Sample International Trade Term Paper on the Trans-Pacific Partnership Agreement

The Trans-Pacific Partnership Agreement


The TPP is a very vital trade agreement that was signed on 4 February 2016 in Auckland, New Zealand.  The trade agreement was deemed to bring on board the advent of real trading for its member countries.  The member countries consist of the Pacific Rim countries. Some of the areas of concern that this agreement addressed are the promotion of a profound economic growth, the raising of the living standards, innovations, and productivity, promotion of economic growth, the reduction of poverty, the support of the creation and the retention of the employment opportunities among others (Shan, & Su, 2015).  The negotiations of this agreement started several years ago, and the countries involved had several discussions that cut across every aspect of the economy and also the rules and regulations that are deemed to be beneficial to the industry as a whole. This paper looks at the various areas of concern on this trade agreement and how these are thought to affect the trading in different countries like the US, China, and the other central Pacific Rim countries.

Brief History

The Trans-Pacific tactical Economic joint venture Agreement is a free trade concord with the objective of liberalizing the restrictions and markets of the Asia-Pacific expanse and was started in 2005 by New Zealand, Chile, Singapore, and Brunei among others. Eight more nations have entered into the negotiations from 2008: Mexico, Vietnam, the United States, Japan, Australia, Peru, Malaysia, and Canada. China, who is one of the critical Pacific Rim countries, has not entered into this agreement so far.  The research study connotes that in as much it is economically beneficial if China entered into this trade accord, the country would only have intangible benefits from this trade.  So far, the USTR has talked about the agreement’s spotlight on the farming and automotive industries (In Voon, 2013). 

These concluded negotiations had been the foundation of much argument and criticism among regime officials, support groups, scholars, commerce, and the public due above all to the secrecy of the dialogue, the threatening penalty of the Intellectual Property episode to medicine, information, and customer good prices.

The economic effects of the agreement

The copyright constitutional rights that were discussed at TPP discussions have many alarmed over impacts on the right to use to medicine, data exchange via the Internet and value of consumer goods. Associate of Congress has once more been moved to tackle Kirk in an official letter which delineates their discrepancies as regards the TPP negotiations. Particularly, Senator Bernard Sanders and some of other Representatives were concerned that IP suggestion set forth by the United States could in consequence “dramatically amplify the cost of medicines”, thus restricting access to medicine in developing nations and contradicting the foreign rule stance of the Obama and preceding administrations (Schott, Kotschwar, & Muir, 2012). This notion has since been rectified and agreed upon by the member countries on the best ways to deal with it.

The IP subdivision of the TPP Concord also threatens to thwart many aspects of the two-pronged, Bush government’s 2007 New Trade concurrence that promotes growth and buffers communal health safeguards in emergent countries. The USTR has connoted that they have put alternatives on the table that intimidate to “roll back” these guiding principles. This would pilot to increased costs and less access to lots of consumer products, varying from medicine and schoolbooks to data on the internet; likewise, developing nations are put at risk of inequitable prices set by those who monopolize the market. The US has also insisted that definite TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) dimensions be included in the IP section which indeed was put into place. These policies considerably strengthen patents and other rational property rights on fundamental medicines and have been confirmed to limit significantly access to said drugs in emergent countries through soaring costs (Kirschner, 2011). The Doctors with no Borders group obtains a firm stance in opposition to the IP section of the TPP suggestion. They accentuate that “intellectual property fortification in the medical ground keeps prices elevated and limits access to care, and also, does not stimulate modernization for many of the ailments affecting populace in developing nations, where patients have inadequate purchasing power.”

Conversely, the IP proposals could advantage U.S. foreign strategy in regards to China. The China a country had an interest in observing the TPP discussions since not only are they besieged to keep the worth of the Yuan stumpy to keep attracting FDI. But are also interested in the continual liberalization of its neighboring counterparts’ borders is building other players in the expanse increasingly aggressive in regards to attracting overseas business. A mounting number of countries in the region joining the trade conformity, dropping trade restrictions and providing discounted labor devoid of the bad reputation for manufactured goods quality fade and contravention of IP rights, will make available plenty of alternatives for overseas businesses looking to advance in the area. It is factual that China is challenging to move its financial system away from being a mechanized powerhouse and into the subsequent stage of development; however the threat of an immense outflow of foreign trade, and the capital it gives cannot be ignored (Kirschner, 2011).

Thus, if the country joined the TPP to maintain its advantage, subsequently it will have approved to adopt the overseas trade policies brought forward by the trade agreement. This would mean that strict rational property rights will assist to ease the anxiety many have about China’s continual contraventions of property rights and universal theft of R&D and analytical property. Although being limited to an international accord and implementing (let alone practicing) the characteristics of the agreement are quite dissimilar matters, the added inspection China would be conditional on under the TPP could assist make easy a fairer production environment? A report produced by the USTR in 2012 pointed out a list meant for countries alleged of failing to meet up IPR requirements:

“assignment of a trading associate on the primary concern Watch List or Watch List point to that particular problems continue living in that country with admiration to IPR protection, enforcement, or marketplace access for people relying on intellectual possessions. Countries placed on the primary concern Watch List are the focal point of increased bilateral concentration concerning IPR protection, implementation, or market access for people relying on intellectual possessions.

Access to new markets, job loss

To conjecture the consequences the TPP may encompass on the U.S.; it is essential to look to the trade and industry effects of earlier period FTAs. When Canada, the U.S., and Mexico put into practice NAFTA, the U.S. saw augmented exports and a GDP expansion rate of 3.3 percent yearly (compared with 2.7 percent for Mexico and 3.6 percent for Canada). The eleven countries at present involved with the TPP constitutes to about 40% of global GDP, offering a significantly larger opportunity than NAFTA provided. The TPP is one of the major FTAs in the account, and the trade possibility and subsequent impact on a getting better U.S. economy are enticing. Additionally, as stated above, this deal could help improve some of the reliance the U.S. has on Chinese commerce.

This does not signify that there is no apprehension that ease of right to entry to these markets will effect in more joblessness for Americans. Low employment wages and costs of doing trade will encourage firms and big business to subcontract jobs. In line with Robert E. Scott of the Monetary Policy Institute, NAFTA culminated in roughly 682,900 American jobs put out of place as of 2010.

The KORUS FTA (Korean-U.S. complimentary trade conformity) effected on March 15, 2012. Census Department trade information for March 2013 proves that while U.S. importations from other nations rose by 3%, goods from Korea rose a confounding 18%. Regrettably, this correlates with U.S. goods exportations declining by 6% to the globe and 8% with Korea. Lastly, the U.S. trade shortfall with the world increased to 21% in January but ascended to 81% with Korea. The U.S. deal shortfall with Korea escalated an all-time elevated the identical month, capping at $2.4 billion. Additionally, the KORUS FTA, which centers on facilitating a deal in agriculture and power, has culminated into U.S. beef, pork, and fowl exports declining by 9%, 25%, and 45%, respectively, in 2012. Moreover, there has been a 12% augment in auto trade shortfall with Korea, and a net trouncing of 9,000 U.S. employments so far.

On the other hand, the USDA connotes that there was an eruption of foot and mouth ailment in Korea in 2011, prompting the government to diminish tariffs with the intention of making up for the local scarcity of pork and meat. Thus, the nation had a larger stock of the fresh produce than ever in 2012, which lead to the reduction of these U.S. exports to the state. Nonetheless, the U.S. reached the second uppermost level about beef and pork exportations in 2012, regardless of the decline from the preceding year. Additionally, U.S. exports of customer-oriented agricultural goods reached a record lofty of $2.8 billion for the period end December 2012. Non-beef items such as almonds, oranges, and cheese traded to Korea have been increased to up to 109% (Hunter, Shannon, & Lozada, 2013)..

Comparing collective U.S. trade shortage with FTA associates and non-FTA associates gives additional insight into the special effects that FTAs are having on the U.S. economy. By enchanting the price rises-adjusted U.S. trade equilibrium in goods for all present FTA associates in the year previous to each conformity went into upshot and the U.S. trade equilibrium in 2012, and contrasting it to the U.S. trade poise with non-FTA nations in 2006 (the year prior to the median entry date of current FTAs) and the U.S. trade equilibrium in 2012, one is be able to see that the U.S. trade shortfall with FTA nations increased by 441% and diminished by 7% with all non-FTA states (Casper, 2015).

It is apparent that precedent FTAs have culminated in an increased U.S. trade shortfall and job loss. This ought to be compared with the augmented exports, income, and prospects for American troupe in related business. American employment is lost because commodities made outside the U.S. replace merchandise made in the interior the U.S., but also since American firms are capable of finding the manual labor, resources, and marketplace they need exterior of their home country. Furthermore, these FTAs make available Americans with the right of entry to foreign goods that they undoubtedly have a strong craving for (Blodgett, & Hunter 2010). The difficulty is whether or not the reimbursement of these FTAs overshadows the expenses to Americans. A lot of in-depth examinations is required with the intention of answer this query. What we can study from this investigation is that the TPP, owing to its immense size, is almost certain to contribute to a great extent to three effects: loss of American employments increased U.S. trade scarcity and increased U.S. exportation and revenue in effected manufacturing sectors.


As it stands, the Trans-Pacific Partnership is an enormous opportunity for all nations involved. There is much confidentiality surrounding discussions, and the impacts of the tremendous intellectual property constitutional rights are impedingly dangerous. Less right of entry to vital medicines, higher customer goods prices, data restriction on the web, and a retardation of medical modernization are startling possibilities. additionally, these IP policies intimidate to roll back many of the necessities brought forward by the 2007 New Trade arrangement designed specifically to neutralize negative influence that TRIPS has on the medicinal industry; this directly disagrees with U.S. foreign guidelines of the current and previous presidential administrations. The U.S. deal deficit with the nations involved is almost certain to increase, and American employments will be lost. On the other hand, to counteract the depressing, there will be a new opportunity and income for American firms exaggerated by the reductions in import taxes and better access to exceedingly demanded foreign goods. Negotiations have been concluded, and now we wait for the action of the agreement to fall into place.


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