The High Stakes of the Trans-Pacific Partnership (TPP)

International trade deals are getting a bad rep these days, but there are concrete reasons why the TPP, a complex international trade agreement between the U.S. and 11 other countries in Asia and the Americas, is certainly worthy of support. This is a very divisive issue, one that has not yet garnered substantial support from either side of the aisle. Even Democrats are split on passing the trade deal, and both major party presidential candidates have expressly promised to do away with or, at a minimum, renegotiate it as soon as they are elected. Critics of the TPP cry that international competition, by definition, is unfair. But, blaming trade deals for a decrease in high-skilled manufacturing jobs and unfair competition is not only irresponsible, it is extremely dangerous.

Both candidates see the TPP as a threat to U.S. employment, but it is important to understand the dangers of protectionism and the necessity for U.S. businesses to learn to compete internationally. Global competition is not something that can or should be avoided. And, automation and improved manufacturing processes are the primary reason for the gradual decline of high-skilled jobs in manufacturing industries.

So, what are the stakes? In my opinion, they are threefold:

1) Helps to get ahead of China and create regulations around trade, preventing them from attaining complete control in the Asia-Pacific region.

The admittedly complex trade agreement could presage a new U.S. dynamism in international trade policy and geopolitics in the Asia-Pacific region. Clearly, China is at the center of the Obama Administration’s thinking, as the socialist nation is already a powerhouse in the region and the global economy. It is essential to turn China’s focus to economic rather than ideological (and potentially, revolutionary) directions, which would be detrimental to the U.S. and our trading partners. To do this, it is important to convince other major players in the region that, as a result of the TPP, economic progress will be the outcome, instead of falling victim to internal skepticism and protectionism.

That is what all members of Congress must remember during this last, lame-duck session of President Obama’s presidency. Sadly, it doesn’t look too likely that will be considered.

2) The Danger of Protectionism.

Protectionism is a concept that has continuously failed throughout history. Now, the global market is an unavoidable reality for businesses that wish to continue on in the digital age. With increased international trade comes added competition but also added consumers. We cannot shut ourselves off from the world and expect the U.S. economy to grow.

In terms of tangible benefits to U.S. businesses, the TPP presents an opportunity for those that want to compete in an expanding international market. Whether or not the TPP is ratified, U.S. manufacturers will inevitably have to compete globally. And, U.S. service industries, including finance and the “learned professions,” have grown continuously in the U.S.. We should urge American youth to keep this in mind when deciding on a career instead of trying to artificially retain manufacturing jobs that, arguably, might become obsolete. We must urge our youth to get training and experience in industries that are not headed toward extinction in the U.S.. American businesses are among the most innovative and vigorous competitors in the world. As a nation, we must embrace innovation and new opportunities rather than cling to occupations that are a thing of the past.

3) International investments in the U.S.

In addition to more competitive prices for raw materials, components, and machinery, the TPP would open new markets in countries that are not current Foreign Trade Agreement (FTA) partners. This trade works both ways: further opening export markets in TPP partners and attracting new investment from those countries into the United States. According to the U.S. Department of Commerce, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis Data, companies headquartered in TPP countries have already invested nearly $600 billion in the U.S. and employ more than 1.5 million Americans. The TPP will increase opportunities for additional investment through the reduction of barriers including improved dispute settlement procedures in these partner countries as well as in the U.S.. By removing trade barriers, this agreement will encourage companies based in TPP countries to increase business investment in the U.S., supporting both economic growth and job creation.

From where an admitted globalist sits, the TPP is worth supporting economically, as it will help create the jobs of tomorrow; and geopolitically, as it will shape the Pacific Region in ways that further the American way of dealing in mutual prosperity and progress. Sure, it is going to increase competition and hurt certain industries here that can’t keep up. But, that is an inevitability with or without the TPP. Sooner or later the steel, auto, textile and other industries like them will have to learn how to adapt and compete internationally. The TPP might bring the inevitable home quicker, but it will also help these industries adjust. And, most importantly, the trade deal will stop China from gaining control of the vast, valuable Asia-Pacific market.

It is critically important that we find a way to prevent China from taking control of trade regulations and the Asia-Pacific market in general. The TPP is our best shot, as time is running out. China is already pushing their own agreement which excludes the United States. While the TPP isn’t perfect, the world is getting smaller. We have to accept the fact that we can grow and benefit from close trade relations with the Asia-Pacific region. China, as a world power, cannot be the sole decision maker, potentially shutting out the United States. So, the passage of this currently unpopular trade-deal is crucial to the future of the global market.