Trans-Pacific Partnership (TPP)

What Is the Trans-Pacific Partnership?

The Trans-Pacific Partnership (TPP) was a proposed free trade agreement among 11 Pacific Rim economies. The United States was included initially. In 2015, Congress gave President Barack Obama fast-track authority to negotiate the deal and put it to an up-or-down vote without amendments; all 12 nations signed the agreement in Feb. 2016. In Aug. 2016, Senate Majority Leader Mitch McConnell said there would not be a vote on the deal before President Obama left office.

Since both major-party nominees, Donald Trump and Hillary Clinton, opposed the deal, it was considered to be dead on arrival. Trump's presidential victory solidified that view, and on Jan. 23, 2017, he signed a memo instructing the U.S. trade representative to withdraw the U.S. as a signatory to the deal and pursue bilateral negotiations instead. 

Understanding Trans-Pacific Partnership (TPP)

The agreement would have lowered tariffs and other trade barriers among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. In the United States, the deal was viewed in the broader context of the Obama administration's military and diplomatic "pivot" toward East Asia, which then-Secretary of State Hillary Clinton outlined in an article in Foreign Policy magazine in Oct. 2011. 

In 2012, Clinton said the deal set the "gold standard in trade agreements." Her comment was likely in response to an unexpectedly fierce primary challenge from Senator Bernie Sanders. However, Clinton later said that she opposed the deal. Clinton's 2016 presidential campaign opponent, Donald Trump, also opposed the TPP and similar deals. Other trade deals Trump opposed included NAFTA, which Bill Clinton signed into law as president in 1993. NAFTA was a major focus of the Trump campaign in 2016. 

Debate Over the Trade Deal

Opposition to the TPP deal centered around a number of themes. The secrecy surrounding the negotiations was considered anti-democratic. In addition, opponents said that trade deals are believed to be the source of foreign competition that contributes to a loss of U.S. manufacturing jobs. Further, some in opposition were disturbed by the "investor-state dispute settlement" (ISDS) clause, which would allow corporations to sue national governments that violate trade agreements.

Supporters of the deal contended that trade agreements open new markets for domestic industries. These proponents claimed that TPP and other trade deals create new jobs and contribute to economic growth. They further maintained that opposition to the deals had a basis in partisan politics.

Alternatives to the TPP

Following Trump's order to pull the U.S. out of the TPP, other signatory countries — which had negotiated for seven years to finalize the deal — discussed alternatives.

One was to implement the deal without the United States. Australian Prime Minister Malcolm Turnbull reportedly discussed this option with the leaders of Japan, New Zealand, and Singapore following the withdrawal of the United States. A Japanese government official told reporters that the country would not continue to pursue the deal, however. The United States was by far the largest economy to have participated in TPP negotiations, and other countries likely considered the trade-offs involved as unattractive without access to the U.S. market.

China also pushed for a multilateral Pacific Rim trade deal called the Regional Comprehensive Economic Partnership (RCEP). The deal would link China to Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, India, Japan, South Korea, and New Zealand. On Nov. 15, 2020, leaders from 15 Asia-Pacific nations signed the agreement.

While in office, President Obama repeatedly emphasized the need to finalize the TPP, arguing, "we can't let countries like China write the rules of the global economy. We should write those rules."