Explain like I'm 5: The Trans-Pacific Partnership
Today the Trans Pacific Partnership (TPP) is due to be signed and with it the largest regional trade deal in history. What's it all about and why are so many people against it?
Redditor, thimblefullofdespair, gives a fantastic explanation about what the TPP is all about.
The Trans-Pacific Partnership is a multi-layered deal whose particulars have just been agreed upon by the twelve participating countries. Its stated purpose is to reduce tariffs - taxes on bringing your goods into a country or sending them out - and therefore encourage industry by making it cheaper for importers and exporters to conduct business between these countries. Its other stated goal is to create a set of easy rules that businesses can live by when dealing between these countries.
The TPP is far more complex than that, however. Its subtextual function is to serve as a foundation from which to spread that set of easy rules to other Asian nations, with an eye to preventing China from setting standards among these countries first.
The Obama administration is concerned that it's either "us or them" and that a Chinese-led trade agreement would set rules that American businesses would find problematic.
So what does it mean for you? Let's assume you are a citizen of one of the participating nations.
A deal like the TPP involves identifying which tariffs affect market access and competition by creating a market that favors some producers over others instead of letting price, quality and consumer preference decide. For instance, it is very expensive to bring milk in to Canada, so even if you could sell your milk at a lower price, you will have to account for the cost of the tariffs, which will make your milk uncompetitive on the Canadian market. New Zealand and the US both want to see Canadian dairy tariffs lowered so that their milk producers can sell on the Canadian market more easily.
When the market can decide and the barriers are down, we expect to see open markets offering more products/services than could previously have been made available. Prices should go down for certain products due to increased competition.
A deal with as many players as the TPP rarely functions on one-to-one trades; instead, each party has a list of things that they want and needs to go shopping around to find ways to get their positions filled - a chain of deals wherein, for instance, Japan pressures Canada on the milk issue so that they can in turn see motion on their own priority, such as car parts. This is why the negotiations have taken so long.
The TPP wants to standardize rules for trade among its participants, which cover a lot more than just tariffs and quotas. Other issues that have to be considered and negotiated include intellectual property rights and protections; rules regarding patents; environmental and labor regulations. In short, it tries to set standards on how business is conducted, both internationally and at home. It does this because uneven practices can result in uncompetitive market access.
This standardization is hoped to improve labor and environmental laws across the board, as the need to conform forces countries that have been lagging behind in their standards to catch up with the rest of the group. By setting rules that apply equally to the US as to Malaysia, it is hoped that people will be better off and enjoy more protections in their working environment.
To that end, the TPP will also have a process in place for what happens when someone breaks the rules - a tribunal which will decide based on terms laid out by the TPP instead of following the laws of any one government. This helps ensure that foreign companies are treated fairly and can conduct business under the same standards and with the same opportunities.
Tl;dr the TPP is out to make business between these 12 countries more fair, predictable and even. It should provide more choice in goods and services and more bang for your buck, while making labor standards improve for people outside of North America who may be operating under less protections than a Canadian or American enjoys.
However, why are people concerned about the Trans Pacific Partnership?
Tl;dr the TPP puts local industries at risk, threatens jobs, attacks your privacy, and you may be looking at paying more for important medications (either directly or through your government). It's being sold as lower prices and better standards across the board, but lower prices are meaningless by themselves - purchasing power is what you really want - and there is no guarantee that standards need to be raised instead of lowered.