Trans-Pacific Partnership Agreement (TTP)
Signing the Trans-Pacific Partnership Agreement was the initiative of the American President Barack Obama. Becoming the member of the partnership was an economically-necessary and efficient step for the U.S. The Agreement could assist the country to ensure the competitiveness in future and obtain a number of advantages based on the economic dynamism of Asia, which is generally perceived as the engine of global growth.
Trans-Pacific Partnership Agreement and the U.S.
The American participation in the Agreement could provide the country with a number of negotiating priorities. The TPP main objective was to establish the extensive modern pattern for the efficient economic partnership. It presupposes working on more areas than is assumed by the WTO and considers such economic activities, which assist to advance the level of economy. Barack Obama emphasized that the Agreement provides more chances for growth to the small business organizations. Moreover, it presupposes provision of the comparable advantages to the American FTAs, and strengthening the linkage with Asian countries. It has to be assumed that nearly the third of the world’s expanding countries is within the APEC economies. It means that the U.S. could gain many benefits from the cooperation with Asian-Pacific countries as it will assist the country to complement the foreign policy interests.
Advantages of the TPP
President Obama tried to convince the population in the advantageousness of the Agreement, because it is of primary importance for the targets of the country. His campaign presupposed doubling the exports by 2014 and creating a number of additional working places within the country in order to resolve the unemployment problem. The participation might become extremely efficient from the economic viewpoint, as it could assists in reducing the tariffs and creating new trade bloc for the U.S. (Gross, 2012, p. 168). Researcher Gross considers that the Agreement expands the access for goods and services and will help make the American trading chains more efficient. It is generally considered that participants of the Agreement will engage in active international trade, and have an opportunity to gradually integrate themselves into the Asian products chain. Moreover, it will help the U.S. maintain its control over the Pacific area. In general, obtaining new trade routes is always effective, as it improves the international relations and increases the economic profit of the country. Moreover, the participation will provide the U.S. an opportunity to block China.
Barack Obama emphasized that nearly 95% of the potential customers live outside the borders and prevent China from establishing the rules of global economy. In addition, the Agreement could provide America a chance to set their standards of trade, protect its employees, and conserve the environment. Blocking China is currently very necessary, as the country has overfilled the whole world with its low-quality products. Unfortunately, the low cost of such items distracts the customers from the qualified things made in the U.S. and increases the sales. Creating business competition for China will assist the countries in achieving success in economic sectors.
It is considered that since the start of the partnership, approximately 18 thousand dollars of taxes will be cancelled. The Canadian market will open to the U.S. dairy products’ manufacturers and thus increase the income of the American farmers. Moreover, the American meat produces will expand the supplies by including the Japan into their list of importers. It is hoped that all the sides will obtain a number of benefits from the partnership. The most essential thing in the current case is a possibility of new market creation with its opportunities, and possibility of cancelling current barriers.
William Mauldin in the article “U.S. Reaches Trans-Pacific Partnership Trade Deal With 11 Pacific Nations” (2015) discusses the advantages, which the U.S. might obtain in the course of the partnership. The author emphasizes the positive changes in agricultural market and also development of the intellectual property rules. As a result of it, drug and technology companies will achieve a number of alterations.
Since 2007, the United States demanded inclusion into the Agreement the provisions, which concerned the standards for protection of the environment and labor market in trade negotiations. A number of people skeptically perceived the introduction of such standards. Nevertheless, the U.S. claims that the TPP will assist in reducing the illegal transportation of dangerous goods. Moreover, the authority of the country states that the participation will lead to solution of other important issues between the TPP member countries.
It should be also emphasized that new standards, introduced by the Agreement, will cause the significant changes in such countries as Vietnam and Malaysia. However, unlike the radicalism of such alterations, they will definitely result in positive outcome. They presuppose confirmation that Vietnam and Malaysia will really meet the standards of the World Trade Organization. It means that the given countries will have to take a number of steps to improve its productivity and achieve the maximal transparence in their business.
Another advantageous provision of the Agreement is introduction of the minimum wage. Despite the fact that, on the first sight, the current point seems to be of little importance, it may assist in solving the problem of poverty. The governments will obtain the possibility to determine the payments, which can help its citizens to allow the most necessary things. The Agreement prohibits any practice, which could result in the forced labor, such as withholding of passports of migrant workers by the employers or the collection of special fee for the employment. Such practices turn the employees into debtors and are considered unethical and immoral. There is also a demand for the Vietnamese government to provide more freedom of workers and enable them to form the trade unions (Burca, Kilpatric, and Scott, 2014, p. 160). It is generally considered that the provisions of the TPP will improve the working standards and make them higher than they are now.
On the other hand, it has to be stated that the American car manufacturers are afraid of the Agreement, as they consider that reduced import taxation will lead to the devaluation of their products. They are partially right, as it will be much easier for the Japanese car producers to intrude into the American market and the demand for the Japanese cars might rise. However, such fact has to be perceived not as problem or challenge, but as a possibility to improve the technical details of American market. Robust competition is beneficial, as it assists in developing new marketing strategies and new technologies, and achieving progress in general.
The Recommendations for the TPP
The TPP seems to be safe Agreement, which includes a number of advantages. However, there exist a number of recommendations, which could be used to improve the final outcome. The first concerns the Japan-American car industry cooperation.
- It would be wise to create certain limitations on the import of Japanese cars. Such limitations should be efficient for the U.S., but should not create the detrimental effect for the Japanese market. American government is obliged to ensure that American car sales will not suffer due to the import of Japanese items. In other words, there is a necessity to create the beneficial atmosphere for the effective competition. The next issue, which should be recommended, is the increase of the working places number. Australia and Canada have voiced their concerns that the Agreement could result in the decrease of the workforce.
- In order to prevent the reduction of working places, certain provisions of the Agreement should be dedicated to securing the employees within the domestic market. Another concern, which has been discussed, considers the currency devaluation. The recent situation with Toyota raised a number of problems as the currency devaluation made the products of the company very cheap, and it was detrimental for the American car industry.
- In order to avoid such situations and possible threats in future, it is worth including the prohibition on currency manipulation into the Agreement.
In conclusion, it has to be stated that Trans-Pacific Partnership Agreement is a necessary step, which has been promoted by the President Barack Obama. Its close analysis has shown that it might improve the state of economic within the country through the increase of trade routes. One of its major advantages is the fact that it is useful not only for large corporations, but also for small enterprises like farmers and entrepreneurs. Moreover, the U.S. acquires a possibility to maintain its control over the Pacific market and improve its relationships with other countries, such as Japan, Australia, and France. The participation in the Agreement is an efficient chance to improve the situation within the country. Economical development may assist the country in achieving the targets stated by Barack Obama long ago. They include increase of working places, reduction of unemployment, and improvement of the life level. However, the participation includes a number of challenges. Their wise management and consideration might also result in positive consequences. It should be emphasized that the Trans-Pacific Partnership Agreement is complex, but it will definitely be beneficial to its participants.