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What does the Trans-Pacific Partnership mean for Americans?

Obama pushes to complete an Asia-Pacific trade deal that is central to the US pivot toward the region

In Beijing this week, world leaders are meeting at the Asia-Pacific Economic Cooperation forum. For a long time President Barack Obama has talked about a pivot to Asia, and a centerpiece of that is the Trans-Pacific Partnership (TPP). The TPP is a proposed trade pact involving the United States and 11 other nations on the Pacific, including Japan but not China. The deal could cost China up to $100 billion a year in lost exports. While Obama holds side meetings on the TPP at the summit, China is pushing a different free trade zone plan.

How does the TPP fit into Obama’s pivot to Asia?

How would this massive trade deal affect Americans’ lives?

How is China using the Asia-Pacific Economic Cooperation forum to project power?

We consulted a panel of experts for the Inside Story


Inside Story: What is your response to critics who charge that the TPP has been negotiated in secret and are concerned about limits on national sovereignty?

Joshua Meltzer: The chapters of TPP on labor and environment are about raising standards, not lowering them. It includes commitments by TPP members to implement international agreements on the environment and international accords on labor. It is important to ask what the situation would be without the TPP. Trade agreements will proceed apace, but TPP represents an attempt to bring these under the core values of democratic market countries. It is about setting out parameters and rules for conducting this kind of trade.

Is this likely to be a point of commonality for Obama and Congress?

I am fairly optimistic that we are going to get a trade deal. It will probably not happen in the lame duck session. It will be a good opportunity for a bipartisan outcome here for the administration. Republicans have been supportive of freer trade. There are good reasons this will pass.

Moving trade promotion authority forward will help prospects for TPP. Trade promotion authority is legislation passed by Congress, allowing the administration to circumvent the traditional debate and amendment process. It is a deal wherein the administration negotiates with Congress that they draft the deal in close consultation with them and in exchange Congress gives it an up-or-down vote rather than picking it apart as they normally do.

‘The TPP will include detailed new rules on labor and environment that will actually raise the bar for countries.’

Joshua Meltzer

fellow, Brookings Institution

How does the TPP fit into Obama’s pivot to Asia?

Ely Ratner: The pivot to Asia is a comprehensive policy that includes military, economic and diplomatic components. The TPP stands as the largest economic piece of the Obama administration’s policy in Asia. Coming into office in 2009, President Obama and his senior advisers had the opportunity to step back and look at the winding down of the wars in Afghanistan and Iraq and determine how to invest the U.S.’ security resources. Their conclusion was that the history of the 21st century would be written in Asia and that the U.S. had underinvested. Much of the policy was aimed to renew U.S. focus in the region.

Does that U.S. focus effectively mean countering Chinese power and bolstering traditional allies?

Absolutely not. In fact, increasing engagement with China has been a core component of the pivot. It has been strengthening traditional security arrangements. Some of it is to hedge against potential instabilities as a result of the rise of China. But I would not say it is either/or. If you look at Obama’s engagement with China, he will now have met with Chinese leaders 15 times — the most ever by an American president.

‘The TPP stands as the largest economic piece of the Obama administration’s policy in Asia.’

Ely Ratner

senior fellow, Center for a New American Security

Is the TPP more likely to pass with a Republican-controlled Congress?

Lori Wallach: The first thing that would happen is for Congress to grant President Obama trade promotion authority. This would allow Obama to sign the TPP before Congress signs the agreement … What would be required is for Republicans in Congress, who have attacked Obama as power hungry, must vote to voluntarily give him large swaths of power. This is an interesting problem for them and their own political base. It hard to run against Obama and his political power and then turn around and grant him authority to circumvent them.

How does China feel about the TPP and how could it change policy toward China?

China has been invited to join TPP on the condition that is willing to meet the current rules being negotiated. China, among a variety of developing countries, does not think the rules are suitable. To the extent U.S. corporations are being given space to dictate drug patents and mineral rights, China is not too keen about it. It is not like the TPP is the U.S.’ rules. It is the corporate expansive rules that would not work well for most of the people in TPP countries. It would expand the profit margin for corporations in those countries. What is more important than what China thinks about them is what people think in the member countries themselves. We are being told this is the big way to contain China. That is just a false paradigm. We have been told through every trade agreement that, regardless of the trade policy details, it would be good foreign policy. In the case of NAFTA [the North American Free Trade Agreement], it was that immigration would tick up if NAFTA was not approved. As it turns out, we approved NAFTA, and immigration increased. The opposite of what was predicted happened.

‘The more parliamentarians and civil society actors have learned, the more they have said that [the TPP] is something they cannot support.’

Lori Wallch

director, Public Citizen’s Global Trade Watch

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