The Trans-Pacific Partnership (TPP) is the culmination of a broader ‘pivot’ on trade policy that has at times brought President Obama into conflict with his supporters and key Democratic constituencies. Currently entering a delicate phase of negotiations, the TPP could usher in a new age of U.S. trade policy. Described by U.S. Trade Representative Ron Kirk as a “21st century trade agreement,” it focuses on new issue areas, including intellectual property. With the fourteenth round of negotiations concluded and the fifteenth round set to take place in Auckland, New Zealand this December, the participating parties have set an ambitious goal of reaching an agreement by next January. It is important that the American public takes the time to consider the implications of the TPP through the lens of both domestic politics and U.S. Pacific policy.
Under the Radar: the Emergence of the TPP
When negotiations first began in 2005, only four countries, Singapore, Chile, Brunei, and New Zealand, were involved, with the aim to create a comprehensive, open Pacific market. Neighbors including Peru and Malaysia gradually joined, but the TPP only gathered serious momentum near the end of the Bush administration when the United States announced its interest in the agreement. Today, Robert Lawrence, a Professor of Trade Policy at the Kennedy School, describes the Trans-Pacific Partnership as a “coalition of the willing” that is intended to “set the standard” for all free trade agreements in the region. In fact, around half of current TPP members already have free trade agreements with the United States but are willing to meet the higher standards that the agreement demands. Other nations, including China and Japan, remain reluctant to join. This agreement follows current movements in free trade negotiations. With the Doha Round of the World Trade Organization dragging on and abandoned by many countries, new bilateral and multilateral initiatives have been advanced as alternatives.
Amid these developments, restrictions on trade have been growing in recent years. The Secretary General of the WTO, Pascal Lamy, described the current rise in trade restrictions as alarming. The imposition of further measures could endanger the fragile economic recovery worldwide and increase volatility on a global level. In this uneasy environment, the impact of the TPP remains uncertain. For the United States, expanding trade in the Pacific could boost U.S. exports to meet the President’s National Export Initiative goal of increasing exports to $3.14 trillion by 2015; last year, the value of U.S. exports was $2.1 trillion, around 13.8 percent of GDP. In securing economic recovery, preserving the openness of the international economy to U.S. goods and services is critical.
Domestic Debates
Negotiations around TPP have focused on sensitive topics including patent protection and creating rules for state-owned companies. Yet, whereas the passage of NAFTA was greeted with heated debate and the infamous warning by Ross Perot on the “giant sucking sound” of U.S. jobs being outsourced to Mexico, few have even heard of the TPP. This is attributed to the near-absolute secrecy of the negotiations and relative lack of input from domestic constituencies. Celeste Drake, a trade policy specialist at AFL-CIO, tells the HPR, “it’s [largely] a one-way conversation.” Even after fourteen rounds of negotiations, very little information has been released, despite demands by the AFL-CIO and other organizations to increase transparency.
Still, the TPP has provoked strong debate in certain circles. Lawrence observes that issues of trade policy tend to be “very problematic and particularly difficult for Democrats,” as their natural base of support is generally hostile to free trade. Indeed, even strong supporters of President Obama are concerned with the effect of the TPP on American jobs and workers.
In July, thousands marched on the White House against the TPP, fearing that intellectual property provisions addressing prescription drugs could provide pharmaceutical companies with monopolies and increase the costs of medication worldwide. Even more shocking for the President, a union picketed a fundraiser that he held in Portland, Oregon. The Association of Western Pulp and Paper Workers (AWPPW) fears that the TPP could lead to manufacturing job losses. Gregory Pallesen, Vice President of AWPPW, characterized the deal for the HPR as a “NAFTA-style, Bush-style trade agreement.” Pointing to job losses that have reduced his union membership from 25,000 to 5,000, Pallesen explained, “the trade agreements are for us the root of all economic evil.” Particularly concerned that the TPP would be passed with an ‘up or down’ Congressional vote without amendments, he believes “it’s not being negotiated the way it should be.” Even some Congressmen and women argue that the President lacks the authority to negotiate because the President’s Trade Promotion Authority expired. Recently, 130 members of Congress expressed in a letter to Trade Representative Kirk that indicated their belief “that important policy decisions are being made without full input from Congress.”
The Pivot on Trade
Beyond domestic concerns, the Trans-Pacific Partnership Agreement consolidates the United States’ economic and political objectives in the Pacific. Trade policy can be used to strategic ends, strengthening economic ties to bolster political alliances. Former World Bank President Robert Zoellick, speaking at Harvard, said that he sees the TPP as “emphasizing the commonality of interests, the common rules.” Similarly, Dr. Nicholas Burns, who served for 27 years in the U.S. Foreign Service, told the HPR that, “at its core [TPP] is an economic institution, and yet it always has a political cast to it. The countries invited to participate are democratic countries…I think that’s a force multiplier.”
The TPP, unprecedented in scope and scale, is ultimately a bold new step in U.S. trade policy and may become an important element of President Obama’s legacy, but uncertainties remain. According to Drake, the AFL-CIO is “not confident that it’s going down the right path,” and transparency remains a concern. Translating the ambitious aims of this would-be trade deal into a viable agreement will require a willingness to accommodate divergent interests, both domestically and among negotiating partners.