Trans-Pacific Partnership: Not a Great Deal for Asia

Kevin P. Gallagher

The American Prospect has a new special report titled “Pacific Illusions” that exposes the limits of the Obama Administration’s Trans-Pacific Partnership (TPP)—a proposed trade deal between the United States and eight other Pacific-rim countries.  The report features articles by Clyde Prestowitz, Lori Wallach, Jeff Faux, yours truly, and others.  This is a must read for anyone thinking about US trade policy and/or economic development.  Below are the first few paragraphs of my article that shows how the TPP will harm the development prospects for nations such as Malaysia and Vietnam. Read the full article at the link below, and be sure to check out the full report!

Not a Great Deal for Asia

The Trans-Pacific Partnership could end up hurting the broader economic interests of both the U.S. and smaller Asian nations.

The Trans-Pacific Partnership is best understood as President Barack Obama’s extension of the Bush-era doctrine of “competitive liberalization.” Frustrated with pushback at the World Trade Organization by nations like China, Brazil, India, and South Africa, the United States seeks a coalition of the willing to import a commercial framework that rewards private firms at the expense of the common good. That policy regime is ailing in the U.S. and gets worse when exported.

The Trans-Pacific Partnership (TPP) certainly isn’t about raising standards of living. The most ambitious estimates of the gains from the TPP suggest that participating nations will gain a mere one-tenth of 1 percent of the gross domestic product. Sixty percent of the projected gains go to Vietnam and the United States, and the other 20 percent goes to Malaysia—largely because the U.S. already has trade pacts with the other proposed big players in the TPP.

However, the proposed deal is far from popular in Asia. In exchange for the small portions of trade and growth that will go to some big exporters and foreign investors, each TPP nation will have to give up many of the policies they use to make trade and foreign investment work for employment, growth, and financial stability.

Read the full article at the American Prospect here.