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The Trans-Pacific Partnership (TPP) Explained

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

service.

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

trading partners.

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

more aggressively.

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

class.

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.