QuickTake Q&A: Why Democrats Are Chanting ‘No TPP’ at ConventionBy
At first blush, the "No TPP" signs at the Democratic National Convention might suggest some kind of derogatory adjective being applied to the Trump-Pence Republican ticket. In fact, Democrats waving those signs are rallying against the Trans-Pacific Partnership, the trade deal that has driven a wedge between many Democrats and their president, Barack Obama. The animosity is a reminder of how difficult it will be for Obama to win congressional ratification of the trade deal before he leaves office in January 2017. With Democratic nominee Hillary Clinton a late convert to the TPP opposition -- and her running mate, Tim Kaine, an even later convert -- it seems clear that the next president will be, at the very least, less of a TPP fan than Obama is.
1. What’s the TPP?
The Trans-Pacific Partnership, known in some countries as the Trans-Pacific Partnership Agreement (TPPA), was negotiated by 12 nations representing 40 percent of the world’s economy -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam. It would expand free-trade rules to agriculture and services, encompass the digital economy and offer stronger protections for intellectual property.
2. Where does it stand?
After five years of work, representatives of the 12 nations signed the deal in February, though much of the heavy lifting is still ahead. To take effect, the deal has to be ratified by February 2018 by at least six countries accounting for 85 percent of the entire group’s combined gross domestic product. That can’t happen without the U.S. and Japan. There’s popular and political opposition in most of the 12 countries.
3. Why is the Obama administration for the TPP?
The trade deal "levels the playing field for American workers and American businesses" by "eliminating over 18,000 taxes -- in the form of tariffs -- that various countries put on Made-in-America products," the U.S. trade representative’s office says on its website. Obama, in an April 2015 address, called the TPP "the highest-standard trade agreement in history," with "strong provisions for workers and the environment."
4. What’s the rap on the TPP?
Critics say the trade deal puts the interests of multinational corporations above all else, including the well-being of workers and the environment. The behind-closed-doors nature of the negotiations only heightened the concerns that business lobbyists were shaping the deal for their clients’ interests so that, for instance, drug prices will go up.
5. What’s the outlook in the U.S.?
The TPP is the rare issue that unites Obama, a Democrat, and the Republican leadership of the Senate. But critics span the political spectrum, from labor groups to Tea Party conservatives. Opposition to the TPP helped propel Donald Trump to the Republican nomination and helped fuel Vermont Senator Bernie Sanders’ challenge to Clinton, making congressional ratification look like even more of a long shot. Unless Obama manages to win approval this year, the treaty’s future will be up to the next president. Trump has denounced the TPP as "a rape of our country." Clinton once voiced support for the TPP but came out against it in 2015, saying it needs significant changes.
The Reference Shelf
- A QuickTake Q&A on how global trade divides Clinton and Trump.
- A QuickTake explainer on the feud over free trade.
- A story on protests at the Democratic National Convention.
- A Bloomberg View editorial on the case for free trade.
- A story on likely U.S. beneficiaries of falling tariffs.