The United States and 11 other countries have concluded the Trans-Pacific Partnership, commonly referred to as the TPP, a trade deal impacting up to 40 percent of the global economy.

Part of President Barack Obama’s effort to “pivot” to Asia, the trade deal sets a new standard on eliminating and reducing tariffs, and also on protecting intellectual property in Asia-Pacific countries, where significant economic growth is expected.

The Daily Orange interviewed Mary Lovely, an economics professor, and Miriam Elman, an associate professor of political science, of the Maxwell School of Citizenship and Public Affairs via email about the trade deal involving the U.S. and 11 Pacific Rim countries.

The Daily Orange: What’s your take on the Trans-Pacific Partnership deal?

Mary Lovely: I support the Trans-Pacific Partnership for three reasons. First, TPP breaks down formal and informal barriers to trade and allows production to occur where costs are lowest. Secondly, TPP sets ambitious standards for labor and environmental standards — protections that will require some countries to significantly improve working conditions and pollution control. … Lastly, I support TPP because it engages the United States in a meaningful way in Asia and creates deeper links between the U.S. and what is perhaps the world’s most dynamic region.

Miriam Elman: That’s certainly going to be good for a lot of U.S.-based industries, including in sectors of the economy like machinery, info tech, apparel and consumer goods, and especially agriculture. The deal is also good for both the developed and less developed nations that are signatories to it — they are also going to gain new access to the Canadian and American markets.
The D.O.: What kind of benefits would the TPP bring to the U.S. and global economy?

M.E.: The TPP is going to be of major benefit to some U.S. industries, while others will be losers from this deal. U.S. agriculture, large manufacturers (like aerospace) and tech companies are going to be TPP winners. Boeing for example has endorsed the accord. The TPP will definitely boost American exports for our country’s dairy farmers and Midwest cattle ranchers, who up until now have been closed out of the Japanese and Canadian markets. This is why some U.S. companies and industries are applauding the deal while others are opposed — saying that it will cost Americans jobs. Overall, the deal is good for the other 11 Pacific countries involved.

The D.O.: The TPP did not include China within the 12 nations. What are the benefits or disadvantages of excluding China from the TPP?

M.L.: There is a disadvantage in excluding China since further opening of its market to U.S. exports would increase the benefits from the deal for all other parties. The benefit of not including China is that China does not want to be constrained by certain TPP restrictions, especially with regard to domestic policies, such as labor rights and environmental protection, but also with regard to the opening of all sectors of the economy to foreign investment and competition.

The D.O.: The TPP negotiation started in March 2010. Why has it taken this long to achieve this deal?

M.E.: There were a number of sticking points, especially surrounding the pharmaceutical industry. The less developed countries in the pact wanted access to affordable medicine. The big pharmaceutical and giant bio-tech industries (mainly located in the U.S.) wanted to protect their drugs from cheaper imitations, known as biosimilars. They wanted protection for 12 years. In the end a compromise was reached — five years of market exclusivity in each country.

The D.O.: Democratic presidential candidate Hillary Clinton announced her opposition to the deal. What are the effects of the TPP deal for U.S. domestic politics?

M.L.: Trade deals are always fair game for domestic politics, and that is proper under our Constitution. Hillary Clinton faced a difficult choice in deciding to oppose the deal. Previously, she promoted the TPP while serving in the Obama Administration. Now, however, she faces strong opposition to further trade liberalization by many Democratic primary voters.

Published on October 12, 2015 at 10:06 pm

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