A Hard Bargain

A Hard Bargain

The Trans-Pacific Partnership (TPP), a deal between America, Japan and ten other countries around the Pacific, was signed in February but is now struggling. On September 26th, Hillary Clinton and Donald Trump, the Democratic and Republican nominees for the American presidency, fought to distance themselves from it in their first televised presidential debate. Mr. Trump called the deal “almost as bad as NAFTA” (the North American Free Trade Agreement, which was signed in 1994 and which he sees as one of the worst things for American business).

The TPP is very controversial among the minority of Americans who have heard of it (a recent poll found that only 29% had heard of TPP and most Americans did not know that it does not include China). President Barack Obama wants to push it through in Congress at the end of this year. There he faces both partisan politics and real concerns over the deal.

TPP reduces some tariffs and quotas, such as those covering America’s imports of cars and Japan’s imports of beef. Since the deal includes many countries who are already in NAFTA, TPP focuses on non-tariff barriers: improving regulations, removing privileges for public enterprises, and protecting intellectual property. These barriers are more difficult to like and accept because they interfere domestic law. In TPP, foreign investors can sue national governments.

If TPP does not work, it would mean a decrease of American leadership in global trade liberalization. President Obama has advertised TPP as essential if America, not China, is to set the “rules of the road” for trade in the 21st century.

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