The nation’s major-party presidential candidates haven’t agreed on much in this campaign, but neither Hillary Clinton nor Donald Trump currently supports the Trans-Pacific Partnership.
It’s a potentially dangerous triumph of politics over sound policy.
The Trans-Pacific Partnership is a trade agreement that would apply to the United States and 12 nations in the Pacific Rim but notably not China. Negotiated over seven years, it was signed in February 2016 and is awaiting ratification by all of the member nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Read the full Journal Sentinel article here.
Again, the TPP does not include China. The Chinese are leading talks around a competing agreement, the Regional Comprehensive Economic Partnership, that would involve some but not all of the same nations that hammered out the TPP. The rival RCEP agreement most notably does not include the United States.
While both agreements propose to reduce tariffs and other barriers to trade, the TPP stands out in terms of its broader language pertaining to jobs, innovation, standards of living, labor safeguards and environmental protections.
And yet, Democrat Clinton has backed off support for the TPP despite having once called it “the gold standard” of trade deals and Republican Trump insists the TPP was “designed for China to come in, as they always do, through the back door and totally take advantage of everyone.”
If the candidates are right, 130 companies and associations in Wisconsin must be wrong.
That’s how many companies and associations with a major presence in the state signed onto a letter this summer urging support for the TPP, which they described as “critical to the future growth of trade, jobs, prosperity and competitiveness of the United States, and for Wisconsin in particular.”
Those companies include most of the biggest corporate names in Wisconsin and cut across all sectors, from manufacturing to agriculture, and retail to financial services and technology. As the letter noted, Wisconsin exported nearly $15 billion worth of agricultural and manufacturing goods to TPP nations in 2015 alone. The Wisconsin company letter also warned of China’s efforts to negotiate a competing agreement that would “cede economic leadership in Asia…”
The TPP has special meaning to companies in technology sectors because it would set rules for technology access and protection that are patterned after those followed in the United States. The TPP would prohibit data localization requirements, ensure the transfer of data across borders, protect source codes, strengthen intellectual property protections and generally make it harder for nations to shut down the internet, close data servers and engage in cyber-attacks.
No wonder the Chinese would prefer a separate agreement.
Despite the political positions of the candidates — Clinton doesn’t want to lose Bernie Sanders voters and Trump is playing to voters who think all trade is bad — the TPP may yet win approval before the current Congress adjourns.
A push is underway to ratify TPP during a post-election session of Congress, providing agreements are reached on some specific sticking points, such as market exclusivity time periods for producers of biologic or “biosimilar” drugs. Such drugs, often the product of U.S. innovation, have revolutionized treatment of many chronic diseases.
In general, Wisconsin’s congressional delegation has supported free trade. House Speaker Paul Ryan (R-Wis.) specifically backed TPP in the past. “Do we want to be at the negotiating table helping craft the policy or do we want to let another country — like China — write the rules?” Ryan asked in a statement. “TPP allows us to be in the driver’s seat.”
U.S. Rep. Ron Kind (D-Wis.) is a leader among congressional Democrats on trade; U.S. Sen. Ron Johnson (R-Wis.) has backed three bilateral trade agreements; U.S. Rep. Jim Sensenbrenner (R-Wis.) supported a critical test vote on TPP this summer. U.S. Sen. Tammy Baldwin (D-Wis.); U.S. Rep. Mark Pocan (D-Wis.); and U.S. Rep. Gwen Moore (D-Wis.) voted against the TPP fast-track measure.
The Trans-Pacific Partnership will open front doors to American companies and innovators, not back doors to China. It will reduce or eliminate thousands of foreign taxes on American imports and set rules for a fair digital economy. Election-year rhetoric aside, it’s a deal the United States should not pass up.