An Overview of the Trans-Pacific Partnership

looking out on the pacific ocean over hills“When more than 85% of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy,” said President Obama in a statement to the press.

“We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.” The president’s remark, as covered in The New York Times, notes the possible significance of the Trans-Pacific Partnership, a long-negotiated pact between the United States, Japan, and 10 other Pacific Rim nations that could be the largest regional trade accord in history.

What would the Trans-Pacific Partnership do? Primarily, it could phase out import tariffs and other barriers to international trade (think Japanese regulations that keep out some American-made cars and trucks). According to The Office of the United States Trade Representative, the partnership could end over 18,000 tariffs that have been placed on American exports. For Nebraska, this is momentous, because many of these tariffs deal with agricultural products like wheat, pork, and beef from all of the Great Plains States.

Why do you need to know about TPP, if you do not already? First, it is crucial to understand that this is an incredibly politically sensitive situation. Although President Obama has reached the agreement with the other countries, the partnership must now make it through Congress, where it is expected to face quite a few challenges. Additionally, it will impact manufacturing in ways that we can predict, and ways that we cannot. The World-Herald reached out to several manufacturing and agricultural leaders in Nebraska to get their take:

“This trade agreement is a terrific opportunity to open up the market. We’re very encouraged in manufacturing by our capabilities over the long term to be competitive. Meanwhile, the industry is filling its skills gap at the same time the U.S. has gotten on track to eliminate net energy imports.” – Tony Raimondo Sr., Chairman of Behlen Mfg. Co

“Agricultural interests will not be well served with this agreement…TPP dangles the prospect and promise of new markets, yet when the trade data come in, food and ag imports increase at a faster rate than food and ag exports.” – John K. Hansen, President of the Nebraska Farmers Union

“Any time we have the opportunity to continue to provide markets for producers, whether that be producers of grain or value-added products such as red meats or ethanol, we feel that it is a great opportunity to diversify our opportunity for selling products into the world.” – Kelly Brunhorst, executive director of the Nebraska Corn Board

You can read more comments from local leaders here, but the key is to understand that there are differing opinions from a variety of interests in both agriculture and in manufacturing. Will the partnership damage manufacturing, labor, and agriculture sectors? Hansen seems to believe so, and explained more to the Grand Island Independent. However, Governor Pete Ricketts is in favor of the plan, particularly after his latest trip to Japan.

What do you think about the partnership? Will it hurt or help Nebraskan manufacturers?

photo credit: Mount Tam. via photopin (license)