What is it?
The Trans-Pacific Partnership (TPP) is a group of 12 nations working towards better economic union through a trade agreement. The TPP works by reducing tariffs on goods and moving towards an environment where economic regulations and policies are similar, reducing costs of trade.
Why is news worthy?
Firstly, this is a huge agreement. The twelve countries involved make up 40% of world trade and encompass a population of 800 million people. By fostering economic unity between these countries we will see an improvement in global economic growth and trade, just by the sheer size of the deal.
Secondly, China has been left out of the agreements. This isn’t necessarily because of any tension but because the deal is, in part, supposed to tackle China’s dominance in the region (source).
Thirdly, an agreement reached on TTP suggests focus can be shifted, and an agreement can be decided, on TTIP (Transatlantic Trade and Investment Partnership) between the US and the EU (source).
TPP will reduce tariffs and costs for USA companies and other member corporations. An example of this is Nike who will benefit from the importation of the shoes made abroad, as 98% of tariffs are set to be reduced. Prices will either fall, or the corporations can keep prices stable and increase profits.
Furthermore the reduction in red tape and increasing unity in economic policy will further develop trade between the member states and it is also argued that working conditions in countries, such as Vietnam, will be improved by a better economic environment.
A few people have pointed back to the Nafta agreements in 1994, arguing that in the post-Nafta era 700,000 jobs in the USA were lost and over 60% of these jobs were in manufacturing. Individuals are also arguing that this deal was struck purely at the benefit of large corporations and will have a direct effect on jobs and wages.
Julian Assange from Wikileaks has this to say about TPP: “If you read, write, publish, think, listen, dance, sing or invent; if you farm or consume food; if you’re ill now or might one day be ill, the TPP has you in its crosshairs”
Let’s bear in mind, the agreement hasn’t been signed yet.