TRYING TO UNDERSTAND THE TPP

The Trans-Pacific Partnership (TPP) writes the rules for global trade between 12 nations: Australia; Brunei; Canada; Chile; Japan; Malaysia; Mexico; New Zealand; Peru; Singapore; United States; Vietnam.
Although it was signed today it is not passed yet as every Nation needs to get it authorized by their respective legislative bodies and already a lot of voices are being heard.
According to the US Administration it “will help increase Made-in-America exports, grow the American economy, support well-paying American jobs, and strengthen the American middle class”
According to the environmentalists: “If adopted, the TPP will eliminate or reduce tariffs between 12 nations But while it specifically addresses some environmental concerns — such as trade of illegally harvested resources or wildlife trafficking — climate change activists saw Monday’s announcement as the culmination of a long-watched train wreck. “It’s still the same disaster for climate change it was three months ago,” 350.org’s Karthik Ganapathy

According to the Office of the President (https://ustr.gov/tpp/) The Trans-Pacific Partnership (TPP) is a new, high-standard trade agreement that levels the playing field for American workers and American businesses, supporting more Made-in-America exports and higher-paying American jobs. By eliminating over 18,000 taxes—in the form of tariffs—that various countries put on Made-in-America products, TPP makes sure our farmers, ranchers, manufacturers, and small businesses can compete—and win—in some of the fastest-growing markets in the world. With more than 80 percent of the world’s consumers living outside our borders, TPP will significantly expand the export of Made-in-America goods and services and support American jobs.

Let’s try to understand although it is very early to make sense to a document that took several years to establish.

  • TPP Eliminates over 18,000 Different Taxes on Made-in-America Exports
  • TPP Includes Worker Protections
  • TPP Includes the Strongest Environmental Protections of Any Trade Agreement in History although Environmentalists are not completely on board.
  • TPP Prioritizes Good Governance and Fighting Corruption
  • The Trans-Pacific Partnership would create a free-trade zone among 12 nations around the Pacific, making it the world’s largest. The countries within its scope account for 40 per cent of the world’s economic output.
  • In fact the TPP look like a giant NAFTA agreement and I am sure you remember the fights and arguments about NAFTA in the 90ies.
    DOES THIS END OR REPLACE NAFTA?
    No. The North American free-trade agreement still exists, but in areas where the two agreements conflict the newer one will usually prevail. (In a way, this is what Barack Obama promised when he first ran for president and said he’d revisit NAFTA – whichprompted a controversy back in 2008. He promised new labor and environmental provisions, and this agreement has chapters on both those things.) The TPP would expand the North American Free Trade Agreement (NAFTA) "trade" pact.

    However the NAFTA model that has spurred massive U.S. trade deficits and job loss, downward pressure on wages, unprecedented levels of inequality and new floods of agricultural imports.
    The TPP in a way replicates, and expands NAFTA's special protections for firms that offshore U.S. jobs. And U.S. TPP negotiators literally used the 2011 Korea FTA – under which exports have fallen and trade deficits have surged – as the template for the TPP.

    Could the TPP deal hurt agriculture and manufacturing sectors? The truth is: probably.
    *****
    However let’s face it if the TPP allows the creation of a “plainer” field with more transparency, additional trade exchange between nations and reduce Tariffs, on the long run it is better for the economy. The reality is that economy is raw energy in a perpetual movement pushing old models toward new models forcing industries to adapt to new form of demand. If we want to resolve the problems of coal in Pennsylvania through the TPP, I have news for you that problems should have been resolved in 1920 and thought through probably in 1910 so let’s make sure we select Presidents that have a global vision for the next decades.

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