Sunday, April 26, 2015

Fast Track, Japan, and the Trans-Pacific Partnership

           Recently a bipartisan bill to give president Obama “fast track” authority on trade deals was agreed on by congress. Essentially “fast track” is an expedited process in which congress either votes a trade policy – which consists of domestic laws and tariffs negotiated and agreed upon by the President – up or down without amendments and within a fixed period of time.  The bipartisan bill increases the likelihood that the Trans-Pacific Partnership (TPP) will pass; however there are two major factors to consider. First, the congress must agree on passing the TPP. Second, the Japanese government is unlikely to make major tariff cuts in order to protect its farmers. The U.S. Congress has been cautious with the TPP since Japan has been sly to direct the U.S. attention away from Japanese protection tariffs and towards the containing-China’s economy. Personally, I don’t understand why the United States is so interested in containing China when the world would gain most in the long run if China was included in the TPP.  I could see Japanese tariffs having a larger negative impact on the welfare of U.S. farmer in comparison to increasing trades with China. Furthermore, in Martin Wolf’s The Shifts and the Shocks, Wolf writes that emerging economies did so well after the crisis since China did so well, but now that the Chinese economy’s growth has slowed down significantly all emerging markets are facing challenges (p.105-107). So why would it not be beneficial for China to join the TPP if other economies would experience growth as well?
Regardless of the inefficiencies that may be caused by not including China in the TPP, at least some of the lesser developed countries would interact with more developed countries and reform could occur for areas of intellectual property, and environmental and labor standards.

            Overall, fast-track to the TPP is essential in letting it pass congress. Otherwise many amendments would be made and the TPP would take a long time before passing. I feel that fast-track may not be the best option since some countries (i.e. Japan) are favored by the policy while others are bound to lose (i.e. U.S.). Also I do not fully understand why China is of large concern to the United States.


7 comments:

  1. Based off this article, it sounds like this could potentially be a good deal. It also seems that there are not enough known details to actually have an opinion on whether the deal would be successful though. The concern with China is akin to the US v. USSR back in the Cold War era. It is strictly an issue over influence and power, although the stolen US copyrights may also play a part.

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  2. To answer your last question, I think the US is concerned about China because the stronger China grows the more threat it poses to the US both financially and in terms of world power. Exactly like Nolan mentioned with the USSR. We do not want China in on a trade agreement that would spark further growth for them. Rightfully so, I think the US is worried about the possible outcomes of China having too much power.

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  3. I complete agree with Ty and Nolan. It isn't that we don't want to see China be successful, we just hesitate to see them become as powerful as quickly as they have, especially in terms of their economy over the last 20(ish?) years. And of course, this pact would just give them more of exactly that...power.

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  4. I have to agree with Nolan, Tyler, and Alex that its not that we don't want China to be unsuccessful, but we just are as Alex said hesitate because they have become such a powerful economy so quickly. By accepting China into the TPP we will give China and their economy even more power and as of right now we are unsure if that is what we want as a nation in our international policies.

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  5. It is hard to trust a country that makes up statistics and reports faulty numbers that economists can't even figure out. I don't think this would either make or break the country in terms of gaining power, but it does give them power that we don't want to support. While the ideology is good, I think a lot of the problem is trust and fear in China gaining power.

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  6. There is a lot of unknown information about this deal, which makes it difficult to predict how successful or unsuccessful it will be. I also agree, that the US fears China being accepted into the TPP because this could offer a deal for China to gain more world power politically and financially.

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  7. To be truthful, I am not really sure as to whether or not this agreement would be more of a benefit to the U.S. or China. However, I think everyone touched on key points to consider as to why the U.S. is concerned about China being apart of the TPP deal. There seems to be a major trust issue and fear of the uncertainty. Because, if China gains more power in the global economy, where does that leave the U.S.? Meaning, China has been a major lender for U.S. and how does that change in power dynamic, impact the current relationship between the two nations.

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