WASHINGTON — The sweeping Pacific Rim trade deal now being debated would cover everything from Vietnamese labor unions to copyright protections to trade in sockeye salmon. With the details having been released Thursday, a furious dispute is expected in the United States and some of the 11 other countries that negotiated it.
Supporters say the Trans-Pacific Partnership would promote economic growth and provide protections for workers on both sides of the Pacific. Critics say it contains giveaways to drug manufacturers and other multinational companies and exposes American workers to unfair competition with low-wage labor in countries like Vietnam.
Some questions and answers:
What is the TPP? It’s an ambitious and complex trade agreement involving the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Those countries account for nearly 40 percent of global economic output.
The pact would erase most tariffs and other trade barriers between the countries, whose trade ministers agreed to the deal a month ago. And it would clarify and standardize trade rules, making it easier to sell goods and services across the Pacific Rim.
China isn’t mentioned. Why? China, the world’s No. 2 economy, is conspicuously missing. In fact, the deal was designed in part to counter China’s influence in the Pacific Rim. U.S. Trade Rep. Michael Froman says it was critical for the U.S., not China, to write “the rules of the road for trade in the Asia-Pacific region. ... After all, this isn’t everyone’s approach to trade. Other countries, such as China, are already moving forward with deals that don’t reflect our interests and our values.”
How does it compare with other deals, like NAFTA? The Pacific deal was negotiated in the shadow of 1994’s North American Free Trade Agreement. That deal, among the U.S., Mexico and Canada, failed to deliver the big job gains its supporters predicted and was blamed by critics for wiping out many U.S. factory jobs.
In a statement Thursday, President Barack Obama conceded “that past trade agreements haven’t always lived up to the hype.” But the president added that “the TPP includes the strongest labor standards in history, from requiring a minimum wage and worker-safety regulations to prohibiting child labor and forced labor.”
What’s the case against it? To start with, critics are unconvinced of the labor standards Obama was eager to tout.
Vietnam, for instance, will get five years to update its labor policies. John Sifton, Asia advocacy director for Human Rights Watch, said Thursday that Vietnam might change its labor laws, but “we are concerned that Vietnam will not change its practices. They will continue to lock up union dissidents and punish people who challenge the government.”
What’s the likely economic impact? For the U.S., it probably wouldn’t wipe out as many jobs as critics fear or create as many as supporters predict. Peter Petri, professor of international finance at Brandeis University, has estimated that the impact on U.S. jobs would probably be minimal: Jobs created by expanded access to Asia-Pacific markets would likely be offset by jobs lost to increased competition.
Rajiv Biswas, Asia Pacific chief economist for IHS Global Insight, says Vietnam would be a big winner as tariffs on garment exports to the U.S. would disappear.