Much Ado About … What?
I am less than excited. One of the ballyhooed announcements that came out of President Obama’s trip to Asia was that the United States would take a look at joining the negotiations of the Trans-Pacific Strategic Economic Partnership Agreement (mercifully, the world seems to have shortened this to TPP). Three years of talks to establish the TPP were completed in 2005, when Singapore, Brunei, New Zealand and Chile signed up. It is not an inconsequential agreement. Customs duties among the four members will be largely eliminated by 2017, and there are binding environment and labor agreements as part of the deal (I don’t know the details of these).
There are three prime reasons my heart did not begin to pound when President Obama said that the United States would think about signing on.
- We seem to have forgotten that this is old news. Negotiations for the United States to join the TPP were first announced on September 22, 2008. But that was under the Bush Administration, so it obviously doesn’t count. How silly of me! Time for a memory wipe.
- Obama didn’t say that the United States would join TPP. He only said we would think about it. I think about a lot of things. That’s exciting.
- The United States already has free trade agreements in force with Singapore (which doesn’t charge duties anyway) and Chile, and has little trade with Brunei. Perhaps the TPP could resolve all those bitter trade problems with New Zealand. We must guarantee our sources of chardonnay.
Preserving Sources?
Actually, I suspect that TPP is a good framework to work within, but the outpouring of enthusiasm by trade organizations is a bit premature. This is going to take a long, long time, and the inclusion of more countries in the mix will likely complicate things. Australia, Vietnam and Peru have announced that they want to negotiate to join TPP. Australia and Peru shouldn’t pose insurmountable issues, since the United States already has FTAs with them, too. But it is going to be a long tough slog to convince the Congress that free trade with Vietnam is a good thing. I’d love to see it, but … it’s hard to get excited.
