The Trans-Pacific Partnership

David Salgado Economic Justice Advocacy Intern
July 11, 2012

The riches of creation were to be considered as a common good.
Pope John Paul II

David C. Salgado

The Trans Pacific Partnership Agreement 13th round of negotiations was held in San Diego, California from July 2 – 10. This means that the TPP is at an advanced state of negotiation with big implications not only for the U.S. but also for all of the now 12 members of the partnership including the countries where the Columban missionaries are present; U.S.A., Australia, Chile, New Zealand and Peru. The TPP is meant to be the most ambitious agreement so far and is intended to lead to a Free Trade Area in the Asia-Pacific region. As it is planned, the TPP is projected to yield annual global income gains of $295 billion with a share of $78 billion for the U.S. but the gains are even bigger if the goal of developing a Free Trade Area in the Asia-Pacific is met, with the potential gains of $1.9 trillion according to the Peterson Institute for International Economics.
There is very little knowledge about the TPP as all the negotiations are held behind closed doors and the documents as classified. It is important to make sure that the rules and terms negotiated are fair to all stakeholders and for that reason is important to have a public negotiations.
A major criticism of this agreement highlights the economic disparity among the countries included in the agreement. On one hand the U.S. is the largest economy of the partnership, but on the other hand countries like Peru have very different economic reality; these differences bring many challenges to the agreement particularly when negotiating the guidelines as all the members must comply with them. The playing field is not level.
However, looking at the comparative advantages of these countries is also helpful to understand the agreement. As it was said above the diversity of economies participating in this agreement is big; the Asian countries consist of mainly developing economies with comparative advantages in the manufacturing sector, while the U.S. and other developed economies have comparative advantages in services, investment and property rights. Hence, the potential gains in each side are large, and this is primarily because developing countries will have access to new markets for their manufacturing industries while the developed countries will have a set of standardized rules for services, investment and property rights (including those of technology).
As the Bible said “Whoever has this world’s goods, and sees his brother in need, and shuts up his heart from him, how does the love of God abide in him” (John 3:17); it is important to be mindful that the dangers of the TPP are great with the most vulnerable of society at greatest risk. Similar to other free trade agreements like NAFTA, Korea FTA, Chile FTA and Peru FTA, we expect that if implemented This is a new kind of free trade agreement, it is wider than the NAFTA and the consequences expected are way bigger too. But the consequences of NAFTA have been critical to the poor reaching up to two million Mexican farmers pushed out of their lands. It is important to make sure that all the benefits of this agreement will reach all the society and especially protect those in needs.