TPP? TTIP? Key trade deal terms explained


Ever get confused by what it all means?

The Obama administration is in the midst of negotiations for several historic trade deals. With so many acronyms floating around, it can be difficult to keep up. To help our readers understand the global negotiations, as well as controversies surrounding trade deals domestically, we’ve put together a summary of terms, ideas, and research on trade from Brookings experts.

Trans-Pacific Partnership (TPP)

Negotiations for the TPP (originally called the Trans-Pacific Strategic Economic Partnership Agreement, or TPSEP) began in 2005. There are currently 12 member countries participating in the negotiations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam.

Related: Measuring the success of Abe’s U.S. visit – Jennifer Mason

The goal of the TPP is to “promote jobs and growth in the United States and across the Asia-Pacific region.” The agreement’s passage and implementation is a major priority for the current administration’s trade agenda, and for the president’s last two years in office.

Related: The path forward in U.S.-Japan relations: Trade, diplomacy, and security – event audio

The total GDP of the 12 countries comprises 40 percent of global GDP and one-third of world trade (approximately $27.7 trillion). The global benefits of the trade agreement are estimated to reach such heights as $295 billion annually.  

Democrats typically oppose American free trade agreements because of a lack of labor and environmental protections, or failure to enforce them. Despite the administration’s promise that this is “the most progressive trade deal in history,” many Democrats have not yielded on their disapproval of the agreement.

Trade Promotion Authority (TPA)

The past several weeks have seen immense controversy in Congress surrounding the passage of Trade Promotion Authority (TPA), or fast-tracking, for the Trans-Pacific Partnership (TPP) deal.

While the Obama administration has pushed hard for Congress to grant TPA, the president has been met with significant resistance from several members of Congress, and from his own party, in particular.

Read more: Why do the president and Congress fight about trade? – Jeremy Shapiro

TPA has been around since 1974.This temporary authority grants presidents the power to negotiate international trade agreements and then send them to Congress for a simple up or down vote. The goal of this “fast-track negotiating authority” (as it was formerly called) is to expedite the legislative process to avoid delays, amendments, or filibusters from Congress, and to ultimately pass a trade bill presented by the president and wrap up the negotiations within a few months.

TPA was most recently granted by the Trade Act of 2002, but that authority expired in 2007. Because TPA negotiations are so intricate, the agreement would be extremely difficult to pass without TPA. Furthermore, leaders in other countries are less likely to participate openly in negotiations if they fear the U.S. Congress will try to introduce amendments to the final deal.

Because the TPA granted in 2002 expired in 2007, the Obama administration began to seek its reauthorization near the beginning of the president’s second term. Legislation to reauthorize TPA was introduced to Congress in April of 2015 as the Bipartisan Congressional Trade Priorities and Accountability Act of 2015.

Read more: Pass Trade Promotion Authority and enable conclusion of the Trans-Pacific Partnership negotiations – Joshua Meltzer

As a result of strong opinions about the TPP among Democrats, passing TPA has come against significant hardship for the president and his office. After a recent failed attempt at passage in the Senate, hope was renewed for the White House as Senate Democrats struck a deal and agreed to consideration of a fast-track authorization.

UPDATE (5/24): On Friday, May 22, by a vote of 62-37, the Senate approved the renewal of TPA. The bill now awaits a vote in the House.

UPDATE (6/30): On Wednesday, June 24, Congress passed Trade Promotion Authority. Following this victory for the Obama administration, focus will shift to passing TPP—potentially becoming a key component of the upcoming presidential election.

Read more: Undoing American leadership: The killer currency amendment to the trade bill – Mireya Solís 

Transatlantic Trade and Investment Partnership (TTIP)

The Transatlantic Trade and Investment Partnership (TTIP) is a free trade and investment agreement being negotiated between the U.S. and the European Union (EU), with a goal of unlocking “opportunity for American families, workers, businesses, farmers and ranchers through increased access to European markets…” Its objectives also include strengthening the relationship between the U.S. and EU economies,  increasing jobs, and overall economic growth in both regions. Critics claim that the agreement will assist in increasing corporate power.

The TTIP is a companion agreement to the TPP, and authorization of TPA in Congress will assist in the passing of TTIP. Negotiators have been discussing the agreement since President Obama called for the agreement in his 2013 State of the Union address. The TTIP is currently in its ninth round of negotiations.

UPDATE (6/30): After Congress granted the president fast-track authority on June 24, U.S. Trade Representative Michael Froman made clear that passage of TTIP, along with TPP, will be a major priority.

Read more: The Geopolitical Impact of TTIP: A Transatlantic Fortress or an Open Platform? – Miriam Sapiro

Listen: TTIP in Light of Turkish Trade Policy and Economic Relations with the United States – event audio

Related: Should Turkey be included in the TTIP? – Kemal Kirişci

Regional Comprehensive Economic Partnership (RCEP)

Another trade deal on the table is the Regional Comprehensive Economic Partnership (RCEP). This free trade agreement is currently being negotiated among the Association of Southeast Asian Nations (ASEAN) countries, which include Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, as well as China, Japan, Korea, Australia, New Zealand, and India (all of which currently hold free trade agreements with ASEAN).

Participants of the RCEP can expect significant economic gains. It is estimated that it will generate over $300 billion annually for the 16 countries upon implementation.

Free Trade Area of the Asia-Pacific (FTAAP)

Discussion of a Free Trade Area of the Asia-Pacific (FTAAP) was brought up at last year’s APEC summit in Beijing. A strategy to bring the FTAAP into fruition was committed to by participating parties at the summit.

However, it was made clear that the agreement would build on the TPP and the RCEP, and the Obama administration has made clear that its first priority is the TPP.

Brookings expert Joshua Meltzer says, “To understand the lack of U.S. enthusiasm for an FTAAP and its pursuit instead of the TPP, one needs to take into account the role of the TPP in responding to competition between the U.S. and China over access to and influence in third markets, and more deeply, over potentially different visions for global governance arrangements.”

APEC countries who are not TPP members are particularly invested in an FTAAP, as not only could they benefit from a successful conclusion to an FTAAP agreement, but the TPP’s non-participating countries in Asia, particularly China, will actually be negatively affected by successful implementation of the TPP.

Learn more: From the Trans-Pacific Partnership to a free trade agreement of the Asia-Pacific? – Joshua Meltzer

African Growth and Opportunity Act (AGOA)

The African Growth and Opportunity Act (AGOA) was authorized by Congress and signed into law by President Bill Clinton in 2000. The goal of the act is to support the economies of sub-Saharan Africa (SSA) by offering “tangible incentives for African countries to continue their efforts to open their economies and build free markets.” AGOA provides trade preferences to eligible SSA countries through duty- and quota-free provisions, thus allowing certain African countries access to American markets of certain goods, as well as contributing to job growth in the region.

Learn more: AGOA Utilization 101 – Mwangi S. Kimenyi

AGOA’s current authorization is set to expire September 30 of this year. As it stands, the U.S. Senate approved the “Trade Preferences Extension Act of 2015,” which includes reauthorization of the African Growth and Opportunity Act (AGOA) on Thursday of last week (May 14). The Senate approved the act by an overwhelming majority (97-1). If reauthorization is voted through by the House and signed by President Obama, AGOA will be extended for another 10 years—the longest extension the bill has ever received.

UPDATE (6/30): A day after the passage of TPA, Congress also renewed AGOA.

Learn more: AGOA: Now to the Democrats – Witney Schneidman and Walker Williams

Read more: AGOA moves forward: Reviewing last week’s reauthorization in the U.S. Senate – Witney Schneidman and Andrew Westbury 

This post was last updated on June 30, 2015.