After more than five years of negotiation, the United States and five Asia-Pacific nations reached a potentially transformative trade deal last week that once again puts this country at the forefront of the global economy.
The Trans-Pacific Partnership, or TPP, includes countries that account for 40 percent of the world economy. That alone makes the effort worthwhile, even if the details remain unknown. It is the biggest international trade deal ever negotiated, and probably the most complicated, containing more than 30 chapters on a bewildering array of trade issues, from patents to wildlife protection.
Until the full text is published — President Obama said it would be “soon” — precedent suggests it’s best to withhold a full embrace of the agreement. But what we do know at this point is that the deal has a number of advantages for American workers and consumers.
The proposal will end 18,000 tariffs on American products across the board, including automobiles, machinery, information technology and consumer goods. That will not only make it easier for U.S. products to compete in the vast area covered by this agreement, but it also will open new markets previously closed to U.S. goods. And that, in turn, leads to job creation inside U.S. borders and reduces the attraction of off-shoring jobs.
Digital Access For Only $0.99
For the most comprehensive local coverage, subscribe today.
Previous agreements have been criticized for shortchanging labor and environmental standards, effectively giving other countries a pass even while the United States stayed true to higher standards. This one, Mr. Obama promised, attempts to learn from past mistakes by adding enforceable new provisions.
Thus, in what is probably a first, the measure won strong praise from environmentalists because it requires the pact’s signers to abide by existing treaties on the environment and also places new limits on wildlife trafficking and subsidies for illegal fishing. “We see this as a very big deal,” said David McCauley, an official of the World Wildlife Fund.
In an interview Tuesday, Mr. Obama conceded that TPP alone would not raise labor standards in countries like Vietnam to U.S. levels overnight, but it requires signatories to ban child labor in those countries where this abhorrent practice still exists and allow workers to form independent unions.
We know that the agreement is not perfect. There are no binding provisions on currency manipulation, for example, and some consumer groups say it will impede access to affordable medicines in some countries because of provisions covering patent medicines and generic counterparts.
But as the pact moves forward — it requires approval from Congress — Mr. Obama should lead the way in keeping the focus on the big picture. Ninety-five percent of the world’s consumers live elsewhere. The United States cannot afford to build a moat around its borders, so it must be out front in fashioning trade agreements with enforceable provisions that work to U.S. advantage.
The geopolitical dimension of TPP is as important as the economic impact. A failure to negotiate any agreement would have been a setback for U.S. credibility around the world because this country, as a leading trade nation, is seen as a major beneficiary. In addition, it strengthens the U.S.-Japan alliance that acts as a counter-weight to the growing influence of China in the region and reinforces U.S. influence in an increasingly important part of the world.
No doubt, the pact will become fodder during the presidential campaign. Candidate Hillary Clinton has already registered her disapproval of TPP. Fair enough, as long as she and other candidates stick to the facts instead of indulging in phony scare tactics. If the pact lives up to Mr. Obama’s promises, it will bolster the U.S. economy and America’s position around the world.