Withdrawing from the Trans-Pacific Partnership, or TPP, was the first Day 1 action item Donald Trump mentioned in his Nov. 21 YouTube video. And on Jan. 23, President Trump did just that, signing an executive order to pull the U.S. out of the TPP. It’s a largely symbolic move, but a sign that the new administration is likely to take a less-than-global view of global trade.
What is the TPP and why was there such opposition, from both the Trump and Clinton campaigns?
A quick glance at the TPP
Twelve countries reached agreement in this international trade agreement in October 2015: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The U.S. Congress never ratified the agreement, which promised to cut tariffs on some 18,000 products, institute new protections for workers and the environment in TPP countries, and provide an investor-state dispute system.
These 12 nations generate about 40 percent of global trade. Major U.S. trading partners like China and the European Union are notably absent from the TPP, as is Russia. Former president Barack Obama’s official statement on the TPP argued that the United States should lead the Asia-Pacific trade agenda:
When more than 95 percent of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.
The Obama administration claimed the TPP would boost U.S. competitiveness in the Asia-Pacific region, support more than $2 trillion in U.S. exports of goods and services each year, and increase the number of export-related jobs created in the United States. By World Bank estimates, the TPP would have little impact on overall U.S. GDP because the two largest U.S. trading partners — Canada and Mexico — had already cut tariffs on U.S. goods as part of the 1993 North American Free Trade Agreement (NAFTA).
Why was the TPP on the chopping block?
During the 2016 presidential election campaign, Trump argued that the TPP would send U.S. jobs overseas and promised to withdraw from the agreement — and to pursue bilateral trade agreements instead. Both Hillary Clinton and her running mate, Sen. Tim Kaine (D-Va.), had supported the TPP in the past but during the campaign came out against it.
Anti-TPP demonstrations took place during both the Republican and Democratic conventions in summer 2016. Democratic and Republican voters alike voiced their strong opposition to an agreement they felt might threaten jobs in the United States.
On Nov. 11, the White House acknowledged that Obama would not move forward to ratify the agreement in his final weeks in office.
A number of recent Monkey Cage posts look at the TPP from various angles. Here are some of the analyses:
- Five key questions and answers about the leaked TPP text
- The sky fell on the U.S. poultry industry last year, but NAFTA and the TPP helped protect U.S. exports
- Yes, the TPP is over 5,000 pages long. Here’s why that’s a good thing.
- U.S. negotiators made sure the TPP agreement reflects U.S. interests. We checked, line by line.
- The TPP has a provision many will love to hate: ISDS. What is it and why does it matter?
- Key ingredients of opposition to free trade? Prejudice and nationalism.
- Investors have controversial new rights to sue countries. Here’s why this matters for the U.S.