ILMA Compoundings August 2016 - 5

FROM THE CEO

The Trans Pacific
Partnership: Digging
Through the Politics
Holly Alfano

ne of the most controversial topics of this election
year is the Trans Pacific Partnership, or TPP.
Interestingly, President Obama joins some freemarket conservatives in support of the trade agreement, while
presidential candidates are running for the exits.
And no wonder candidates are disavowing trade agreements.
The tea leaves, or rather, polls, don't show much support
among voters for broadening global trade. A late-June
Rasmussen poll showed that only 29 percent of voters believe
most U.S. free trade agreements have been good for America,
with a full 49 percent saying they have been bad for the
country. The remaining voters believe the agreements have
had no impact or are undecided.
As Secretary of State, Hillary Clinton worked with Obama
administration officials to negotiate TPP. But just prior to
the Democratic debates, Secretary Clinton changed her
position to join the rest of the candidates in opposing TPP.
And on the Republican side, Donald Trump has been harshly
critical of TPP, along with most trade deals the United States
has negotiated.
It's not easy to find unbiased information about TPP. One
has to dig deep, with both sides firmly entrenched in their
positions. The most reliable information can be found in a
series of reports prepared for Congress by the nonpartisan
Congressional Research Service (CRS).

What Exactly is TPP?
For the past several years, the United States and 11 other
nations have been negotiating a free trade agreement (FTA).
These 12 nations comprise 40 percent of the global economy
and include Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, the United States and
Vietnam. Late in 2015, the nations announced the conclusion
of negotiations and released the text of their agreement,
which is now before Congress for an up or down vote.

Opposition
Labor unions are adamantly opposed to TPP and claim it
will lead to job losses. They compare TPP to the 1994 North
American Free Trade Agreement (NAFTA), which they say led
to the loss of some 700,000 U.S. jobs. Additionally, they say
that some countries participating in TPP do not play by the
same rules as the United States does when it comes to labor
and environmental protection, and that will disadvantage U.S.
workers as companies outsource to countries with
lower standards.
Comparisons to NAFTA fuel much of the opposition to TPP.
It is documented that there were a number of manufacturers
who relocated plants to Mexico following implementation
of NAFTA, and certain states such as Ohio, Michigan,
California and Pennsylvania suffered job losses as a result
of plant relocation.

Proponents
On the flip side, the Chamber of Commerce, the National
Association of Manufacturers and the Obama administration
say TPP will open markets for American manufacturers who
are disadvantaged by more than 18,000 tariffs placed on U.S.
products by various countries. TPP will end those tariffs,
benefiting U.S. manufacturers and workers.
Regarding the labor issues, the Obama administration says
that the TPP agreement includes "the strongest worker
protections of any trade agreement in history" and requires

Compoundings August 2016 * 5 * Vol. 66 No. 8

ILMA Compoundings August 2016

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