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The Trans-Pacific Partnership and the Economic Importance of Being Bipartisan

July 04, 2015
The Trans-Pacific Partnership has the potential to be one of the most substantial trade agreements ever formulated in the Asia-Pacific region. It is one of the largest trade agreements in history, involving twelve different countries throughout the region. Combined, these countries represent almost 40 percent of global output and 25 percent of global exports.

By Zach Fox, C’17

For this reason many are calling it the first “mega-regional” conglomerate of its kind, which also explains why it has taken so long to complete. The agreement was first proposed in 2005 and has taken over a decade to come to full fruition due to its complexity and plethora of regional specific clauses that differ between the non-US nations involved in the pact. The TPP would lift tariffs and quotas, creating a free-trade policy between the involved nations. When Obama came into office in 2009, he made it a top priority to work with the allied nations to make TPP a reality. In fact, against party favoritism, he made securing this partnership a focal point of his second term. Last summer, after 20 rounds of negotiations spanning over 10 years, it finally seemed like a common ground agreement was close to being reached. One year later, however, the fate of the bill no longer lies in the hands of our global companions and competitors, but in the hands of our very own legislative branch of the U.S. An office, which for the majority of Obama’s presidency has had a difficult time getting any bills passed with a common goal of bipartisanship, let alone ones as substantial and with as much economic impact as this one.

How Could TPP Effect the Economy?

The partnered countries, which include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam, have a wide range of economic standings and systems put in place, but have a total GDP of over 28 Trillion Dollars. This accounts for approximately one third of global trade, and proponents of the bill believe that this kind of trade contingency could have a positive economic impact in the long run, as it will create domestic jobs, protect Asian workers, and reinforce strategic relations in a territory that is quickly gaining influence. Some econometric assessments even suggest that the TPP could remarkably lift real incomes of member countries by $285 billion over baseline projections by 2025. The two countries in the pact with the strongest leading economies, Japan and the US, will of course see the highest GDP growth, but nevertheless exports of member countries are projected to increase $440 billion[1]. If these projections are right, this partnership could dramatically boost the economies of twelve different countries over the course of a mere decade, making a potential political and economic milestone. New markets will be opened and it will become easier to export a higher number of goods, and more ways to reap the benefits. Many US manufacturers, such as Nike, have supported the bill, as they believe this will give big businesses more financial incentive to stop outsourcing work overseas, and start rehiring American laborers[2]. This is just a starting point too, as the pact is currently considered an “open-architecture,” document which means other countries will be eligible to join later, expanding trade and the total GDP gain even more in the coming years.

Impact of Congressional Partisanship on Passing the Legislation?

In addition to the partnerships potential for great economic gain, due to its strict laws over human rights and labor, Obama has called the agreement the “most progressive deal in history[3].” Ironically, his party does not agree. Many democrats are more skeptical on trade in general, and believe that there is no outcome where this bill does not result in a loss of American jobs. Others have said it is too reminiscent of the North American Free Trade Agreement that caused deficit in the 1990s. This scenario has proven to be an even more unusual example of congress not being able to work together, as now Obama’s own party, including house minority leader Nancy Pelosi, has spoken unfavorably about the bill. During the first few years of his presidency, Obama tried to bridge the party divide on Capitol Hill but has failed to bring the two sides together on key issues. Then, he lost the majority and took executive power into his own hands, gaining much criticism from his opponents. Now, he has walked across party lines to try and work with both republicans and democrats to pass a bill which he believes will have a substantial impact on the economy, regardless of what his own party thinks, and is facing even more roadblocks. This shows our governments inability to work together, when there is a potential bill that could hugely strengthen the economy. It’s something the bipartisan citizens coalition I am interning for this summer, No Labels, is working to fix, and at our first congressional hearing last week, issues like this were addressed in solely economic terms, not party ones. I believe this is how economic discussions like this will need to be addressed in the future so that we can lower are deficit regardless of the parties that retain power. At the hearing, No Labels co-sponsors, John Huntsman and Joe Lieberman, focused on the companies National Strategic Agenda, which involves getting elected officials to work together on bipartisan issues like tax, budget, regulatory reform and improvements in energy, technology, education, health care and entitlement policy. Although differences exist in how each party approaches reforming these systems, there is little dispute that they do need to be improved. At the hearing, No Labels addressed how the lack of a bipartisan platform to discuss common goals leads to unwarranted disagreement in Washington[4]. No Labels believes that the TPP is perfect example of the negative outcomes of partisan politics, since something that could be good for the economy lies at risk for getting passed, because politicians are unable cross party lines and work together. The hearing was a major success. Multiple news outlets covered the hearing, giving No Labels more exposure and PR for the October conference in New Hampshire, which will push presidential candidates to adopt our shared agenda if elected to office. 


  [1] Gary Clyde Hufbauer and Cathleen Cimino, “What You Need to Know About the Trans-Pacific Partnership,” PBS News, June 23rd, 2015

  [2] Peter Baker, “Obama Scolds Democrats on Trade Bill Pact Stance,” New York Times, May 8th, 2015

  [3] Eric Bradner, “Obama pitches ‘most progressive trade deal in history’’ CNN Politics, April 30th, 2015

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