Will U.S. Re-Enter TPP?
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White House’s attempt in re-entering the TPP (Trans-Pacific Partnership) is facing challenges. About a year after withdrawing the U.S. from TPP, President Trump has asked his top economic advisers, the U.S. trade representative Robert Lighthizer, and the director of the National Economic Council Larry Kudlow, to study the possibility of re-entering the TPP if the terms were favorable.The negotiations quite possibly would stretch beyond Donald Trump’s first term of his Presidency. President Trump first mentioned the possibility of re-entering the TPP at a January conference of business elites in Davos, Switzerland.
Historical Background, excerpt from wikipedia, in italic, below:
For those of you who are not familiar with TPP: The Trans-Pacific Partnership (TPP) is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and United States signed on February 4, 2016, which was not ratified as required and did not take effect. After the United States withdrew its signature, the agreement could not enter into force. The remaining nations negotiated a new trade agreement called Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which incorporates most of the provisions of the TPP.
The TPP began as an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) signed by Brunei, Chile, New Zealand and Singapore in 2005. Beginning in 2008, additional countries joined the discussion for a broader agreement: Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam, bringing the negotiating countries to twelve. In January 2017, the United States withdrew from the agreement. The other 11 TPP countries agreed in May 2017 to revive it and reached agreement in January 2018. In March 2018, the 11 countries signed the revised version of the agreement, called Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The reason why United States withdrew: During a speech on the 2016 presidential campaign, Republican Party nominee Donald Trump vowed to withdraw the United States from the Trans-Pacific Partnership if elected. He argued that the agreement would “undermine” the U.S. economy and its independence. On November 21, 2016, in a video message, Trump introduced an economic strategy of “putting America first”, stating that he would negotiate “fair, bilateral trade deals that bring jobs and industry back onto American shores.” As part of this plan, Trump confirmed his intent for the United States to withdraw from the Trans-Pacific Partnership on his first day in office. McConnell affirmed that the TPP would not be considered during the lame-duck session of Congress preceding the inauguration of Trump. President Trump signed a Presidential memorandum to withdraw the U.S. from the TPP on January 23, 2017. U.S. Senator John McCain criticized the withdrawal, saying “it will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it.” U.S. Senator Bernie Sanders applauded the move, saying “For the last 30 years, we have had a series of trade deals which have cost us millions of decent-paying jobs and caused a ‘race to the bottom’ which has lowered wages for American workers.”
The TPP’s future was uncertain after the United States’ withdrawal. Several signatories, however, signaled their intention to rework TPP without US participation. In January, 2018, the remaining eleven countries agreed on a revised TPP, now renamed as the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP). The agreement remains substantially the same, but contains a list of 20 “suspended provisions” that were added to the TPP at the U.S.’s insistence and that are now no longer binding. These provisions primarily relate to investment, government procurement and intellectual property.
The United Kingdom held informal talks to join the renewed negotiations after Brexit and has expressed an interest in joining the TPP.
The contents of the TPP go far beyond the standards drafted by the World Trade Organization. The TPP includes a negative-list of all sectors covered for the liberalizing trade, except for those clearly stated. The TPP includes new regulation for online commerce, treatment of foreign investors, far more comprehensive protection for intellectual property, labor codes, and an agreement for neutrality regarding state-owned enterprises. A 2016 study by University of Maryland political scientists Todd Allee and Andrew Lugg finds that out of the 74 previous trade agreements that TPP members signed since 1995, the text of the TPP most resembles that from earlier U.S. trade agreements. A 2017 study found that the TPP scored high relative to other trade agreements in terms of a government’s ability to freely legislate and implement regulations in given public policy domains.
The agreement cuts over 18,000 tariffs. Tariffs on all U.S. manufactured goods and almost all U.S. farm products would be eliminated completely, with most eliminations occurring immediately. According to the Congressional Research Service, TPP “would be the largest U.S. FTA by trade flows ($905 billion in U.S. goods and services exports and $980 billion in imports in 2014)”. The signatories represent roughly 40% of global GDP, and one-third of world trade.
In addition, the agreement mandates expedited customs procedures for express shipments and prohibits customs duties from being applied to electronic transmissions. It also requires additional privacy, security, and consumer protections for online transactions and encourages the publication of online customs forms. These provisions are expected to be particularly beneficial to small businesses.
Gathered, written, and posted by Windermere Sun-Susan Sun Nunamaker
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