Will the Trans-Pacific

Partnership Help the U.S. and

Global Economy?
Isabella Tilley
CAP 9
Blue group
10 May 2015

Will the Trans-Pacific Partnership Help the U.S. and Global Economy?

American politicians, such as Senator Elizabeth Warren and Senator Harry

Reid, argue that the Trans-Pacific Partnership will eliminate jobs, destroy the U.S.
economy and ensure environmental ruin. However, outsourcing ultimately benefits
the United States and the rest of the world. The Trans-Pacific Partnership will support
the export of American goods, allow small American businesses to benefit from trade,
as well enforce environmental protection and fundamental labor rights. Most
mainstream economists agree that opening foreign markets through trade
agreements is stimulating for economies. The Trans-Pacific Partnership will be
incredibly beneficial to the U.S. economy, and efforts to stop this treaty will close off
opportunities for foreign trade, which will effectively raise the trade deficit and
perpetuate job loss.
Outsourcing is the business practice of subcontracting work to foreign or
nonunion companies (ProQuest Staff, At Issue: Outsourcing). Outsourcing is a
powerful business strategy, and is used by almost all large corporations today.
Certain corporations have recently received criticism for outsourcing, most notably
Apple, Nike, Zara, and other garment manufacturers such as Forever 21, Adidas,
H&M, and Under Armour. Trade agreements typically promote outsourcing. The TransPacific Partnership (TPP), or Trans-Pacific Trade Agreement, is a treaty between 12
different countries, the United States, Canada, Mexico, Japan, Chile, Vietnam,
Singapore, Malaysia, Australia, Peru, New Zealand, and Brunei Darussalam; together,
these countries make up 40 percent of the global economy (Trans-Pacific Partnership
Environment Working Group Chairs). The Trans-Pacific Partnership aims to address
the export of American goods, the issue of small American businesses in relation to
free trade, as well environmental protection and fundamental labor rights (Trans-

Pacific Partnership (TPP): Unlocking Opportunity for Americans through Trade with the
Asian Pacific). One goal of the TPP is to strengthen the copyright protections of film
and music (DePillis). Another goal is to promote healthy growth of the private sector
in all member countries, which would be accomplished by limiting public support for
companies (DePillis). The TPP would also allow companies to sue governments for not
complying with the regulations of the agreement (DePillis). Currently, TPP countries
are discussing elements for a labor chapter that include commitments on labor rights
protection and mechanisms to ensure cooperation, coordination and dialogue on
labor issues of mutual concern (Labor Rights). The TPP also aims to help the
environment: the Parties [countries] are committed to promoting and encouraging
the conservation and sustainable use of biological diversity and sharing in a fair and
equitable way the benefits arising from the utilization of genetic resources (TransPacific Partnership Working Group Chairs). All of these aspects of the Trans-Pacific
Partnership will effectively promote trade and economic growth, while also enforcing
labor standards and environmental regulations.
Before World War II, an international economy existed, but it was not as large,
interdependent or productive as the global economy that exists today. The 1947
General Agreement on Tariffs and Trade (GATT) was created to facilitate international
trade, and laid the foundation for the multinational conglomerates seen today. The
objective of the GATT, according to its preamble, was to facilitate trade via the
"substantial reduction of tariffs and other trade barriers and the elimination of
preferences, on a reciprocal and mutually advantageous basis" (Modic, GATT/WTO).
By 1973, imports in foreign or multinational companies began to show that it had a
drastic effect on the U.S. economy. The American steel industry dropped from 47
percent to 20 percent, and out of every 10 radios sold in the U.S., 9 had been
manufactured abroad. In 1979, the U.S. allowed U.S. technologies to be transferred to
China, leading to a rise of American investments in Chinese manufacturing. In 1992,
the North American Free Trade Agreement was signed by Canada, the United States,

and Mexico. In 1995, the World Trade Organization was created, and removed trade
barriers between more than 130 member countries, leading to more global trade. By
2004, despite the benefits of increased world trade, a poll conducted by Marylands
Program on International Policy attitudes indicated that high-income Americans were
becoming anxious about their perceived consequences of free trade (ProQuest Staff,
Outsourcing Timeline).
Negotiations for the Trans-Pacific Partnership began in 2008 when Singapore,
New Zealand, Chile, and Brunei approached the United States for a goods-only treaty.
The United States was interested in adding services and investments to the deal, as
well as several other countries, including Peru, Australia, Vietnam, Canada, and
Mexico. Originally, Vietnam, Canada and Mexico did not join, but have since come in,
along with Japan and Malaysia (Schwab). In the future, even more countries are
expected to join the partnership (DePillis). The Trans-Pacific Partnership is part of an
American pivot to Asia, after too many years of American foreign policy being
bogged down by the Middle East (DePillis). Oddly, one major country that is being
excluded from the agreement is China. In an interview with Nina Easton, Susan
Schwab said that it would be difficult to include China in the TPP now that
negotiations are beginning to wrap up. Furthermore, there has been emphasis on the
TPPs high standards, many of which China does not meet (Tiezzi).
Despite the stimulus that the Trans-Pacific Partnership will provide for the
American economy, critics argue that the TPP will destroy American jobs and does
not do enough to protect the environment. In its release of the Environment Chapter
of the Trans-Pacific Partnership, WikiLeaks wrote: "When compared against other TPP
chapters, the Environment Chapter is noteworthy for its absence of mandated
clauses or meaningful enforcement measures" (Sheppard). Critics of the TPP
complain that the majority of environmental protection measures listed in the
chapter are voluntary, instead of binding. The lack of severity, critics worry, will lead
to more environmental ruin, as countries ignore the loose regulations. This fear has

been overblown: the Office of the U.S. Trade Representative released a statement
saying we [the United States] will insist on a robust, fully enforceable environment
chapter in the TPP or we will not come to agreement (Sheppard). According to the
Environment Chapter of the TPP text, all countries included in the treaty are
committed to policies and practices to improve environmental protection in the
furtherance of sustainable development (Trans-Pacific Partnership Environment
Working Group Chairs). The TPP also encourages its parties to phase out inefficient
fossil fuel subsidies that encourage wasteful consumption (Trans-Pacific Partnership
Environment Working Group Chairs). TPP opponents also often cite job loss as
another negative consequence of trade deals such as the TPP. Since the
implementation of NAFTA and the creation of the WTO, nearly five million American
manufacturing jobs one out of every four have been lost (Expose the TPP).
Though jobs have been lost, according to Susan Schwab in an interview with Nina
Easton for Smart Women Smart Power, with NAFTA a lot more jobs were created
than were lost. Also, according to Schwab, less than 2 percent of those who are
unemployed...have been unemployed by virtue of imports. Another common
argument that appears to be unique to the TPP is that the TPP will increase the
power of global corporations by creating a supra-national [sic] court, or tribunal,
where foreign firms can sue states and obtain taxpayer compensation for expected
future profits (Secret Trans-Pacific Partnership Agreement). However, according to
administration officials, the Investor-State Dispute Settlement accords create a
fairer environment for American companies doing business abroad, eliminate the
possibility of government seizure of property, and ensure access to international
justice (Weisman). Lastly, many opponents of the TPP cite NAFTA as having set a
precedent of unsuccessful and ultimately harmful trade agreements, but trade
negotiators have become more adept at including higher labor and environmental
standards in the many trade deals that followed NAFTA (Matthews).

In reality, the United States economy would not do very well without free
trade. An analysis done by think tank Third Way authors Jim Kessler and Gabe Horwitz
found that free trade agreements have lessened the trade deficit (Matthews). Other
benefits of free trade include new access to new overseas markets, (an obvious
benefit, according to Susan Schwab) and the benefit of better quality, more choice,
and less expensive products for American consumers (Schwab). Not only are there
benefits to free trade, there are repercussions for eliminating free trade: in 2013,
Texas exported $279.5 billion worth of goods to the rest of the world. This export
supported an estimated 1.1 million jobs. Without free trade, mammoth amounts of
money and jobs could be lost.
Free trade is a vital part of the United States economy, as well as the world
economy. The Trans-Pacific Partnership will promote free trade, therefore creating
millions of jobs and adding billions of dollars to the U.S. economy. The TPP will also
put new environmental regulations in place to help global climate change and
pollution. Opposition to the Trans-Pacific Partnership will be detrimental to the
economy, as well as the environment.

Works Cited

"FACT SHEET: Dallas Workers and Businesses Supported by Exports." Office of the
United States Trade Representative. N.p., n.d. Web. 30 Mar. 2015.
<https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2015/
february/fact-sheet-dallas-workers-and>.
DePillis, Lydia. "Everything You Need to Know about the Trans-Pacific
Partnership." Washington Post 11 Dec. 2013: n. pag. Print.
"How the Trans-Pacific Partnership Would Impact Off-Shoring of American Jobs."
Expose the TPP. N.p., n.d. Web. 31 Mar. 2015.
<http://www.exposethetpp.org/TPPImpacts_OffshoringUSJobs.html>.
Matthews, Chris. "Maybe the Obama Admin Is Right about Free Trade after All."
Fortune. N.p., 13 Feb. 2015. Web. 31 Mar. 2015.
<http://fortune.com/2015/02/13/free-trade-trans-pacific-partnership/>.
ProQuest Staff. "Outsourcing Timeline." Leading Issues Timelines. 2015: n.p.
SIRS Issues Researcher. Web. 15 Mar. 2015.
ProQuest Staff. "At Issue: Outsourcing." ProQuest LLC. 2015: n.pag. SIRS Issues
Researcher. Web. 15 Mar. 2015.
Schwab, Susan. "The Fraught Politics of Free Trade." Interview by Nina Easton.
Smart Women Smart Power. CSIS, n.d. Web. 31 Mar. 2015.
"Secret Trans-Pacific Partnership Agreement (TPP) - Investment Chapter."
WikiLeaks. N.p., n.d. Web. 30 Mar. 2015. <https://wikileaks.org/
tpp-investment/press.html>.
Sheppard, Kate. "WikiLeaks Exposes What Obama's Secret Trade Deal Would Do to
the Environment." Huffington Post. N.p., n.d. Web. 30 Mar. 2015.
<http://www.huffingtonpost.com/2014/01/15/tpp-environment_n_4602727.html>.
Trans-Pacific Partnership Environment Working Group Chairs. "Environment
Chapter: Consolidated Text." WikiLeaks. N.p., 15 Jan. 2014. Web. 30 Mar.
2015. <https://wikileaks.org/tpp2/static/pdf/
tpp-treaty-environment-chapter.pdf>.
Weisman, Jonathan. "Trans-Pacific Partnership Seen as Door for Foreign Suits
against U.S." New York Times. New York Times Company, n.d. Web. 30 Mar.
2015. <http://www.nytimes.com/2015/03/26/business/

Annotated Bibliography

Brownstone, Sydney. "The Trans-Pacific Partnership Isn't Boring. Here's What It

Means for Seattle." The Stranger. N.p., n.d. Web. 30 Mar. 2015.

<http://www.thestranger.com/blogs/slog/2015/03/30/21964969/
the-trans-pacific-partnership-isnt-boring-heres-what-it-means-for-seattle>. This
source offered more opposition to the TPP. This was helpful when writing about
criticism of the TPP.
DePillis, Lydia. "Everything You Need to Know about the Trans-Pacific
Partnership." Washington Post 11 Dec. 2013: n. pag. Print. Effectively
provides an in-depth explanation of the benefits of the TPP. Rather than
ignoring the problems left-leaning groups have pointed out with the TPP,
this article talks about how those "problems" are not actually
problematic.
"FACT SHEET: Dallas Workers and Businesses Supported by Exports." Office of the
United States Trade Representative. N.p., n.d. Web. 30 Mar. 2015.
<https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2015/
february/fact-sheet-dallas-workers-and>. This source gave information and data
about Dallass dependency on exports. It gave concrete, number-based evidence of
the United States need for free trade, and was helpful when writing about the
repercussions of not passing the TPP.
Groves, David. "50-plus Groups Urge Seattle to Pass No Fast Track
Measure." The Stand. N.p., n.d. Web. 30 Mar. 2015.
<http://www.noodletools.com/noodlebib/cite.php?ADD=Web%20Site>. This source
helped to give more context for TPP opposition concerning the environment. It was
not cited in the paper, but it helped to create a bigger picture of the arguments
against the TPP.
"How the Trans-Pacific Partnership Would Impact Off-Shoring of American Jobs."
Expose the TPP. N.p., n.d. Web. 31 Mar. 2015.
<http://www.exposethetpp.org/TPPImpacts_OffshoringUSJobs.html>. This source
was biased and its purpose was to stop free trade agreements such as the TPP. It
cited negative impacts of the TPP on the American job market, which ultimately
helped to show criticism of the TPP in relation to jobs.
"IT Outsourcing and the U.S. Economy." IHS. N.p., n.d. Web. 15 Mar. 2015.
<http://www.ihsglobalinsight.com/MultiClientStudy/
MultiClientStudyDetail846.htm>. This study showed that outsourcing promoted job
growth. It helped corroborate the sources and supported the statements made by
other sources.
"Labor Rights." AFL-CIO. N.p., n.d. Web. 10 May 2015. <http://www.aflcio.org/
Issues/Trade/Trans-Pacific-Partnership-Free-Trade-Agreement-TPP/
Labor-Rights>. This article explains how the TPP is expected to deal
with labor standards.

Matthews, Chris. "Maybe the Obama Admin Is Right about Free Trade after All."
Fortune. N.p., 13 Feb. 2015. Web. 31 Mar. 2015.
<http://fortune.com/2015/02/13/free-trade-trans-pacific-partnership/>. This source
supported the TPP and cited evidence of the benefits the TPP will bring to the U.S.
This helped to further support the arguments in favor of the TPP.

McKinsey Global Institute. Everyone's a Winner. N.p.: Economist, 2004. SIRS

Issues Researcher. Web. 15 Mar. 2015. <http://sks.sirs.com/cgi-bin/ hst-graphicsingle?id=SMD0990H-0-7238&keyno=0000064009&artno=0000064009&auth_chec
ked=Y>. This study offered evidence that trade deals such as the TPP are
beneficial to the American economy. This study supported arguments in favor of the
TPP.
Modic, Michelle, ed. "GATT/WTO." Duke Law. N.p., n.d. Web. 31 Mar. 2015.
<https://law.duke.edu/lib/researchguides/gatt/>. This source provided information
about the General Agreements on Tariffs and Trade. It gave more information about
how the GATT opened up a global economy.
ProQuest Staff. "Outsourcing Timeline." Leading Issues Timelines. 2015: n.p.
SIRS Issues Researcher. Web. 15 Mar. 2015. This timeline was incredibly helpful
and contained lots of information. It provided a history of outsourcing. It also cited
studies and information about outsourcing and its effects on the U.S.
ProQuest Staff. "At Issue: Outsourcing." ProQuest LLC. 2015: n.pag. SIRS Issues
Researcher. Web. 15 Mar. 2015. This source gave brief background information
about outsourcing. It illustrated how outsourcing is a business strategy and provided
information on how companies make money from outsourcing.
Schwab, Susan. "The Fraught Politics of Free Trade." Interview by Nina Easton.
Smart Women Smart Power. CSIS, n.d. Web. 31 Mar. 2015. This interview
contained support for the TPP, as well as information about its creation. Both the
interviewee and the interviewer support free trade and the TPP, and offered quotes in
support of the TPP.
"Secret Trans-Pacific Partnership Agreement (TPP) - Investment Chapter."
WikiLeaks. N.p., n.d. Web. 30 Mar. 2015. <https://wikileaks.org/
tpp-investment/press.html>. This article summarized the lengthy Investment
Chapter of the TPP. It also gave an explanation of criticism of the TPP.
Sheppard, Kate. "WikiLeaks Exposes What Obama's Secret Trade Deal Would Do to
the Environment." Huffington Post. N.p., n.d. Web. 30 Mar. 2015.
<http://www.huffingtonpost.com/2014/01/15/tpp-environment_n_4602727.html>.
This source gave information on the TPPs supposed negative environmental impacts.
It also included a section of a statement by administration officials in support of the
TPP.
"Trade Deficit." Investopedia. N.p., n.d. Web. 31 Mar. 2015.
<http://www.investopedia.com/terms/t/trade_deficit.asp>. This source provided a
concise definition of trade deficit.

Trans-Pacific Partnership Environment Working Group Chairs. "Environment

Chapter: Consolidated Text." WikiLeaks. N.p., 15 Jan. 2014. Web. 30 Mar.
2015. <https://wikileaks.org/tpp2/static/pdf/
tpp-treaty-environment-chapter.pdf>. This source contained the actual text of the
TPPs Environment Chapter. It was obviously helpful to be able to cite the actual text
of this chapter, which contradicted the statements made by those who oppose the
TPP because of its supposed lack of proposed environmental regulations.
"Trans-Pacific Partnership (TPP): Unlocking Opportunity for Americans through

Trade with the Asia Pacific." Office of the United States Trade
Representative. N.p., n.d. Web. 30 Mar. 2015. <https://ustr.gov/
tpp>. This biased explanation of the TPP gave a brief and lacking explanation of
the TPP. However, it did help to summarize the goals of the TPP.
Wallace, Scott. GM's Workforce Goes Global. N.p.: n.p., n.d. SIRS Issues
Researcher. Web. 15 Mar. 2015. <http://sks.sirs.com/cgi-bin/
hst-graphic-single?
id=SMD0990H-06392&keyno=0000119829&key=&type=ART&artno=0000290383&auth_checked=Y
>. This source gave information indicating that companies are becoming more
globalized.
Weisman, Jonathan. "Trans-Pacific Partnership Seen as Door for Foreign Suits
against U.S." New York Times. New York Times Company, n.d. Web. 30 Mar.
2015. <http://www.nytimes.com/2015/03/26/business/
trans-pacific-partnership-seen-as-door-for-foreign-suits-against-us.html?_r=0>.
This source offered criticism and support of the TPP. This helped to show arguments
against the TPP, as well as debunk the arguments against the TPP.