Why the Trans-Pacific Partnership debate needs a digital perspective

With the presidential primary season now concluded, the campaigns of the presumptive Democratic and Republican nominees, Hillary Clinton and Donald Trump, will be working vigorously to crystallize sharp policy differences for the general election. However, one major issue—the Trans-Pacific Partnership (TPP)—apparently will be off the table, since both candidates fundamentally agree that the Senate it should not enact it this year.

The TPP agreement has been signed by the U.S. and eleven Pacific Rim countries—New Zealand, Australia, Malaysia, Brunei, Singapore, Vietnam, Japan, Canada, Mexico, Peru, and Chile. President Obama has been granted fast-track authority to submit the TPP for an up-or-down vote (with no permissible amendments), and a 90-day clock for ratification will begin once it is formally submitted to the Senate. This is expected to take place in the fall, when the presidential campaign is in its closing stretch. Presumably, both candidates will continue to display an unusual sense of harmony regarding their opposition to TPP.

Secretary Clinton, who originally supported the deal, has turned around completely since announcing her candidacy. For example, in the first Democratic debate on CNN in October 2015, she unveiled her new opposition:

“You know, take the trade deal. I did say, when I was secretary of state, three years ago, that I hoped it would be the gold standard…[I]n looking at it, it didn’t meet my standards. My standards for more new, good jobs for Americans, for raising wages for Americans. And I want to make sure that I can look into the eyes of any middle-class American and say, ‘this will help raise your wages.’ And I concluded I could not.”

Donald Trump went on record against the TPP in a March 2016 USA Today op-ed. He wrote:

 “The number of jobs and amount of wealth and income the United States have given way in so short a time is staggering, likely unprecedented. And the situation is about to get drastically worse if the Trans-Pacific Partnership is not stopped.  …TPP is the biggest betrayal in a long line of betrayals where politicians have sold out U.S. workers. America’s politicians — beholden to global corporate interests who profit from offshoring — have enabled jobs theft in every imaginable way. They have tolerated foreign trade cheating while enacting trade deals that encourage companies to shift production overseas.”

The TPP is a complex agreement that deserves to be debated on its overall strengths and weaknesses. The International Trade Commission’s (ITC) recent report of its potential impact deserves greater attention and comment from both campaigns. Unlike most of the discussion to date, which has focused on the manufacturing sector, the ITC report focuses on the digital content sector, where the U.S. has an opportunity to extend its leadership much more widely. The report observed that strong protection of intellectual property rights and free flow of data across borders opens and grows digital markets. With millions of good-paying jobs and billions of dollars in new revenue flowing to the U.S. due to expanded intellectual property exports, this practical upside has largely been ignored.

The TPP also holds the promise of making China, which is not part of the agreement, an outlier in the region regarding copyright protection. In turn, this could lead to a more assertive U.S. stance to reduce copyright infringement through new bilateral trade measures. Absent TPP, there will be little leverage to wield against China in this area, which will result in U.S. job losses in the creative industries and an even greater imbalance in our current $365 billion trade deficit there.

Digital content jobs, unlike manufacturing, are not as likely to be shipped overseas, since our creative culture cannot be replicated in other countries. The U.S. has no domestic content quotas, unlike most of the world (including the European Union). These factors enable our nation to maintain a powerful competitive advantage in producing entertainment that can be sold abroad, often exceeding revenues that are possible in the U.S. market alone.

If the upcoming presidential campaign really is to be a referendum on the future, both Clinton and Trump need to begin discussing the TPP’s potential trade impact on our digital economy.