trans-pacific partnership

What’s The Deal With The Secretive Trans-Pacific Partnership?

A massive trade agreement between the U.S., Japan, Australia, and nine other Pacific countries has been reached but still requires the approval of Congress.

Called the Trans-Pacific Partnership (TPP), the deal includes countries that together produce 39% of the world’s gross domestic product, and whose populations total 793 million people, according to the United States’ embassy website.

The countries involved are the U.S., Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Singapore, Malaysia, Vietnam and Brunei.

Discussions have been ongoing for a decade (although the U.S. only joined in 2009). Not much is known about the details of the deal, however, as all parties have signed a confidentiality agreement that keeps the deal secret.

Update: The full text  of the Trans-Pacific Partnership is here, on the official US government site. 

Select lawmakers were allowed to view the agreement while it was in progress, as well as 16 “advisory councils,” which  featured revolving-door lobbyists from industries such as entertainment and pharmaceuticals, the Washington Post reports.

Potential benefits

  • Lower tariffs and more trade will produce a global income benefit of $223 billion per year by 2025, of which the U.S. will gain $77 billion, according to the U.S. Trade Representative.

  • Exports from the U.S. will increase by $124 billion, according to the Peterson Institute, decreasing the U.S. trade deficit

  • Foreign investment in U.S. companies would also increase by $169 billion, the Peterson Institute states

Potential downsides

  • Intellectual property (IP) rights are featured prominently in the deal, according to a 95-page chapter draft leaked on Wikileaks in 2013 (the treaty has 29 chapters in total).

  • This could lead to treaty countries creating harsh anti-piracy laws, for instance making it a crime to share a BitTorrent file, even if no one downloaded it, according to Ars Technica.[contextly_auto_sidebar id=”WOaVIu3k0HTa8U6PMfsfKMYQ7asSMVdk”]

  • IP laws could also make it more difficult for generic drug makers to gain approval for their products, raising the price of medicine, according to the Washington Post.
  • The treaty would also expand investor-state dispute resolution mechanisms, which allow companies to sue governments directly for failing to follow the treaty. Many worry that this will lead to a chilling effect on domestic regulation, discouraging governments from regulating products for fear of being sued, the Washington Post reports.

Some, such as the libertarian think-tank The Cato Institute, have also wondered whether the treaty is necessary in the first place. Many of the countries involved already have free trade arrangements with the U.S. already, such as Mexico and Canada (NAFTA), Australia, and Chile.

The pro-TPP Peterson Institute writes in their working paper that the economic benefits to the United States will be “modest”. However, big American businesses stand to gain from intellectual property protection and investor-state dispute resolution.

The U.S. government, meanwhile, stands to gain an influence in the region against the pink elephant in the room – China.

By leaving the agreement open-ended, the U.S. also hopes to attract more countries to join the deal, its influence working as a counterweight to Chinese hegemony.

The US Congress will vote on the plan in the spring of 2016. However approval may become mired in politics, according to some observers.


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Ole Skaar