Our Editorial: Congress should approve trade deal
The Trans-Pacific Partnership, or TPP, is a historic deal between the United States and 11 other nations that promises to streamline international commerce and boost 40 percent of the global economy by $285 billion in 10 years.
That’s a lot of good in one package.
The agreement would eliminate taxes, quotas and other bureaucratic hang ups to freer trade. It would also increase pressure on China to conduct business in line with the values of the U.S. and other involved nations.
As with any deal, compromises have been made, but overall the TPP is good for America and the other nations. Congress should approve it and allow the U.S. to go about the business of more vigorous trade.
President Barack Obama faces an uphill battle in corralling a wary GOP and members of his own party who bow to protectionism and fear free trade.
Though particulars will continue to be negotiated over the coming months, the deal opens up markets around the globe to which 44 percent of U.S. exports already flow — and it improves trade conditions for farmers, pharmaceutical companies, even automakers.
The TPP boosts intellectual property protections for biologic drugs and opens up dairy trading with critical trading partners like Canada and Japan.
Detroit’s Big Three aren’t pleased with the deal, even though the agreement makes it easier for them to export vehicles to Japan. Automakers would see a lengthy delay of the phase-out of taxes that protect domestic truck production. That means foreign auto companies will still be incentivized to make their trucks here.
The deal does not, however, protect automakers against currency manipulation — namely by Japan — that could potentially make their vehicles more expensive overseas. Detroit companies have lobbied hard for those rules to be included in the TPP.
American automakers should take the deal as is and work on a separate arrangement to address currency manipulation. There’s talk of such an agreement for Japan and other countries.
Additionally, Japan has used other mechanisms to keep American cars out of its market, so currency manipulation isn’t the only problem. As part of the agreement, Japan agreed to more transparency in its import rules, and agreed to make it easier for the U.S. to export certain cars to its market.
The TPP also sets up enforcement mechanisms to ensure its measures are upheld. If not, the U.S. can impose old taxes and hurdles to force countries to comply.
Those mechanisms also apply to labor and environmental standards, of concern to many of Obama’s supporters.
The deal forces developing nations to boost labor environments; for example, requiring Vietnam to allow trade unions and forcing Malaysia to stamp out human trafficking. Previous trade deals included mechanisms that only forced countries to abide by their own labor laws, which are often lacking.
With the marketplace for goods becoming increasingly globalized, it’s critical the U.S. secure trade provisions that protect its best interests, and also promote freedom throughout the world more broadly. The TPP is a good move in that direction.