old NAFTA pact, pro-business groups welcome the prospect of a robust 12-nation TPP, whereas opponents — notably labor groups and many sympathetic members from the president’s own party — decry the potential loss of American jobs.

What is the TPP?

Initially called the Trans-Pacific Strategic Economic Partnership Agreement, the pact began as a 2005 trade agreement between Brunei, Chile, New Zealand and Singapore in an effort to integrate their economies, drive growth and create unified regulations.

In 2008, during the Bush administration, the U.S. joined talks to expand the agreement, along with Australia, Peru and Vietnam. The U.S. trade representative under Obama, Ron Kirk, declared the American interest in forging a “broad-based regional pact.”

Then, in 2010, under the new name the Trans-Pacific Partnership, Malaysia entered the discussions, followed by Canada and Mexico in 2012. By 2013, Japan began participating in the talks. South Korea and Taiwan have subsequently announced their interest but not formal participation.

Though all of the negotiating parties belong to the Asia-Pacific Economic Cooperation forum (APEC), the TPP is a separate initiative but with similar goals as APEC’s proposed Free Trade Area of the Asia Pacific.

The aims of the TPP include the lowering of barriers to trade in goods and services, reducing tariffs to zero by 2015. In addition, the TPP hopes to promote investment and job creation in member states.

Who opposes the TPP?

Opposition to the proposed agreement and to the perceived influence of multinational corporations in the process has been led by public health advocates, labor groups and environmentalists and politicians.

Some U.S. legislators have voiced concerns that the TPP requirements would prevent access to medicine in developing countries, due to excessive patent protection. Doctors Without Borders argues against “dangerous provisions that would dismantle public health safeguards enshrined in international law.” 

After WikiLeaks revealed parts of a draft of the TPP text last November, many activists also focused criticisms on the intellectual property section of the proposed partnership, which, according to WikiLeaks, could have “wide-ranging effects on medicines, publishers, internet services, civil liberties and biological patents.”

Along with the Global Trade Watch project by consumer rights group Public Citizen, Sen. Ron Wyden (D-Oregon) has attacked the secrecy of negotiations and lack of public scrutiny. He introduced a 2012 bill to promote more transparency on the part of the U.S. trade representative, who has reportedly consulted corporations, but not Congress, on many details of the new trade proposals.

As a trade agreement, the TPP would require House and Senate majorities and then the president’s signature. Domestic American opposition has concentrated their skepticism not just on how “free” the agreement would be but also on problems with the “fast track” congressional voting procedure.

Japanese producers in the anime and manga industry say the TPP could damage their business by allowing companies to halt imports of intellectual property, in order to protect local distributors of licensed merchandise. Rice farmers, as well as beef, poultry and pork producers, have mounted firm resistance to the pact, which would dramatically decrease import tariffs.

Geopolitically, China is concerned that the partnership is designed to exclude its economic activities, while some American officials have expressed doubts whether the market-oriented pact would ever be compatible with Beijing’s command economy.

In Europe, analysts view the TPP as a trade regime that could set a precedent for the nascent Transatlantic Trade and Investment Partnership (TTIP).

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