In November 2011, former Secretary of State Hillary Clinton wrote an op-ed piece for Foreign Policy magazine declaring that the future of politics will be decided in Asia, not the Middle East, thus declaring it imperative that the U.S. pivot its economic, political, diplomatic, and strategic resources and investments to the Asia-Pacific region. If this transformation of policy and perspective should come to fruition, then the negotiated Trans Pacific Partnership (TPP)-essentially a free trade agreement-is not only fundamental, but virtually necessary if the U.S. were to succeed in cementing its presence not only in the East, but also the Pacific region.
As emerging markets have become the hottest flavor of the month-or the 21st century-the concentration of these new booming developing markets are undoubtedly in Asia. For what it is worth, Latin America can be considered a distant second in categorizing popular emerging market destination, but it still pales in comparison to Asia when evaluating economic strength, education, and innovation. The TPP has presence in both aforementioned regions and beyond, facing many geographic trade flows, covering extensive land and penetrating an array of diverse markets. As of now, it consists of 11 members: Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam. With this current roster, it has a market of approximately $25 trillion and encompassing roughly 800 million people. However, in Mid-April 2013, a politically and economically powerful participant has joined the fold at the table of the TPP negotiations: Japan.
Currently Japan is the world’s third largest economy, and its GDP exceeds the amount of the combined total of all the other TPP nations, not including the U.S. If Japan were to be approved admittance by all existing members (the U.S. has okayed its participation in the negotiation process), the TPP bloc would account for almost 40 percent of global GDP and one-third of world trade. As Japanese Prime Minister Shinzo Abe suggested, “Japan could either be part of a global trend towards more open trade, or it could retreat into isolation.” Recent actions have indicated that Japan has opted for the former, with an added presupposed motive that Japan perceives the TPP as a vehicle to counteract China’s economic rise and influence in the region.
What exactly is the TPP? To start, the TPP was originally concocted by New Zealand, Chile, Singapore, and Brunei in 2005, calling it the Trans-Pacific Strategic Economic Partnership Agreement. Fast-forward to 2008, the U.S. requested and eventually became an official participant in the negotiations with the founding members, and after that, the other existing members saw the potential-and the rest is history. The goal of the TPP is to remove all tariffs on trade between member states, and focus on new emerging trade spheres of influence such as investment, labor and environmental standards, government procurement, agriculture, intellectual property, and state-owned businesses. The trade bloc has aroused interest from many other countries, such as Colombia, Costa Rica, Laos, Taiwan, and the Philippines. Just imagine if they all were to join, the implications would be outstanding, outmaneuvering BRICS-Brazil, Russia, India, China, and South Africa-with an extra incentive to either participate directly or indirectly, or expedite solidarity and quickly implement real institutional reforms. To make matters more appealing, after the inclusion of Japan, experts predict South Korea will soon express interest in joining the TPP. In short, free trade among nations is still a robust want and need, rebutting the notion that protectionism remains a viable alternative.
However, the TPP does face many obstacles abroad and in the U.S. For instance, in the U.S. there must be a strategic plan by the executive administration and the private sphere to win over certain domestic opposition. In addition, it is important that trade leaders address domestic critics (and abroad if possible) on intellectual property demands. Right now, the interpretation of the limited information that the public has is that the TPP will enforce policy that will make it a criminal act if copyright and patent laws were violated. Moreover, transparency of the negotiation process has been under attack by U.S. Congressional leaders, not to mention the public, arguing that the TPP summits are held in secrecy with minimal information leaked to the public. It must be noted, that absolutely no trade deal in the U.S. or abroad is enacted without much resistance, i.e. NAFTA and the 2012 Free Trade Agreements between the U.S. and Colombia and South Korea. Thus, although they are major obstacles, it should not be enough of a deterrent to erode the execution of the TPP.
Ironically, the TPP is seldom debated and discusses in the news media cycle. Many have pinpointed this lack of attention to President Obama’s administration lack of emphasis on trade and economic influence in Asia and Latin America. For example, Senator McCain has described President Obama’s record on trade as “shameful” and too slow, especially with the TPP, Taiwan, and India. Although under President Obama, trade pacts with Colombia, South Korea, and Panama were finalized, the majority of the credit is given to former President Bush, who ignited the free trade agreements. However, as mentioned previously, pivoting U.S. attention to Asia and away from the Middle East and Europe is through and through an Obama initiative, shouldering the likelihood of determining his foreign policy legacy. Moreover, President Obama has focused his attention to free trade, exerting extra energy to the TPP and beginning the talks to a potential unprecedented U.S.-EU trade liberalization.
But for President Obama and the U.S., the stakes are higher. The TPP opens the door to dramatically increase exports to Asia, especially to tariff-ridden Japan. As a result, more jobs can be created and politically speaking, it can reinvigorate U.S. influence in the Asian and Latin American region, ridding the thorns of the often spoken U.S. decline. Also, the TPP can be introduced as a re-vindication of free market capitalism, countering the growth and increasing influence of state-run capitalism spearheaded by China. In short, the TPP is a game changer for all the member states, harnessing the recipe of the being—the most transcending free trade pact of the 21st century, especially for the U.S.
This article was originally published in the 2013 special annual APEC CEO Summit Magazine. Published with permission.
Photo: Lucas Jans (cc).
a global affairs media network
Pacific Sunrise
October 6, 2013
In November 2011, former Secretary of State Hillary Clinton wrote an op-ed piece for Foreign Policy magazine declaring that the future of politics will be decided in Asia, not the Middle East, thus declaring it imperative that the U.S. pivot its economic, political, diplomatic, and strategic resources and investments to the Asia-Pacific region. If this transformation of policy and perspective should come to fruition, then the negotiated Trans Pacific Partnership (TPP)-essentially a free trade agreement-is not only fundamental, but virtually necessary if the U.S. were to succeed in cementing its presence not only in the East, but also the Pacific region.
As emerging markets have become the hottest flavor of the month-or the 21st century-the concentration of these new booming developing markets are undoubtedly in Asia. For what it is worth, Latin America can be considered a distant second in categorizing popular emerging market destination, but it still pales in comparison to Asia when evaluating economic strength, education, and innovation. The TPP has presence in both aforementioned regions and beyond, facing many geographic trade flows, covering extensive land and penetrating an array of diverse markets. As of now, it consists of 11 members: Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam. With this current roster, it has a market of approximately $25 trillion and encompassing roughly 800 million people. However, in Mid-April 2013, a politically and economically powerful participant has joined the fold at the table of the TPP negotiations: Japan.
Currently Japan is the world’s third largest economy, and its GDP exceeds the amount of the combined total of all the other TPP nations, not including the U.S. If Japan were to be approved admittance by all existing members (the U.S. has okayed its participation in the negotiation process), the TPP bloc would account for almost 40 percent of global GDP and one-third of world trade. As Japanese Prime Minister Shinzo Abe suggested, “Japan could either be part of a global trend towards more open trade, or it could retreat into isolation.” Recent actions have indicated that Japan has opted for the former, with an added presupposed motive that Japan perceives the TPP as a vehicle to counteract China’s economic rise and influence in the region.
What exactly is the TPP? To start, the TPP was originally concocted by New Zealand, Chile, Singapore, and Brunei in 2005, calling it the Trans-Pacific Strategic Economic Partnership Agreement. Fast-forward to 2008, the U.S. requested and eventually became an official participant in the negotiations with the founding members, and after that, the other existing members saw the potential-and the rest is history. The goal of the TPP is to remove all tariffs on trade between member states, and focus on new emerging trade spheres of influence such as investment, labor and environmental standards, government procurement, agriculture, intellectual property, and state-owned businesses. The trade bloc has aroused interest from many other countries, such as Colombia, Costa Rica, Laos, Taiwan, and the Philippines. Just imagine if they all were to join, the implications would be outstanding, outmaneuvering BRICS-Brazil, Russia, India, China, and South Africa-with an extra incentive to either participate directly or indirectly, or expedite solidarity and quickly implement real institutional reforms. To make matters more appealing, after the inclusion of Japan, experts predict South Korea will soon express interest in joining the TPP. In short, free trade among nations is still a robust want and need, rebutting the notion that protectionism remains a viable alternative.
However, the TPP does face many obstacles abroad and in the U.S. For instance, in the U.S. there must be a strategic plan by the executive administration and the private sphere to win over certain domestic opposition. In addition, it is important that trade leaders address domestic critics (and abroad if possible) on intellectual property demands. Right now, the interpretation of the limited information that the public has is that the TPP will enforce policy that will make it a criminal act if copyright and patent laws were violated. Moreover, transparency of the negotiation process has been under attack by U.S. Congressional leaders, not to mention the public, arguing that the TPP summits are held in secrecy with minimal information leaked to the public. It must be noted, that absolutely no trade deal in the U.S. or abroad is enacted without much resistance, i.e. NAFTA and the 2012 Free Trade Agreements between the U.S. and Colombia and South Korea. Thus, although they are major obstacles, it should not be enough of a deterrent to erode the execution of the TPP.
Ironically, the TPP is seldom debated and discusses in the news media cycle. Many have pinpointed this lack of attention to President Obama’s administration lack of emphasis on trade and economic influence in Asia and Latin America. For example, Senator McCain has described President Obama’s record on trade as “shameful” and too slow, especially with the TPP, Taiwan, and India. Although under President Obama, trade pacts with Colombia, South Korea, and Panama were finalized, the majority of the credit is given to former President Bush, who ignited the free trade agreements. However, as mentioned previously, pivoting U.S. attention to Asia and away from the Middle East and Europe is through and through an Obama initiative, shouldering the likelihood of determining his foreign policy legacy. Moreover, President Obama has focused his attention to free trade, exerting extra energy to the TPP and beginning the talks to a potential unprecedented U.S.-EU trade liberalization.
But for President Obama and the U.S., the stakes are higher. The TPP opens the door to dramatically increase exports to Asia, especially to tariff-ridden Japan. As a result, more jobs can be created and politically speaking, it can reinvigorate U.S. influence in the Asian and Latin American region, ridding the thorns of the often spoken U.S. decline. Also, the TPP can be introduced as a re-vindication of free market capitalism, countering the growth and increasing influence of state-run capitalism spearheaded by China. In short, the TPP is a game changer for all the member states, harnessing the recipe of the being—the most transcending free trade pact of the 21st century, especially for the U.S.
This article was originally published in the 2013 special annual APEC CEO Summit Magazine. Published with permission.
Photo: Lucas Jans (cc).
