This week President Barack Obama and Senate Majority Leader Harry Reid got into an uncharacteristic show down over the passage of the Trans-Pacific Partnership. President Obama is seeking to have the trade agreement fast-tracked through Congress by the end of the month, Reid on the other hand, wants the Senate to have the chance to make amendments to the legislation before a vote on final passage.
Negotiations for this massive trade bill have been taking place since 2010. Unfortunately, the trade negotiations have been conducted under a veil of secrecy, meaning the bread and butter provisions located within the deal can only be teased out based on leaked information. While our Democratic leaders stand at an impasse over the next step for this deal, here’s a look what the Trans-Pacific Partnership is all about.
What countries are involved in the TPP?
As of now the negotiated parties are Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and of course, the United States. When passed the TPP will eliminate tariffs on goods and services between these countries and coordinate other existing trade regulations.
These countries are America’s largest trade partners, accounting for $1.5 trillion worth of traded goods in 2012. They are also responsible for 40 percent of global GDP and 26 percent of global trade.
What are some of the controversies involved in the TPP?
To start with, the United States’ proposed agreement includes a strict enforcement of U.S. patents and copyrights, particularly relating to intellectual property. Many lawmakers are expressing concerns over how these enforcements relate to patented prescription drugs. For example, if international pharmaceutical companies aren’t allowed to make generic versions of some medicines, prices could become unaffordable for developing nations.
Japanese officials have also expressed some worries over the effect this crackdown on copyrighted material will have on the popular magna and cosplay culture. These industries rely heavily on parodying American movies and books, and there are fears that the trade agreement could ban the Japanese import of U.S. DVDs.
Some of the biggest debates during the negotiations have surrounded market access and state owned enterprises. For example, Japan is leery of allowing American auto makers to compete in their car industry. The U.S. also wants to place the trade focus on privately held companies, meaning state run industries would lose American business through the TPP.
What does the TPP mean for American workers?
That depends on who you ask. Organized labor claims that the trade deal benefits big businesses while threatening the jobs of American workers in the manufacturing industry. Both the Economic Policy Institute and the Center for Economic Policy and Research have said that the trade bill would spark job losses and a decline in wages.
The TPP also prohibits the expansion of any “Buy Local” or “Buy American” efforts by U.S. industries. The idea behind this ban is that by promoting such movements, the United States is provoking other countries to start their own national campaigns to limit imports from America.
For the American economy overall however, the TPP could be a great boon. The Peterson Institute for International Economics has estimated that the United States will realize $78 billion more per year thanks to the TPP. Small business could also have an easier time attracting foreign investment thanks to an ease on regulations.