The Trans-Pacific Partnership

Total trade between the U.S. and each country party to the TPP [Vox]

What's happening?

The Trans-Pacific Partnership is a trade deal between countries bordering the Pacific Ocean, including the U.S., Canada, Japan, Australia, and Chile. After seven years of negotiations (!), the countries reached the current agreement this past month, on October 5th. The deal's overarching goal is to promote growth and development by lowering tariffs and other barriers to trade.


In June, Congress granted President Obama Trade Promotion Authority, known as "fast track" authority, to negotiate the deal. This authority commits Congress to a single yes-or-no vote on the agreement, with no amendments. The vote will likely happen this coming February, based on a four month waiting period for Congress to deliberate.

Why is this important?

First, this conversation is about more than the Pacific region. The deal parallels (and is seen as an example for) a proposed agreement between the U.S. and the European Union, called the Transatlantic Trade and Investment Partnership (TTIP) and expected in 2016.


Second, the TPP alone could have an enormous economic effect. Though tariffs between many Pacific nations are already kept low by previous deals like the 1994 Uruguay Round and North American Free Trade Agreement (NAFTA), the TPP could increase U.S. incomes by $77 billion per year (says the most commonly cited estimate.) Further, the TPP exports U.S. copyright laws, protecting U.S. industries from infringement.


Last, the TPP could be seminal for much more than Pacific trade. Trade agreements are now a vehicle for redefining the ways the global economy functions. In this case, significant areas include financial regulations, labor rights, climate change, copyright laws and innovation. The deal's effects in these areas are hotly debated—as we'll see below.

Debate It!

Should Congress approve the Trans-Pacific Partnership?


No. The TPP is a far too risky agreement that benefits primarily large multinational corporations, undermines the U.S.' ability to effectively enforce important regulations, and reduces competition in the market for life-saving prescription drugs. 


ISDS would allow foreign companies to challenge American regulations—and be compensated by taxpayers if they win. Worse, the conflicts are adjudicated not by independent judges but by corporate lawyers who are incentivized to keep their client relationships. No, the U.S. has not yet lost an ISDS case, but from 1959 to 2002, there were fewer than 100 ISDS claims worldwide. In 2012 alone, there were 58 cases. It's only a matter of time.


Further, the deal's patent protection clauses are the direct result of lobbying from the pharmaceutical industry to keep generic drugs off the market as long as possible. In doing so, the TPP will reduce competition and raise drug prices in the places they are needed most. That's why groups like amFAR oppose it; the TPP could damage global public health.


Beyond these two major concerns, the TPP is weak in its labor and environmental protections. Congress could—and should— reject this agreement and amend these areas to create a better deal.


Yes. The TPP betters not only the American economy but also global issues like financial regulation, innovation, climate change and more. Critics of the TPP focus primarily on investor-state dispute settlement (ISDS) and patent protection. But even in these, the TPP significantly improves the status quo.


ISDS is a process that mediates disputes between governments and investors. This is nothing new; the U.S. is party to more than 50 agreements involving ISDS. The U.S. has only had 13 cases brought against it, and has never lost. Most importantly, this deal is strongly in the public's favor; the TPP explicitly protects the government's right to regulate in the public interest. 


Patent protection, in this case, means both keeping life-saving medicines affordable and maintaining incentives for innovation. The TPP does exactly that. By eliminating tariffs on medicines, it will reduce the cost of many drugs. By requiring other countries to enforce copyright standards, the TPP protects American innovation and encourages it elsewhere.


In other areas less debated, the TPP also plays an important role. For example, it requires trading partners to protect labor rights and establishes the most comprehensive environmental commitments ever negotiated in a trade agreement.

Learn More...

  1. The complete text of the deal layed out on Medium
  2. The White House's comprehensive FAQ on the TPP
  3. Elizabeth Warren's op-ed opposing ISDS (and the administration's response)
  4. Vox's article on amFAR's opposition (and card stack on the issue)