The Trans-Pacific Partnership (TPP) Explained

Summary

The Trans-Pacific Partnership (TPP) is a proposed trade agreement among 12 Pacific Rim countries, aiming to boost economies by eliminating tariffs and creating a level playing field. It could supersede existing deals like NAFTA and promote higher-value goods and services. The TPP also includes standards for environmental and labor protections. While it faces criticism over potential job losses and high medicine costs, proponents argue it could increase U.S. economic output by over $100 billion annually and counterbalance China's influence. The deal's success hinges on ratification by each country's legislature.

Takeaways

• 🌏 The Trans-Pacific Partnership (TPP) is a significant trade deal involving 12 countries, aiming to strengthen their economies by linking them together.
• 🕒 Negotiations for the TPP have been ongoing for over ten years due to numerous points to be agreed upon.
• 💰 The 12 countries involved account for a combined 40% of the global GDP, indicating the potential impact of the TPP on the global economy.
• 🛑 The TPP aims to supersede previous trade agreements like the North American Free Trade Agreement (NAFTA) by building on and improving them.
• 🚫 Trade between TPP countries is expected to be boosted by eliminating tariffs and other protectionist measures that shield domestic industries from foreign competition.
• 🏭 Examples of industries that are often protected include beef and cars in Japan, dairy and sugar in the U.S., and state-owned enterprises like Chile's copper company and Vietnam's telecommunication service.
• 📋 Along with trade barriers, the TPP requires member countries to meet certain standards, such as environmental protections and enhanced labor standards, to ensure a level playing field.
• 🌳 Environmental standards include bans on trading in endangered species and illegal logging, while labor standards involve the right to form unions, abolition of child labor, and banning workplace discrimination.
• 🇺🇸 The Obama administration is using the TPP to incentivize governments to adopt more responsible social policies in exchange for stronger economic ties with the U.S.
• 🤔 There has been domestic pushback in the U.S., with concerns that the TPP could be detrimental to American workers and lead to job losses.
• 💼 Critics argue that certain patent and copyright rules in the TPP could keep the cost of medicine high, while others fear a repeat of job losses seen after NAFTA.
• 📈 Despite criticisms, proponents argue that the TPP could increase American economic output by over 100 billion dollars a year and open new markets for U.S. businesses.
• 👥 A challenge is ensuring that income gains from globalization are distributed among all Americans, not just the top investing class.
• 🐘 China is notably absent from the TPP talks, as the deal is partly aimed at offsetting China's power by strengthening North America's ties with China's neighbors.
• 📝 The initial agreement must be finalized among the first 12 countries, with each country's legislature needing to pass and ratify the TPP's terms.
• 🌐 The TPP could be a precursor to a TransAtlantic Partnership with Europe, potentially boosting U.S.-EU trade by over 50%.

Q & A

What is the Trans-Pacific Partnership (TPP) and why is it significant?

The Trans-Pacific Partnership (TPP) is a proposed trade agreement that could be the largest in history, involving 12 countries. It is significant because it aims to strengthen the economies of the participating countries by linking them together, accounting for a combined 40% of global GDP, and superseding past trade deals like NAFTA.

How long have the TPP negotiations been ongoing, and what is being negotiated?

The TPP negotiations have been ongoing for over ten years due to the numerous points that need to be agreed upon, such as trade barriers, environmental protections, labor standards, and more.

What are some examples of protected markets that the TPP aims to open up?

Examples of protected markets that the TPP aims to open up include 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.

What are some of the negotiated standards that all countries involved in the TPP must meet?

Countries involved in the TPP must meet certain negotiated standards, such as environmental protections that ban trading in endangered species and illegal logging, enhanced labor standards like the right to form a union, the abolition of child labor, and banning workplace discrimination.

How does the Obama administration view the TPP in terms of social policies?

The Obama administration sees the TPP as an opportunity to incentivize governments to create more responsible social policies in exchange for stronger economic ties with America and some of its closest trading partners.

What concerns do Democrats in Congress have regarding the TPP?

Democrats in Congress are concerned that the TPP could be detrimental to American workers, as they want guarantees that the US will enforce rules preventing foreign companies from flooding the US market with goods and services that undercut American products.

What criticisms have been raised about the patent and copyright rules proposed in the TPP?

Critics argue that certain proposed patent and copyright rules in the TPP could keep the cost of medicine around the world higher than it should be, potentially affecting global healthcare.

How has the North American Free Trade Agreement (NAFTA) impacted the US economy?

While some argue that NAFTA resulted in the loss of hundreds of thousands of American jobs, in the six years following its enactment, the United States created 2 million jobs each year. It helped retool the US economy to produce more higher value goods and services.

What are the projected economic benefits of the TPP for the United States?

Projections suggest that the TPP could increase American economic output by more than 100 billion dollars a year, opening new international markets to service and high tech businesses in the United States.

What is the main objective of the TPP in relation to China, and which countries might be included in the future?

One of the main objectives of the TPP is to offset the power of China by strengthening North America's connection to several of China's neighbors. The deal has been crafted to eventually include others like South Korea, Indonesia, the Philippines, Taiwan, Laos, Columbia, and Thailand.

What steps are required for the TPP to be finalized and ratified among the initial 12 countries?

For the TPP to be finalized and ratified, an initial agreement must be reached among the first 12 countries involved. Following this, the legislature of each country needs to pass a vote to accept the TPP's terms and ratify their membership.

What potential trade agreement could follow the TPP, and what impact could it have on trade between the US and EU?

If the TPP is successful, a TransAtlantic Partnership with the Europeans could follow. This could potentially boost US-EU trade by more than 50%.

Outlines

00:00

🌏 Overview of the Trans-Pacific Partnership (TPP)

The Trans-Pacific Partnership (TPP) is a monumental trade agreement that has been in negotiations for over a decade, involving 12 countries that collectively account for 40% of the global GDP. The TPP aims to strengthen these economies by eliminating tariffs and other trade barriers, thereby fostering economic growth and cooperation. It is designed to supersede previous trade deals such as the North American Free Trade Agreement (NAFTA) and includes provisions for environmental and labor standards, including the prohibition of child labor and workplace discrimination, as well as the right to form unions. The TPP also seeks to incentivize governments to adopt more responsible social policies, although it has faced criticism for potentially being detrimental to American workers and for certain patent and copyright rules that could impact global medicine costs.

🛑 Challenges and Controversies Surrounding the TPP

Despite the potential economic benefits, the TPP has faced significant pushback, particularly from Democrats in Congress who are concerned about the impact on American workers. Critics argue that the deal could lead to job losses similar to those experienced after NAFTA, although proponents counter that NAFTA actually helped the US economy by creating 2 million jobs annually for six years post-enactment. The TPP is also criticized for not addressing the issue of income inequality and the concentration of gains among the top investing class. Additionally, the deal has been crafted to counterbalance China's influence by strengthening ties with its neighbors, which has geopolitical implications that are a point of contention.

🚀 Economic Projections and the Road to Ratification

Economic projections suggest that the TPP could increase American economic output by over 100 billion dollars annually. However, the challenge remains to ensure that the benefits of globalization are equitably distributed among all Americans. The TPP is also designed to be inclusive, with the potential to eventually include other countries like South Korea, Indonesia, the Philippines, Taiwan, Laos, Columbia, and Thailand. For the TPP to come into effect, an initial agreement must be finalized among the first 12 countries, followed by ratification through a vote in each country's legislature. The success of the TPP could pave the way for a TransAtlantic Partnership, further boosting trade between the US and the EU.

📚 Additional Resources and Conclusion

The video concludes by encouraging viewers to explore more about the TPP and related economic topics. It suggests watching additional content such as rankings of American presidents or comparisons of different governmental systems. For those interested in delving deeper into economics and wealth inequality, the video recommends the audiobook 'Capital in the Twenty-First Century' by economist Thomas Piketty. Viewers are also invited to download the book for free by signing up for a 30-day trial at Audible.com. The video is produced by TDC, hosted by Bryce Plank, and edited by Brendan Plank.

Keywords

💡Trans-Pacific Partnership (TPP)

The Trans-Pacific Partnership (TPP) is a proposed trade agreement that was designed to be the largest in history, involving 12 Pacific Rim countries. The TPP aimed to strengthen economies by reducing trade barriers and fostering economic integration. In the video's context, it is highlighted as a significant deal that could potentially supersede previous agreements like NAFTA, and it is a central theme around which the video discusses the implications for global trade and economic policies.

💡Tariffs

Tariffs are taxes imposed on imported goods and services, often used by governments to protect domestic industries from foreign competition. In the script, the TPP is mentioned as a mechanism to boost trade between nations by eliminating many tariffs, which would facilitate the flow of goods and services across borders without the additional cost, thus promoting economic cooperation and growth.

💡Protected Markets

Protected markets refer to sectors of an economy that are shielded from foreign competition through government policies, such as tariffs, quotas, or subsidies. The script cites examples like Japan's beef and car markets, the U.S. dairy and sugar industries, and state-owned enterprises in Chile and Vietnam, which would be impacted by the TPP's efforts to reduce trade barriers and create a level playing field.

💡Environmental Protections

Environmental protections are policies and regulations aimed at preserving natural resources and ecosystems. The TPP negotiations included standards to ban trading in endangered species and illegal logging, which are examples of environmental protections. These standards are part of the broader goals of the TPP to promote sustainable development and responsible social policies.

💡Labor Standards

Labor standards are regulations that ensure fair and humane working conditions. The script mentions enhanced labor standards as part of the TPP, such as the right to form a union, the abolition of child labor, and banning workplace discrimination. These standards are intended to promote fair competition and social responsibility among the TPP member countries.

💡Globalization

Globalization is the process of increased interconnectedness and interdependence among countries through trade, investment, and cultural exchange. The TPP is a response to globalization, aiming to spread income gains more evenly among all Americans, not just the top investing class. The video discusses the challenges of ensuring that the benefits of globalization are shared broadly across society.

💡North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA) is a trade agreement between Canada, the United States, and Mexico that predates the TPP. It is mentioned in the script as an example of a past trade deal that the TPP would build upon and supersede. The video also contrasts the potential negative impacts of NAFTA with the positive job creation that followed its implementation.

💡Economic Output

Economic output refers to the total value of goods and services produced by an economy. The script projects that the TPP could increase American economic output by more than 100 billion dollars a year, indicating the potential economic growth and prosperity that the trade deal could bring to the United States.

💡China

China is mentioned in the script as not being involved in the TPP negotiations. The TPP is partly aimed at offsetting China's power by strengthening North America's connection to several of China's neighbors. This highlights the geopolitical aspect of the trade deal and its strategic importance in the global economic landscape.

💡Legislature

A legislature is a governmental body responsible for making and passing laws. In the context of the TPP, the script notes that the legislature of each involved country must pass a vote to accept the TPP's terms and ratify their membership. This underscores the political process and the need for domestic approval of international agreements.

💡TransAtlantic Partnership

The TransAtlantic Partnership is mentioned as a potential trade agreement that could follow the TPP, aiming to boost US-EU trade by more than 50%. This concept extends the theme of the video to the possibility of further economic integration between the United States and Europe, indicating a broader trend towards global trade liberalization.

Highlights

The Trans-Pacific Partnership (TPP) is potentially the largest trade deal in history.

Negotiations have been ongoing for over ten years due to numerous points to negotiate.

12 countries are involved in strengthening their economies through the TPP.

The combined GDP of these countries accounts for 40% of the global GDP.

TPP will supersede past trade deals like the North American Free Trade Agreement (NAFTA).

Trade between nations will be boosted by eliminating many tariffs and protectionist measures.

Protected markets such as beef and cars in Japan, and dairy and sugar industries in the U.S. will be affected.

Countries involved must meet certain standards including environmental protections and labor rights.

The Obama administration aims to incentivize responsible social policies through stronger economic ties.

There is domestic pushback in the U.S. with concerns over the impact on American workers.

Critics argue that certain patent and copyright rules could keep medicine costs high globally.

Despite job loss concerns, NAFTA helped the U.S. create 2 million jobs each year for six years post-enactment.

TPP is expected to continue the trend of the U.S. economy producing higher value goods and services.

Opening new markets could significantly expand the U.S. service and high-tech industries.

Projections estimate the TPP could increase American economic output by over 100 billion dollars annually.

A major challenge is ensuring income gains from globalization benefit all Americans, not just the top class.

China is not involved in TPP talks, as the deal aims to offset China's power by strengthening North America's ties with neighboring countries.

The deal is crafted to eventually include other countries like South Korea, Indonesia, and more.

An initial agreement must be finalized among the first 12 countries, with each country's legislature needing to pass it.

A successful TPP could be followed by a TransAtlantic Partnership with the Europeans, potentially boosting US-EU trade by over 50%.

Transcripts

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.