The TPP Is Finalized: 5 Things You Should Know About The Trans-Pacific Partnership


The TPP–also known as the Trans-Pacific Partnership–is the type of complex legislation that resists commentary and tends to fly under the radar. The consensus at the Wall Street Journal is that TPP is going to pass through Congress easily, which in and of itself should garner the interest of the commentariat. But trade deals tend to be indigestible and difficult for the public to understand. So we’ll try to make this as simple as possible.

Negotiations were finalized on Monday–whether or not the Trans-Pacific Partnership will pass through Congress and the Senate remains to be seen, although apparently Republicans have agreed to fast-track the bill.

    1. What is the TPP?
      The Trans-Pacific Partnership–also known as the TPP–is a trade agreement being brokered between 12 countries–some have compared it to NAFTA, CAFTA or the PNTR. Democratic proponents of the deal tend to downplay those types of comparisons but they can hardly deny that TPP is, in fact, a big, fat free trade agreement with a group of Pacific nations.

      Note that China doesn’t appear on the list, but pretty much every other major industrial presence in the Pacific is. What’s up with that? Beijing wants in to the TPP, but for the time being the U.S. is working on a more basic trade treaty with China. President Barack Obama argued that the TPP will put pressure on China and other fast-growing Asian countries to accept American-influenced business regulations—not China’s rules. Watch the video below to Obama making this argument.

    2. It’s unclear whether or not TPP will generate jobs in the U.S. or send more jobs overseas.
      Supporters of the TPP claim that removing tariffs on US goods flowing into Pacific countries makes this deal attractive and beneficial to American industry and manufacturing–since tariffs on goods flowing into American have already–by and large–been removed. Bernie Sanders and labor organizations like the AFL-CIO don’t agree with this interpretation of the TPP–they say it’s going to hurt American workers if it passes in its present form.
    3. The TPP includes regulations on patents and the production of pharmaceuticals.
      <em>Photo courtesy of <a href="http://www.takepart.com/photos/most-expensive-prescription-drugs-us/high-cost-good-health">TakePart</a></em>
      Photo courtesy of TakePart

      The aspect of the Trade Agreement that most people seem the most upset or stressed-out about has to do with the enforcement of patents of medications and “biologics.” Some think that the provisions about patents on medications will make medication more expensive and slow down innovation. For example, innovative biologics will be protected against generic imitators for a bare minimum of five years and potentially several years more, depending on the final language and how national regulators implement the rules.
    4. Others say that these provisions are modest and reasonable. For example, biologics are protected for 12 years in the US. Paul Krugman claims that Big Pharma is “mad” about these shortened patent cycles.The whole issue of whether or not the provisions in the TPP about medicine and patents will be more helpful to ailing consumers or Big Pharma reamins unclear since the actual text of the TPP is secret and cannot be accessed by anyone outside of a few buildings in the Capitol.
    5. The TPP contains provisions that are meant to ensure fair labor practices and environmental regulation in countries where labor and environmental regulations did not previously exist.
      JAINTIA HILLS, INDIA - APRIL 16: A boy works at a coal depot on April 16, 2011 near to Lad Rymbai, in the district of Jaintia Hills, India. Local schools in the area, providing free tuition, find it difficult to convince parents of the benefits of education, as children are seen as sources of income. The lure of the mines is stronger than that of the classroom. The Jaintia hills, located in India's far North East state of Meghalaya, miners descend to great depths on slippery, rickety wooden ladders. Children and adults squeeze into rat hole like tunnels in thousands of privately owned and unregulated mines, extracting coal with their hands or primitive tools and no safety equipment. Workers can earn as much as 150 USD per week or 30,000 Rupees per month, significantly higher than the national average of 15 USD per day. After traversing treacherous mountain roads, the coal is delivered to neighbouring Bangladesh and to Assam from where it is distributed all over India, to be used primarily for power generation and as a source of fuel in cement plants. Many workers leave homes in neighbouring states, and countries, like Bangladesh and Nepal, hoping to escape poverty and improve their quality of life. Some send money back to loved ones at home, whilst many others squander their earnings on alcohol, drugs and prostitution in the dusty, coal mining towns like Lad Rymbai. Some of the labor is forced, and an Indian NGO group, Impulse, estimates that 5,000 privately-owned coal mines in Jaintia Hills employed some 70,000 child miners. The government of Meghalaya refuted this figure, claiming that the mines had only 222 minor workers. Despite the ever present dangers and hardships, children, migrants and locals flock to the mines hoping to strike it rich in India's wild east. (Photo by Daniel Berehulak/Getty Images)
      Photo by Daniel Berehulak/Getty Images

      It would be great for American workers if countries like Malaysia and Vietnam were forced to implement a minimum-wage since that would make American labor more competitive. Seeing as how climate change effects everyone, it would also be good if some of these less developed countries were forced to implement environmental regulations. Unfortunately, we don’t know any of the details about what the TPP says about labor and environmental regulations, or if it includes provisions that would allow such regulations to be enforced.

    6. There are some provisions of the agreement that are intended to protect auto-workers in the United States.
      NINGBO, CHINA - JUNE 9: A Chinese labourer works on an assembly line at the Zhejiang Geely Automobile Co. auto factory on June 9, 2005 in Ningbo, Zhejiang province, China. China's auto market is expected to see stable growth this year. Auto sales in the first four months rose 1.57 percent from a year earlier to 1.8 million units and auto output grew 1.48 percent to 1.86 million units, according to the China Association of Automobile Manufacturers (CAAM). (Photo by Guang Niu/Getty Images)
      Photo by Guang Niu/Getty Images

      According to senior officials familiar with the details of provisions in the Trans-Pacific Partnership, the U.S. will maintain existing tariffs on Japanese cars for 25 years and truck tariffs for 30 years under the TPP. However, tariffs on auto parts are likely to drop much sooner than that–if not immediately. Erasing the existing system of tariffs on auto-parts being shipped from Asia is likely to put the squeeze on American part-manufacturers.

[Image via Getty Images]

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