Why did President Trump back out of TPP?

Former President Barack Obama was the one who initiated for the U.S. to join the TPP, but on President Trump’s first day in office he signed an order stating that the U.S. was to be removed from the partnership. He declared an end to the era of multinational trade agreements. What they’ve done with their choice to withdraw from the partnership is to give them an incentive for diversifying their trading partners. In hopes that the diversifying will make them find their own way to start conversations and have negotiations that the U.S. will not participate in. However, removing the U.S. from the TPP increases doubt among the United States’ allies about how reliable the U.S. is across an array of overseas and financial matters. This removal marks the first time the U.S. has backed out from an agreement it supported. President Trump has changed the U.S. trade policy by insisting he will only negotiate trade deals with specific allies. It is to be determined how the administration will put the strategy into place and how to utilize it. The U.S. had tried bilateral agreements in the past, but they were slow to progress and some of the negotiations had to be abandoned which resulted in a shift to multinational agreements.

Source: (Solís, 2017)
https://www.brookings.edu/blog/unpacked/2017/03/24/trump-withdrawing-from-the-trans-pacific-partnership/

what was the TPP designed to do?

Not a lot of people know what TPP stands for. TPP also known as Trans-Pacific Partnership are twelve countries that border the pacific ocean TPP is expected to eliminate tariffs on goods and service. So how big is the TPP? The twelve countries include, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam, Japan and Of course the U.S.. These 12 countries the Biggest and fastest growing commercial partners, It counted for 1.5 trillion worth of trade in goods in 2012 and $242 billion worth service in 2011, it also Makes up roughly 40% of the world’s economic output.

http://www.speaker.gov/general/myth-vs-fact-setting-record-straight-trade-promotion-authority

Labor Standards in the TPP

The United States Trade Representative has said the Trans Pacific Partnership has “the strongest protections for workers of any trade agreement in history”. The TPP states that all 12 nations recognize the laws regarding the International Labor Organization’s essential labor practices and rights and implement them.  The TPP relies on the political drive of the United States to enforce the labor standards they set out. In addition, the TPP requires that all nations have laws governing minimum wages, scheduled work hours, and work-related safety and health to all employees. States cannot waive these laws especially in places where there is a higher risk of labor complications.  The TPP parties must settle labor disagreements the same way they would settle commercial arguments, which includes the likelihood of trade agreements as an answer. However, TPP does not care about what the extent of those laws are, just as long that there is something in place. This means that the minimum wage, scheduled work hours, and work-related safety and health obligations of the TPP are not meaningful. So, a maximum of 100 work hours and a minimum wage of $1 a day would both satisfy the TPP requirements.  Labor standards depend on each country and how they interpret those requirements. In free trade agreements, only a government can solve a dispute settlement against another government for not following FTA labor protections. Being that the TPP has a free trade agreement, it restricts dispute settlements of work issues to party states’ governments. Only the United States government can raise a labor disagreement against another party state, not any individual or organization within the U.S. This leads one to believe that perhaps the TPP does not take its labor requirements as seriously as they should.

Source: (Dong, 2016)

https://onlabor.org/enforcing-labor-standards-under-the-trans-pacific-partnership/

What industries are effected by the TPP? And how are they effected?

Many industries are effected by the TPP. The TPP involves more than 40% of the world's economy. However; like any major trade deal, there are industries that would both suffer and excel if the new deal goes into effect.

Automotive Industry:

Japan is one of the world's largest car manufacturer's. If this deal is implemented, it could help grow their industry. They would be able to have cheaper access to getting products into the U.S. The U.S. automotive industry could also grow in their exports, because the high tariffs they are paying to get into countries such as Vietnam, would be eliminated.

Agriculture industy:

Farmer would benefit from the TPP.  Currently; depending on the type of food, their products can be taxed as much as 30%-40%. The TPP would eliminate the tax on exporting this food.

Local Industries:

Many industries in the US are worried that with such a cut in export taxes, it would take away a lot of business in developed nations such as the US and Japan. The TPP makes it easier for companies to do business overseas, and with the increase in competition, it may make it hard for some industries to stay in the US.

It is predicted to help underdeveloped nations, as companies would start moving factories into lower wage areas.

Tech industry:

Companies such as Google and Uber would see a cut in restrictions removed on sales in foreign markets, as well as requirements that they need to establish infrastructure. This would make it easier for them to conduct business in foreign nations, and increase the amount of competition. Although competition is good, it is possible that these industry giants would take out a lot of local competition in other countries.

Source:

(Naidu-Ghelani, 2015)

http://www.bbc.com/news/business-34451423

How did the TPP start?

The TPP can be traced all the way from 2003 with a three party trade bloc between New Zealand, Singapore, and Chili. Brunei was added to the deal in 2005, making the TPP a four party trade bloc.  However; in 2008,the United States decided to join in on the new agreement. This opened an expansion of the membership. The United States joined the TPP to help U.S. businesses compete in the Asia-Pacific region. There was a lot of opposition when the United States joined the TPP. The opposition claimed that the United States would take over the trade in those regions by joining this partnership, and make it much harder for the original countries involved to compete in trade. Once the United States became a member, they soon sent out invitations to Australia, Vietnam, and Peru. Today, the TPP is made up of twelve nations: Australia, Brunei, Canada, Chili, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The TPP has not yet gone into effect. Later, we'll be talking about the current problems the agreement is facing, and what the future may hold for the TPP.

Source:

(Rajamoorthy, 2013)

https://www.globalresearch.ca/the-origins-and-evolution-of-the-trans-pacific-partnership-tpp/5357495

Welcome to the Trans Pacific Partnership blog. This blog will cover how the TPP started, and how it is progressing in development.