US Battles China over Free-Trade Rules in Push for Trans-Pacific Partnership

Representatives from 12 nations in the Americas and the Asia-Pacific region are meeting in Hawaii this week to finalize negotiations for the Trans-Pacific Partnership (TPP). If all goes to plan, they may reach a deal by Friday. Many consider the proposed treaty to be one of the most important free trade agreements since the United States, Canada, and Mexico entered into the North American Free Trade Agreement (NAFTA) in 1994.

Representatives from 12 nations in the Americas and the Asia-Pacific region are meeting in Hawaii this week to finalize negotiations for the Trans-Pacific Partnership (TPP). If all goes to plan, they may reach a deal by Friday. Many consider the proposed treaty to be one of the most important free trade agreements since the United States, Canada, and Mexico entered into the North American Free Trade Agreement (NAFTA) in 1994.

The 12 markets represented at the negotiations include the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together, these nations equate to about 40 percent of the world’s gross domestic product.

According to a report by the South China Morning Post, for America, the TPP has a political element. The Obama Administration has expressed interest in creating a treaty that allows America, rather than China, to dictate the “rules of the road” for 21st century economic issues like intellectual property rights in the new digital economy.

The key development of the US Congress’ passage of the Trade Promotion Authority may facilitate passage of the treaty.  This new authority allows the White House to negotiate international trade deals without major congressional interference once negotiations are complete. In this case, negotiations for the TPP have taken more than five years, so a last minute setback by way of congressional interference could be devastating. Of course, the House of Representatives and Senate must still approve or reject final agreements, but they may not amend them.

While the deal appears likely to go through this week, analysts say a few obstacles remain. In the United States, the deal is controversial thanks to concerns about jobs lost overseas. Other nations have similar concerns, with several fearing that China could gain the upper hand through inadequately drafted trade rules.

Still, if the deal goes through, it could count as a huge win for US international policy in the Asia-Pacific region. This area is a high growth region, and passage of the treaty could help boost the US role in these markets. While some have referred to the less favorable results of the NAFTA agreement as a reason the US should avoid participation in the TPP, the overall benefits and opportunity to protect US intellectual property interests abroad will likely prove far too enticing to pass up.

Moreover, many believe that cementing this deal before the end of his term could be a huge win for the Obama administration and a boost for any Democratic candidates seeking to take over the presidency once his final term concludes.