With so much talk about government changes and executive orders following the inauguration of President Trump, it can be hard to keep up with everything that is happening in our country. One of the hot topics buzzing around is the situation with the Trans Pacific Partnership. President Trump has followed through on his campaigned aggressive stance against foreign competitors by choosing to end the Trans Pacific Partnership (TPP), which was negotiated and created in October of 2015. To understand the effects of President Trump’s motion, we must first understand what the TTP is.
So what is the TPP? Basically, it is a trade agreement between countries that border the Pacific Ocean. According to an article published by Vox, the “TPP is expected to reduce trade barriers among these countries, lowering tariffs on goods such as trucks, rice, and textiles” (Vox). Furthermore, the trade agreement would encourage countries to enforce labor and environmental regulations and promote more competitive trade between countries.
Can you explain the controversy surrounding President Trump’s decision? Yes, absolutely! So, the Peterson Institute estimates that the TPP “could increase US incomes by $77 Billion by 2025…And advocates hope the TPP could set a precedent for broader trade deals with other parts of the world, such as China and Europe, which could have larger economic benefits” (Vox). By choosing to abandon the TPP, the US could be losing out on a significant chunk of money along with trade barrier reductions on some products.
Okay…so why is President Trump not in favor of the TPP? Good question. Actually, quite a few people oppose the trade agreement. One critic is Senator Elizabeth Warren. Her main focus against the TPP lies in one of its provision called the investor-state dispute settlement (ISDS). The goal, as outlined, is to “mediate disputes between a government and foreign investors” (Vox). The ISDS would also allow the converse to occur, where foreign investors could make complaints against the United States. The ISDS panel is overseen by arbitrators as opposed to independent judges. This may sound like a beneficial provision; however, Warren fears that this will lead to bias toward large corporations, which will threaten American sovereignty.
Who else opposes the TPP? Public health groups are among the opposition for this trade agreement. They fear the TPP could prevent generic drugs from being introduced, which would ultimately boost drug prices and potentially cost lives.
We know some facts, so what happens now? It is too early to tell how President Trump’s decision will actually play out, but he firmly believes that by abandoning the TPP, the United States will have a lot of companies coming back to the US.