The recently signed Comprehensive and Progressive Agreement for the TransPacific Partnership (CPTPP), the latest version of the Trans-Pacific Partnership (TPP), presents the United States with a tremendous opportunity.
Using the CPTPP, the United States can join like-minded partners in establishing rules which limit unfair trade practices by international competitors, including China.
The CPTPP could also level the playing field for American workers and businesses, providing unprecedented access to Asian markets by lowering thousands of tariffs levied on US exports to CPTPP member markets, constituting 45 per cent of US merchandise exports.
The removal of these tariffs will provide massive growth opportunities to the US economy. The original TPP was projected to grow the US services sector by US$42.3 billion and US agriculture output by US$10 billion following adoption.
Joining the CPTPP will both complement the robust turn in US trade policy towards China and potentially offset the consequences of retaliatory tariffs imposed by China against the United States. US membership and leadership of the CPTPP operationalizes the broader strategic agenda laid out in US doctrinal statements such as the National Security Strategy and National Defense Strategy.
The CPTPP drops some provisions from the TPP that were included at the insistence of the United States, leading to two challenges:
- Economic modeling of the TPP benefits to the United States are out of date.
- With negotiations having concluded among the remaining 11 countries that make up the CPTPP, creativity and flexibility will be required to find a set of amendments that can be considered ‘wins’ by both the CPTPP signatories and the United States.
Ultimately, the United States participating in a living and breathing trade agreement like CPTPP would cement America’s status as a leader and rule-maker in the global economy.