The United States is currently negotiating entrance into the Trans-Pacific Partnership (TPP) Agreement, an Asian-Pacific regional integration and free trade pact created in 2006 by Australia, Brunei, New Zealand, and Singapore. Chile, Malaysia, Peru, and Vietnam are also seeking to become members of this pact. Early signs indicate that negotiators intend to deliver at least the outline of an agreement by the time President Obama hosts the Asia Pacific Economic Cooperation (APEC) leaders’ meeting in Honolulu this coming November.
The TPP is important because it would help boost U.S. exports and strengthen U.S. commercial ties with this strategically and economically vital region. Yet the TPP is perhaps most important because it could be a model 21st century free trade agreement that fosters further global economic integration and raises the standard by which countries can conduct true, market-based trade.
The TPP can be such an agreement but will only become so if it holds nations who sign it to the very highest standards, including those regarding intellectual property (IP) rights protection, transparency and openness in government procurement practices, restrictions on preferential treatment toward state-owned enterprises (SOEs), transparent standards setting processes, comprehensive tariff reductions, elimination of a host of non-tariff barriers (NTBs), and at least equal, if not greater, emphasis on enforcement as on market access.
Unfortunately, in an apparent rush to meet an artificial deadline and achieve a victory on trade, the Obama Administration is not currently insisting on a gold-standard agreement that comprehensively eliminates beggar-thy-neighbor mercantilist practices and that precludes countries employing such practices from joining. Indeed, as this report documents, a number of the United States’ would-be TPP partners continue to employ mercantilist practices and several have pushed to weaken the TPP’s standards, including those with regard to IP protection, elimination of NTBs, government procurement regulations, etc.
The risks of signing a water-down agreement are significant. Whatever provisions s the United States agrees to with respect to IP, treatment of SOEs, removal of NTBs, and other items in the TPP will set a precedent establishing the baseline for future trade