The Trans-Pacific Partnership: The view from the Obama Administration

In a background briefing for journalists and journalistic fellow-travelers, a senior administration official offered a strong defense of the Trans-Pacific Partnership, which Congress must approve. The official expressed satisfaction about the number of economically significant groups that have announced their support for the TPP, and optimism that Congress would approve it despite the opposition of leading presidential candidates from both parties and skepticism on the part of key senators including Finance Committee Chair Orrin Hatch and Majority McConnell.  The stance of key Republicans is critical because, as the official put it, trade treaties in recent decades get passed with strong Republican support plus a critical mass of Democrats.

Stressing the geopolitical significance of the TPP, the official said that it represented “the most concrete manifestation of our rebalancing toward Asia” and added that “Our allies very much want to see us do this. . . . They are looking for our leadership.”

In response to a query about the impact of TPP on China, the official stated that “If we get TPP done, China is going to have to live in a TPP world. China’s neighbors will have signed up for standards that will make them attractive places to do business.”

Responding to criticisms from organized labor, the official said that the TPP is “good for workers.” An example of its benefits included provisions in the labor chapter of the agreement committing Vietnam to allow the development of independent unions. The official also cited a recent analysis from the Peterson Institution for International Economics showing that on a percentage basis, workers’ gains from the TPP would increase more than returns to capital.

Turning to broader issues, the official underscored the impact of globalization and technological change on the U.S. economy and workforce but insisted on this distinction between trade agreements and these broad trends: “Globalization is a force; trade agreements are how we shape that force.” The implication: “If the agreement doesn’t move forward, we’ll still be facing low-wage competition. We just won’t have the tools to deal with it.”

Citing the proliferation of bilateral trade agreements involving TPP countries as evidence of the rapidly evolving international economic environment, the official insisted that “The choice isn’t between TPP and the status quo. It’s between TPP and the direction the world is heading.” TPP represents our best opportunity to shape these trends to our advantage, the official suggested. If we fail to seize it, we’ll be worse off in the long run.