Current Events that make sense #26

What is the TPPA?


The TPPA deal has been a recurring media topic over the last few years; however, its complicated nature and clandestine negotiations have left many of us lacking any understanding of what it all really means.


Last week, the deal made major progress, so I thought now would be a good time to break it down and explain what it is - and, why some have an issue with it.





TPPA stands for Trans Pacific Partnership Agreement. It is an agreement between the United States and 11 other nations that are (sort-of) on the Pacific Rim (Vietnam, Japan, Singapore, Brunei, Malaysia, Australia, New Zealand, Chile, Peru, Mexico and Canada).


Essentially this agreement will open up free trade between these countries by reducing tariffs and trade barriers.




While it is labelled and packaged as a trade deal, it is the extra power given to corporations and traders through this deal which worry many. While only a small amount of information about the agreement has been leaked, critics’ main concern (for NZ specifically) is that it will diminish the power of the New Zealand government; influencing issues such as labour standards, copyright, and the environment.


An example; imagine if the New Zealand government decided to implement plain packaging for all cigarette boxes. If an overseas tobacco company doesn’t like this, through the TPPA, they can sue the New Zealand government for millions arguing that this decision damages their business investment and prohibits trade. Or, if the New Zealand government implements laws that state more environmentally-friendly practices have to be used in farming, companies that invest in these farms can sue the New Zealand government if they think this decision will be negatively affect their investments.


So, the gist; if the government is concerned about the threat of being sued, this may influence their law-making.


This is just the main concern however, there are many more which you can read about here (from a New Zealand perspective) or here (from a US perspective).



[Leaders of TPPA member states in 2010]


While Obama has pushed for the TPPA (this could possibly be the biggest thing he does while in power), his fellow Democrats have been light in support as many believe American workers will lose their jobs due to lower wages overseas. However, Republicans have been supportive of the deal as they think it will boost the economy.


Without getting into the details of US government and who’s voted for what, essentially, what happened over the last month is that the Democrats initially voted the deal down and said no. Obama and the Republicans then worked together to unpackage the deal into separate parts. When voting on these separate parts, the US Senate voted 60-38 to give Obama what is called ‘Trade Promotion Authority’. This is significant, as it is the biggest hurdle and effectively gives the deal a signal to go-ahead. ‘Trade Promotion Authority’ will allow Obama to go out and negotiate with other countries without having to consult Congress. Congress will still be able to vote to approve or reject agreements, but will not be able to amend the deal. This will all become law once Obama signs the Bill, which should be soon.


Trade Minister Tim Groser says that if everything goes to plan, the TPPA will be in place by 2017 – but it could be decades before its full benefits are felt.


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