Trans-Pacific Partnership



Amadeo(2015) defines or TPPA as the agreementmade by nine countries aimed at liberalizing investment and tradeacross the Asia Pacific countries through free trade. The mainobjective of the TPP entails reducing the tariff and non-tarifflimitations to raise investment and trade. The negotiations for TPPAstarted in the APEC (Asia-Pacific Economic Cooperation) meeting in2002 between Singapore, New Zealand, and Chile. The agreement becameinstrumental in encouraging the United States to join the tradenegotiations and integrate the country into the Asia-Pacific statesto challenge rival countries, such as China that developed tradeaffiliations with local trade enterprises. The TTPA benefited theUnited States geopolitically, such as the growing Chinese influenceand power in the region. Mexico and Canada joined the agreement in2012 in Auckland. Canada aimed at strengthening its businessviability in the Asia-Pacific region and intensifying its foothold.In 2013, Japan entered the negotiations bringing the overall numberof nations in the agreement to 12 namely Vietnam, Japan, Brunei,Malaysia, the United States, Canada, Australia, New Zealand, Peru,Chile, Mexico, and Singapore (Arne, Ashley, and Ronald, 2015).Despite the advantages and disadvantages of The Trans-PacificPartnership, some people support its implementation while othersstand against its introduction.

Argumentsfor TPPA

Thereare several benefits associated with TPP for the United States andthe other members. First, the agreement expands trade between Americaand the current FTA (free trade agreements) members. The UnitedStates as speculated by Kelsey (2011) possesses the prospects ofincreasing local goods and services with different FTA members andguarantee competitiveness, free, and rule-based. The six FTA membersinclude Singapore, Peru, Mexico, Canada, Australia, and Chile (Guoyouand Wen, 2012). Therefore, these countries will produce significanttrade for both goods and services. The United States startedbenefiting from the free trade in 2013 where the exports amounted to$612.1 billion in products, such as motor vehicles, coal, andpetroleum products, including motor vehicle parts sent to the FTApartners. The goods accounted for about 39% of goods exportedinternationally. At the same time, America exported about $127.3billion value of services, such as port services, passenger fares,and travel services to the FTA partners in 2013, hence, making upabout 19% of the services exported internationally.

Implementingthe TPPA will facilitate the 12 countries to support the trade usingthe 21st-century business regulations (Maribel, 2015). For example,the negotiations offer an opportunity to develop these goods andservices and tackle several crucial limitations impeding exports tothe FTA countries. The United States will benefit from the TPPA asthe manufacturers will buy the necessary inputs to manufacturecompetitive goods. The TPP nations provide 64% imports, such asmachinery, raw materials, and components, amongst other productsutilized to manufacture products and grow crops in America. Forexample, Mexico and Canada provide significant supply chains wherebythe United States imports 60% and 71% of the goods respectively.Therefore, the TPPA will facilitate the international supply chainsand promote trade with existing bilateral FTA nations.

Secondly,the FPPA open fresh marketplaces in non-FTA nations. The 11 countriesthat signed the FPPA and were FTA partners will have a chance topenetrate new markets for their goods and services. The non-FTApartners include Vietnam, Malaysia, Brunei, New Zealand, and Japan.The five countries boast an overall 252 million citizens and a sharedeconomy of $5.6 trillion, hence, having the prospect of becomingvibrant marketplaces for different exports. Furthermore, Americamaintains ties with some of these nations. The country exportedapproximately $87 billion and $51.1 billion goods and servicesrespectively in 2013 to the latest FTA TPPA nations (Mary, 2014).Unfortunately, American manufacturers currently experienceunreasonable levies and further obstacles when exporting some goodsto these nations. Additionally, the TPPA offer an opportunity toremoving the hurdles and raising the American exports. They couldalso increase the number of American manufacturers benefiting fromthe trade since the new FTA TPPA nations purchase various products.

Thirdly,the TPPA strengthens the investment relations between the TPPeconomies and the United States. Corporations with headquarters inthe TPP states have bestowed $660 billion of investments in theUnited States resulting in the employment of over 1.6 millionAmericans (Office of the United States Trade Representative, 2015).Over 17,000 American organizations are ancillaries of corporationslocated in the TPP nations – acting as a significant foundation ofjob formation and business investment. However, the TPPA will inspireTPP states to increase their business investment in America, supporteconomic development, and increase job opportunities in the countryby eradicating barriers and fortifying partnerships.

Argumentsagainst TPPA

Thereare several disadvantages associated with the Trans-PacificAgreement. First, the agreements will encourage income inequalitywhere workers earning over $88,000 annually will benefit from theagreement than those earning less (Ostrovsky, 2011). Furthermore,free trade agreements motivate income disparity in high-wage nationsby supporting cheaper products from developing/low-wage nations.Developing nations will have reduced capital to grow their economiesbecause of the exploitation by the developed countries.

Second,the free trade agreements will safeguard copyrights and patents,hence, allowing highly-paid proprietors of the intellectualproperties to obtain extra income benefits. At the same time, theagreement about patents will decrease the available cheap genericsand make drugs expensive.

Cutthroatbusiness demands will decline the Asian incentives to safeguard theenvironment. According to Amadeo (2015), countries will be morefocused on making profits rather than protecting the flora and faunawithin them. They will overlook the laws requiring them to createproper waste disposals due to lack of proper rules put in place tofollow.

Thirdly,eliminating the regulations, levies, and standards will disadvantageChina. Amitendu (2015) maintains that the increased exports anddemand for the Chinese goods and currency will reduce the importsbecause China will start selling products from the TPP partners,thus, affecting its economic welfare. Du (2015) argues that theChinese imports will suffer since the TPP members will prefer doingbusiness with one another and this will give China fewer goods toimport at reduced costs.

Inconclusion, plays a major role of openingcountries to new markets worldwide. It increases the local goods andservices within various FTA members and guarantees competitiveness,free, and rule-based trade. TPP strengthens the investment bondbetween FTA and non-FTA countries. Therefore, countries will be ableto improve the livelihoods of their citizens. The agreement will alsofoster better relationships that will create world peace. Therefore,countries across the world should support the TPP to facilitatebetter investment ties, open new markets for their manufacturers, andexpand the trade of goods and services. However, companies operatingin these countries must comply with the international tradeprinciples that safeguard the environment and employees.Additionally, workers should be allowed to join trade unions thatfight for their rights and prevent income inequalities.


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Guoyou,S. &amp Wen, J. (2012). China`s Free Trade Agreement Strategies. TheWashington Quarterly, 35(4),107-119.

Kelsey,J. (2011). NoOrdinary Deal: Unmasking the Free TradeAgreement. Montauk,NY: CrowsNest.Maribel,R. (2015). : Add Conservation to US TradeAgreement. Nature,523 (7561), 410.Mary,B. (2014). Agriculturein the .Collingdale: DIANE Publishing Company. 39-44.Officeof the United States Trade Representative. (2015). FACT SHEET:Transparency and the . Retrieved from,O. (2011). No Ordinary Deal: Unmasking the Free Trade Agreement. AucklandUniversity Law Review,17(1), 332-337.