Recapping this month’s EDG meeting: “What the heck is the TPP? Why the hell should I care?”
As part of the SMDC’s ongoing Global Commerce Initiative, this month’s EDG meeting focused on the Trans Pacific Partnership. The Trans Pacific Partnership, more commonly referred to as the “TPP,” is a trade agreement between 12 countries in the Pacific Rim. There are a number of high-level similarities that can be drawn between this agreement and NAFTA, many of which are highly debated.
The goal of our meeting was to provide members with a more detailed understanding of the TPP overall and its potential impacts on the business community. We invited three distinguished panelists to join us for a balanced discussion. Dr. Ved P. Nanda, Professor at Evans University and Denver University’s Sturm College of Law, gave a thorough background on the topic. Louis “Kip” Cheroutes, President of LXC Strategies, Inc. and Japan-U.S. Network, Inc., represented the pro-perspective. Kjersten Forseth, Political Director of the Colorado AFL-CIO, provided insight into the TPP’s opposition.
So… what the heck is the TPP, exactly?
The TPP sets national commitments in exchange for the elimination of 18,000 tariffs between the United States, Australia, New Zealand, Malaysia, Brunei, Singapore, Vietnam, Japan, Canada, Mexico, Chile, and Peru. The agreement’s 30 chapters set standards to regulate commerce, governance, and the treatment of people across all participating nations. The TPP also seeks consistency with existing global WTO and GATT standards, as well as, existing trade agreements within the region.
Implementation of the TPP is planned through one commission, comprised of a variety of committees and forums. The implementation process will take place slowly with reviews every five years, although some timelines and thresholds have been preset.
As is commonly the case with these types of agreements, ‘the devil is in the details.’ Those opposed to passage of the TPP fear too much has been left to the commission’s interpretation during implementation.
“This is worse than the NAFTA agreement,” says Forseth. Drawing on the implementation of NAFTA over the last twenty years, Forseth raises concerns over workers’ rights and labor standards. She highlighted that the TPP agreement does not guarantee the creation of jobs and lessens the power of unions while simultaneously giving more control to big business and global banks.
Although there is little argument that issues will arise throughout implementation, Cheroutes believes, “TPP keeps America in the global commercial driver’s seat.” The elimination of the 18,000 tariffs within the agreement play a critical role in strengthening commerce and trade partnerships with Pacific Rim countries.
How does this affect the South Metro Denver region?
Drilling down to Colorado’s export market, passage of the TPP opens up greater opportunities for a wide variety of industries. Not only does TPP impact the meat industry of Northern Colorado and fruit growers of the Western Slope, the agreement includes key provisions to protect intellectual property rights for industries like aerospace - which is an undeniable force in the South Denver Metro economy.
Beyond intellectual property protections, the TPP includes the U.S.-defined concepts like contract appeal rights, due process, transparency, prompt payment, regulatory impact assessment, corporate social responsibility, consumer protection, public participation and public comment. In many ways, the inclusion of these concepts has kept China from participating in TPP negotiations.
“You cannot separate the economic and security impacts,” says Nanda. Strengthening relations between the United States and key allies, like Vietnam, lessens China’s stronghold on the region. Nanda argues it’s critical for the United States to remain a presence within the Pacific Rim to continue to compete with China globally. This is an important development on both the United States’ economic and national security fronts.
The Trans Pacific Partnership is a complicated, nuanced topic - one that impacts the United States as a whole, as well as businesses right in our own backyard. We would like to thank our panel of experts and all of the attendees for participating in this engaging and informative event. The Chamber will continue to explore and discuss topics like this as part of the Global Commerce Initiative. Watch for more information and additional resources on the website.