The Trans-Pacific Partnership, Defined

Read the what, who, where, and why of the TPP below.

International trade has been a hot topic of debate among our political leaders. However, many of the same leaders who have criticized trade and the Trans-Pacific Partnership (TPP) have also spoken to the critical importance of growing our economy, empowering small businesses, and boosting American power and prestige around the globe. That’s why it’s hard to understand the opposition to international trade agreements, including the TPP. So what is the TPP, and how would it benefit American businesses, farmers, workers, and families?

WHAT:

The TPP is a 21st century trade agreement that cuts more than 18,000 foreign tariffs (taxes) on U.S. goods exports and tears down foreign barriers to entry that are currently keeping American farmers, small businesses, online sellers, and others from selling their goods and services to customers outside the United States. Here is a breakdown of the TPP benefits for U.S. workers, farmers, and businesses.

  • For American workers: The data already shows that U.S. workers in export-intensive industries earn higher wages, approximately 16 percent higher on average, than non-export-related jobs. Furthermore, trade with TPP partner countries already supports more than 15 million U.S. jobs. The TPP agreement will create new opportunities for the U.S. to increase exports and support higher-paying jobs.
  • For American farmers: The TPP will boost annual net farm income by $4.4 billion, according to an analysis by the American Farm Bureau Federation. Today, one in three U.S. farm acres is planted for export; and in 2010, $115 billion in American agricultural products were exported globally. What’s more? 31 percent of U.S. gross farm income comes directly from exports. Our farmers need fair trade rules to ensure their competitiveness in the global economy.
  • For American businesses: The TPP eliminates over 18,000 foreign taxes on U.S. goods — including all manufactured goods and many agricultural products (some up to 800 percent) — exported to the TPP countries. That number is a pretty big deal when you consider that 45 percent of U.S. goods were exported to TPP nations in 2014.

The TPP levels the playing field for American workers and creates new opportunities for American farmers, ranchers, and businesses of all sizes.


WHO:

The United States and 11 nations along the Pacific Rim, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. A free trade agreement (FTA) with these nations is an opportunity for the United States to open and expand these markets for U.S. goods and services, and pave a path to global success for American workers and businesses.

World trade between FTA partners has increased steadily: in 2009, approximately 45 percent of nonagricultural, and 54 percent of agricultural, trade was between FTA partners. As of 2010, there were 290 FTAs globally — and nearly 200 of these were enacted in the last decade. The United States, on the other hand, has only enacted eight FTAs with thirteen countries since 2003.

But it’s clear that our businesses and farmers rely on FTA partners. From 2009 to 2015, United States exports increased to nearly all FTA partners; in 2015, 21 states exported more than 50 percent of goods to our U.S. FTA partners. Our businesses and farmers depend on trade agreements to keep their goods and services competitive in a global economy.

We know that global trade — with or without FTAs — isn’t going to stop. If the United States is to operate on a level playing field with its global competitors, we need trade agreements like the TPP. Otherwise, exports of U.S. products to TPP countries will cost more than exports from third-party countries with their own FTA(s) with TPP countries.


WHERE:

The Pacific Rim, which, according to the U.S. Trade Representative, produces nearly 40 percent of global gross domestic product, represents 40 percent of the global population and some of the fastest growing economies in the world.

The 12 TPP Nations Surround The Pacific Rim.

WHY:

Fundamentally, trade ensures our competitiveness in the global economy, supports farmers, ranchers, and businesses of all sizes, and promotes our position as a global leader.

International trade enables American families, businesses, and communities to move forward in the direction of prosperity and new opportunities. Whether it is a custom LED lighting company in Louisiana with 30 employees, a 17-employee Washington state winery, a growing Denver-based beauty products company, or a global innovator like Dow Chemical or one of its many U.S. suppliers — hundreds of thousands of U.S. businesses of all sizes benefit from selling their products to customers abroad.

Passing the TPP will increase those opportunities. In fact, American businesses face some of the highest foreign tariffs in the world, which hurts U.S. businesses, farmers and workers and their local economies. Research from the Peterson Institute for International Economics finds that failure to implement the TPP, even by one year, would represent a $94 billion permanent loss to the U.S. economy.

But the TPP is not just about economic benefits — it is about U.S. global leadership.

Former Secretary of State Madeleine Albright, along with Former National Security Adviser under President George W. Bush, Stephen Hadley, and former Secretary of State James Baker III, in a statement on the benefits of the TPP, stated that, “this agreement is an important example of the kind of global leadership America should provide and is firmly in our national security interest.”

The TPP will bolster American alliances with countries in the Asia-Pacific, one of the most geopolitically consequential regions of the world, going a long way to securing our national security interests.

In fact, eight former Defense Secretaries stated, in regards to the TPP, that “the benefits to our economy and national security cannot be overstated.”
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