Fireside Chat, Interview
Trans-Pacific Partnership: A Conversation with U.S. Trade Representative Michael Froman
- The administration aims to pass the Trans-Pacific Partnership (TPP) and complete the Trade in Services Agreement and environmental goods agreement within the current calendar year, with the TPP specifically targeted for completion before the end of the Obama administration to avoid indefinite delays under a successor.
- Economic projections from the Peterson Institute estimate a $90 billion cost of delay to the U.S. economy, while full implementation is expected to add $130 billion to the economy and increase annual exports by $350 billion, with every billion in exports supporting 5,000 to 7,000 jobs that pay up to 18% more than non-export sectors.
- Failure to secure the agreement will result in persistent trade barriers, including 70% tariffs on autos in Vietnam and 38.5% tariffs on beef, while widening the competitive gap with Australia in beef exports and allowing the U.S. to miss access to over three billion middle-class consumers in the Asia Pacific region by 2030.
- Political risks include the difficulty of passing the legislation before the election campaign concludes, potential搁浅 if a new president takes office, and the impact of proposed 45% tariffs on Chinese imports and 35% tariffs on Mexican imports, which are predicted to cause recessions, job losses, and retaliatory measures under WTO rules.
- Specific concessions include an eight-year term for biologics data protection, representing a compromise between countries with zero, five, or eight years of prior protection, and the inclusion of a statement of administrative action to define U.S. interpretive intentions within the implementing bill.
- Broader trade strategies involve accelerating the Transatlantic Trade and Investment Partnership (TTIP) despite centrifugal forces in Europe, leveraging the agreement to pressure China to improve standards, and ensuring that California, currently exporting $170 billion annually, and other U.S. regions adapt to the shift in global trade gravity toward the Asia Pacific.