You may have read or heard a lot about the Trans Pacific Partnership over the last little while and found yourself wondering exactly what it is supposed to be. Don’t worry. I’ll explain it to you in a way that doesn’t have any spin.
In the simplest of terms, the TPP was an agreement that was supposed to benefit 12 countries that bordered the Pacific Ocean. It would allow for easier trade between these countries by decreasing tariffs and making it easier to get one country’s products into the other 11.
The 12 countries involved were: the United States, Canada, Mexico, Chile, Peru, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, and New Zealand. And the products affected by the TPP would be mostly automobiles, meat and produce, pharmaceuticals, and technology.
If you’ve noticed that China’s not on that list and now see the items that we’re talking about, you’re beginning to see why this was such an interesting concept. China makes cheap stuff and ships it just about everywhere. The TPP was a way for these countries to form an alliance together, mostly against Chinese-made goods.
In theory, it would actually benefit trade growth. These countries have a lot of people in them, some of which would be receiving these goods at decent prices for the first time. Allowing things to be traded more easily should offset the domestic loss. In other words, if I now decide to buy a shirt made in Malaysia because it’s cheaper, there’s somebody in Australia buying an American made pair of pants.
However, there was some problems with it as far as the US could see. When looked at in a certain light, it looks like the wrong people would benefit. For example, say a major drug manufacturer decided to make a plant in Chile. The Chilean people would get jobs, which is great, but the company would be the ones benefitting from the cheaper labor and the patents/copyrights that went along with everything – in other words, the drug wouldn’t necessarily be cheaper to anybody, but the company would be making more profits. And the Chilean government would have to abide by whatever labor rules and regulations were enacted in the TPP, which could even wind up costing them money.
There were other issues as well. Some foreign car makers (like Toyota) have plants in the US. This cuts down heavily on the fees and restrictions they would face if their cars were made local to them and then imported here. But if we signed the TPP, people were afraid that the incentive for the auto industry to have plants here would vanish – and with it, those American jobs.
Well, there were some sticking points like these that supposedly got ironed out. Countries would be forced to allow labor unions and protect workers as well as the environment. Food inspection practices had to be more streamlined and uniform across all countries. All this sounds good, right? Maybe not problem solved but the idea of opening up American goods to 11 other countries interested in buying them still seems like a win, doesn’t it?
So why did we decide not to sign it?
Well, the first thing is that our president feels that he can better negotiate deals with these countries individually instead. This way we’d get the best possible deal from each place. Granted, it isn’t something his predecessors were capable of doing, but that’s never stopped Trump before.
But the other reason is that the end agreement, all 5,000+ pages of it, had less to do with trade and more to do with ridiculous policies that would never have flown in a million years on their own. It was simply corporate greed, folks. And so the US did what anybody should do when confronted with a bunch of greedy cheaters: we took our ball and went home.