Trans-Pacific trade discussion highlighted challenges, opportunities; video now available
On February 12th, the Center for Business and Public Policy (CBPP) hosted a Georgetown on the Hill event entitled “Can the U.S. Negotiate a High Standard Trans-Pacific Partnership? What’s at Stake for Jobs and Consumers?” in the Rayburn House Office Building. Led by CBPP Senior Industry Fellow, J. Robert Vastine, the panel included Barbara Weisel, Assistant U.S. Trade Representative for Southeast Asia and the Pacific and chief negotiator for the Trans-Pacific Partnership (TPP), Rick Johnston, Senior VP and Director of International Government Affairs at Citi, Steve Lamar, Executive VP of the American Apparel and Footwear Association, and Ed Gresser, Director of the Progressive Economy Project. Collectively, the panel addressed the state of TPP negotiations, the most important issues concerning the agreement and the opportunities and challenges that lie ahead.
Barbara Weisel started the discussion by explaining the history behind U.S. involvement in TPP and where the U.S. stands in current negotiations. The TPP was first initiated by four countries (New Zealand, Singapore, Brunei and Chile) in 2006 and aimed to be the most prevalent Asian free trade agreement to date. This attracted U.S. interest and the U.S. joined twice – once under President Bush in 2008 and again in 2009 under President Obama. Weisel enumerated three reasons why the U.S. joined TPP. First, the U.S. saw an opportunity to strengthen trade ties in Asia. Second, the U.S. thought the original four countries (P4) were a good group to work with to tackle new issues in the form of a trade agreement. Third, the United States viewed TPP as a mechanism to enhance U.S. global competitiveness by tailoring the agreement to address U.S. competencies. Furthermore, Weisel argued TPP is different from prior trade agreements because of its high standards. It aims to be comprehensive by covering both goods and services as well as by being regional as opposed to bilateral, address non-tariff and regulatory barriers to trade, incorporate competitiveness for small and medium enterprises (SMEs), and be a living agreement that will address emerging issues in trade. Weisel explained that TPP is complex not only because it includes 11 economies, but also because many bilateral agreements will be folded into the new TPP text. She stated: “we are slowly making progress on a package that will be balanced and that addresses the offensive and defensive interests of both countries, but we have to do so in a way that is comfortable for both countries.” She concluded her remarks by stating that after 2 years of negotiations, the U.S. still has challenges to address, but is working towards finishing the agreement in 2013.
Rick Johnston opened his remarks by saying that the TPP is a “revolutionary agreement that is building on basic frameworks” already established in prior trade agreements. He conveyed excitement over how he envisions TPP as setting trade standards for the world, including addressing behind-the-border impediments to trade that complicate cross-border investment. He also identified other challenges that may be addressed under TPP, such as addressing e-commerce, protecting cross-border data flow and incorporating supply chain logistics.
Steve Lamar also discussed what he views as opportunities and challenges for the TPP. He believes the U.S. benefits from TPP are opportunities for diversification in supply chains, low tariffs, expansion of export markets, regulatory customs platforms, regional integration, and a living framework for future trade agreements. To that end, Lamar believes that the major challenge TPP faces is constructing an agreement that can be used 10 years from now. He is pleased, however, that the conversation surrounding TPP is focused on the agreement’s flexibility in addressing issues as they develop, such as impediments in the global supply chain. Lamar also elaborated on this challenge by saying that the complexity of TPP makes it continually hard to conclude the agreement; yet, he has also been pleasantly surprised of how easy integration has actually been.
Lastly, Ed Gresser highlighted a major accomplishment of TPP: the creation of predictability and rules. It also pays substantial attention to trade facilitation and the capacity of trade in developing countries. Yet, bringing the focus back home, Gresser emphasized that TPP can be used as an alternative to fiscal policy to ameliorate the loss of family wealth that occurred during the most recent recession. He cited that the TPP countries represent a $750 billion collective market and will be an important place to conduct business for years to come.