On President Donald Trump’s first official workday, he implemented the promise with a stroke of the pen to withdraw the U.S. from the Trans-Pacific Partnership (TPP) negotiation.
The TPP is an international trade agreement between the U.S. and 11 other countries. The agreement created a partnership involving economics and trade between Pacific nations by reducing or eliminating trade regulations on most goods and services. The New York Times estimates the TPP covers $28 trillion of annual gross domestic products, which accounts for approximately 1/3 of the global trade.
Obama’s Administration considered the TPP a precedent which would open a new era of free trade, promote the economy of Pacific nations, and restrain the increasing influence of China in Asia. In February 2016, the 12 countries gathered and signed the TPP agreement.
Nonetheless, the deal still needed two more years of ratification in six countries that represents 85% of the 12 TPP countries’ economic output.
Since the U.S.’s participation was a key factor in creating the TPP, Trump’s decision to pull out has imposed a hit on the deal. Trump explained his reasoning, stating that “The agreement would also force American workers to compete directly against workers from Vietnam, one of the lowest wage countries on Earth.”
Because of globalization, many American businesses outsource their productions overseas to take advantage of cheap labor and low tariffs. Companies built their factories in developing countries like Vietnam, Malaysia and Mexico and then import goods back to the U.S. Trump believes the outsourcing process is a thievery of job opportunities for Americans. Trump decided to ban the TPP to bring back manufacturing to the country, protect workers’ rights, and “make America great again.”
In fact, before Trump’s criticism, the TPP deal was already controversial with supporters and opponents. Even Hillary Clinton once pointed out weaknesses of the agreement at her campaign, “I will stop any trade deal that kills jobs or holds down wages – including the TPP.”
Yet, most people think of the TPP as a loss for America while ignoring the devastation to developing countries with the free trade system. Most Americans consider southern workers from underdeveloped countries as stealing jobs from Americans. Northern manufacturers pay very little salaries to workers outside of the U.S. where it is not enough to pay for their personal expenses. And, to reduce production cost, American corporations are reluctant to purchase necessary equipment for a safe and healthy environment, causing many workplace accidents and deaths.
Meanwhile, as tariffs, trade regulations, and barriers to protect the southern domestic economy are eliminated, local entrepreneurs from developing countries cannot compete with the influx of foreign goods from America. In the end, the TPP threatens both workers’ rights and national economies in developing countries.