Trans-Pacific Partnership update: stronger economic ties if enacted.

• Author: Salov, Alex
• Position: SPECIAL SECTION: International Trade

During 2015, the Trans-Pacific Partnership (TPP) was widely discussed in the public media. In many cases the discussions were affected by the political views of the participants rather than their knowledge of what the TPP actually is. This was due in part to the fact that until recently most of the details of the Partnership were kept secret and the negotiations were conducted behind the closed doors.

TPP is a regional free trade agreement (FTA) between the United States and eleven countries around the Pacific Ocean basin. The purpose of the TPP is to expand trade of nearly all goods and services by reducing the existing barriers in the region. The twelve negotiating countries account for nearly 40 percent of the world's GDP. It is the largest trade agreement since NAFTA and covers a wide array of aspects stretching from car manufacturing and intellectual property rights to e-commerce and tariffs on rice and dairy products.

TPP Negotiations

The TTP negotiations started in 2005 between Brunei, Chile, New Zealand, and Singapore. The United States joined the negotiations in 2008 together with Australia, Peru, and Vietnam. During the following five years, Malaysia, Canada, Mexico, and Japan also entered the negotiations. Since joining the TPP talks, the idea of leading such a trade agreement became a part of the US "Pivot to Asia" strategy. This strategy is based on the reorientation of American foreign and trade policies to the Asia Pacific region, where the twenty-first century political and economic activities will be the most prolific. It is also widely seen as a tool to counterbalance and restrain further economic expansion of China in the region. Therefore, from the US perspective, the TPP is more of a geopolitical than economic significance. One of the facts that support this belief is that the bilateral FTAs between the United States and Australia, Canada, Chile, South Korea (not a part of TPP), Mexico, Peru, and Singapore already exist and serve many of the same purposes that the TPP is designed to address.

In June 2015, the Senate passed the bill that granted Trade Promotion Authority to President Barack Obama. The bill passed 60-38 and the Alaska delegation voted in favor of it. Using Trade Promotion Authority, the president is able to complete trade deals and utilize the so-called "fast-track" when dealing with Congress. "Fast-track" means that Congress can only vote yes or no on trade agreements in question, using a simple majority...