Officials from the United States and 11 other countries bordering the Pacific Ocean are trying to complete a trade agreement by the end of the year that could help all of our economies and strengthen relations between the United States and several important Asian allies. But hard bargaining lies ahead.
The Obama Administration says it wants a “next-generation” agreement that, in addition to cutting tariffs, lowers investment restrictions, improves labor rights, encourages environmental protection, and reduces government favoritism toward state-owned businesses. That is an ambitious agenda, considering that more than 150 countries are struggling to complete a much simpler deal at the World Trade Organization.
The Trans-Pacific Partnership, as these talks are known, is seen as a way around the stalled WTO talks, which have been under way since 2001. So too are the recently started trade negotiations between the United States and the European Union. The hope among some American officials is that by completing deals with Europe and Pacific nations, Washington will set an example for the rest of the world to follow.
The 12 Trans-Pacific countries — the United States, Canada, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Singapore, Brunei, Australia, and New Zealand — together account for about 40 percent of the global economy.
The United States has trade agreements with some of these countries. But reaching agreement will be more complicated with others such as Vietnam, which has an authoritarian government and an economy dominated by state-owned firms, and Japan, which is reluctant to lower barriers to agricultural trade.
Because of the broad scope of these talks, negotiators are grappling with many difficult issues. We have expressed concerns about a controversial American proposal that could limit the ability of the Trans-Pacific countries to regulate the sale of tobacco products.
Others are worried about provisions on intellectual property that could restrict the availability of generic medicines and grant longer copyright protections to big media companies.
A good agreement would lower duties and trade barriers on most products and services, strengthen labor and environmental protections, limit the ability of governments to tilt the playing field in favor of state-owned firms, and balance the interests of consumers and creators of intellectual property. Such a deal will not only help individual countries, but also set an example for global trade talks.