Monday, October 5, 2015

The Impact of the Trans-Pacific Free Trade Agreement

The Trans-Pacific Free Trade Agreement (TPP) includes the U.S., Japan and 10 other nations (Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).  The goal is to connect these countries together by lowering trade barriers in an attempt to increase transactions and the economic engines of all the nations.

There are a few things we can expect from such an agreement:

Increased Trade: When barrier are reduce there should be an increase in trade and commercial activities. This should lead to higher levels of interaction and hopefully economic contribution.

Cultural Influence: Cultural values are transferred  through trade. Throughout history people visited, explored, and traded with people from other places and in term influenced and were influenced by them.

Counter to China: The agreement offers a counter-balance to China. Trading partners whose economies become more integrated with the U.S. are likely to be more included to lean toward U.S. interests.

Job Gain or Loss: When trade increased jobs should also increase.  If the U.S. is gaining access to new markets to sell high value products then there should be net gain. If trading partners dump cheaper products in the U.S. there could be net job loss.

Access to Resources: The trade agreement should provide access to cheaper resources that is used to fuel development and growth in the U.S.

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