Today we’re going to take a look at the Trans-Pacific Partnership, potentially the
largest trade deal in history, also known as the TPP. There are so many little points
to negotiate that talks have been ongoing for over ten years. The 12 countries involved
are looking to strengthen their economies by linking them together. And they’re already
pretty strong, accounting for a combined 40% of global GDP.
If it goes into full effect, it will build on and supersede a network of past trade deals,
like the North American Free Trade Agreement between Canada, the United States, and Mexico.
MEDIA: WP - Fig. 2
Trade between nations will be boosted by eliminating many tariffs and other methods countries often
use to protect domestic industries from outside competition. Examples of protected markets
are beef and cars in Japan, the dairy and sugar industries in the United States, and
state-owned enterprises like Chile’s largest copper company and the Vietnamese telecommunication
Along with eliminating barriers to trade, to create a fair playing field for competing
businesses, all countries involved will have to meet certain negotiated standards, like
environmental protections that ban trading in endangered species and illegal logging,
or enhanced labor standards like the right to form a union, the abolition of child labor,
and banning workplace discrimination.
The Obama administration is incentivizing governments to create more responsible social
policies in exchange for stronger economic ties with America and some of its closest
At home, Obama has received pushback from Democrats in Congress concerned the deal would
be bad for American workers. They want guarantees the US will enforce rules preventing foreign
companies from flooding the US market with goods and services that undercut products
made in the good ‘ole USofA.
Another big criticism is that certain proposed patent and copyright rules in the deal could
keep the cost of medicine around the world higher than it should be.
Some say the North American agreement negotiated by President Clinton resulted in the loss
of hundreds of thousands of American jobs. That may be true, but in the six years after
NAFTA was enacted, the United States created 2 million jobs each year. It seems NAFTA helped
retool the US economy to produce more higher value goods and services, and that the TPP
would continue this trend.
And by opening new international markets to service and high tech businesses in the United
States, already a huge source of private job growth in the US economy should expand even
Projections have the TPP increasing American economic output by more than 100 billion dollars
a year. But mo money, mo problems. One of the biggest challenges has been to make sure
income gains through globalization are spread to all Americans, instead of the top, investing
The elephant in the room in all of this China, which isn’t involved in the talks. That’s
because one of the main objectives of the deal is to offset the power of China by strengthening
North America’s connection to several of China’s neighbors.
The deal has been crafted in a way to eventually include others like South Korea, Indonesia,
and the Philippines, Taiwan, Laos, Columbia and Thailand.
But until then, an initial agreement still must be finalized among the first 12 countries
involved, with the legislature of each country needing to pass a vote to accept the TPP’s
terms and ratify their membership.
If successful, a TransAtlantic Partnership with the Europeans would follow. That could
boost US-EU trade by more than 50%.
Thanks for watching. If you learned a bit about the TPP, hit that like button to help
share this video with others like you.
You can watch more TDC such as our ranking of the 10 best presidents in American history
or our video comparing the Parliamentary and Presidential forms of government.
And if you want to learn a lot more about economics and wealth inequality around the
world, a great place to start would be with the audiobook “Capital in the Twenty-First
Century,” by economist Thomas Piketty. Follow the link below to download this book for free
by signing up for a 30-trial at Audible.com.
Until next time, for TDC, I’m Bryce Plank. This video was edited by Brendan Plank.