Protecting Human Rights vs. Increased Trade Influence: The Pros and Cons of Withdrawing from the TPP

Trans-Pacific Partnership (TPP) is a trade agreement between mostly Asia-Pacific countries. The original countries included the United States, Japan, Mexico, New Zealand, Canada, Peru, Australia, Brunei, Chile Singapore, Malaysia, Vietnam, and possibly Korea in the future.

America exited this agreement with an executive order issued by President Trump on January 23, 2017, just two days after he entered office.

The inclusion in this trade pact would have affected about 40 percent of America’s imports and exports.

Opponents Cited Several Deficiencies in this Agreement

[1] There is No Real Protection for the Environment

In contrast with previous agreements, such as the Helsinki Accord, the TPP did not address even the basic environmental concerns that many felt were vital to making progress in this global problem. For example, there is no provision for pollution controls or regulation.

In addition, there are only minimal mentions for protection of wildlife.

To make matters worse, participating countries are able to challenge the environmental laws and policies of other countries, making it possible to move in the wrong direction for environmental protections.

[2] American Interests Are Not Protected

The overall gist of the TPP is to help countries that are less developed than the United States to improve their production and labor force. The implication is that the United States economy would suffer overall in its attempt to give smaller countries a leg up.

For the most part, the largest transnational corporations and the smaller participating countries wanted the United States to be part of this pact. The smaller American manufacturers did not see this agreement to be to their benefit.

[3] Intellectual Property is Not Properly Protected

The copyright protections on property was reduced from 12 years to 5 years in some cases. This is particularly problematic where extended periods of time are needed for product development and government approval. According to TPP, knock-off could be legally created before the creator had time to recoup his developmental costs and make any profits at all.

The TPP was created to promote economic growth and job creation in the smaller participating countries. It also had the mechanism that would allow for investor-state dispute settlement. However, small countries with a small GDP, such as Vietnam, would be able to veto proposals made by larger, more productive countries, such as the United States.

The agreement is also criticized for imposing unequal application of the rules across different countries.

[4] Little or No Human Rights Protections

Human rights groups have complained that the TPP agreement does very little to prevent human rights. Countries that use low-wage and long-hour labor are not required to institute humane working conditions.

Furthermore, the settlement agreement mechanism outlined in the agreement allows violators to ban together to outvote countries that have stricter human rights laws.

[5] China is Conspicuously Absent

China is not included in the TPP pact. The United States has lost a reported 2.7 million jobs due to trade deficits with China. Furthermore, approximately 40 percent of America’s trade deficit is due to the imbalance with China. Any agreement that does not address this problem will do nothing to correct this problem.

Nevertheless, China could benefit from this agreement even without being a member. Countries could get their materials from China and then sell them to the United States. This effectively negates any regulations on manufacturing materials found in the TPP.

[6] The TPP Would Make the US Trade Deficit Worse

Multi-country trade agreements have never improved America’s trade deficit. Agreements tend to give preference to smaller countries in a effort to promote globalism.

However, the arguments about imbalances regarding costs of goods as they enter countries, some which impose VAT taxes and some which don’t, could have been offset with tax credits in the country with the disadvantage.

Drawbacks of Withdrawing from the TPP

Some argue that withdrawing from this agreement would make US trade policy look unstable, having pushed to create it under the Obama presidency and then exiting it quickly under the Trump administration.

Companies who build machinery and equipment used in manufacturing and were hoping for tax credits fear that the loss of the TPP will harm their chances for exports to less developed countries.

Those in favor of staying with this agreement looked to the future, speculating that the US could increase its influence in Asia by being able to help shape new changes to the open structure of the agreement as new countries wanted to enter.

Some countries who are left in the pact feel that its importance is greatly reduced without the inclusion of the United States. Others fear that China will enter into a pact, similar to the TPP, with the remaining countries to fill the void left by the United States.

Withdrawing from the TPP now allows the United States to make customized trade agreements with each individual country. Each agreement can now address human rights and environmental issues as are appropriate to each situation.

The American workers’ interests can be protected by eliminating the need to complete with China-made products created by underpaid labor. Furthermore, the trade deficit can be reduced by including provisions in each agreement that levels the playing field, providing a better give-and-take approach.

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