Although Hillary Clinton and Donald Trump have both stated they will not support the Trans-Pacific Partnership agreement, U.S. Trade Representative Michael Froman said the U.S. economy will be harmed if Congress rejects the free trade deal.
U.S. Trade Representative Michael Froman warned exporters attending the Commerce Department’s Bureau of Industry and Security Update conference in Washington Tuesday that the U.S. economy will be harmed if Congress rejects the Trans-Pacific Partnership (TPP) agreement.
In addition to the United States, TPP includes 11 other Pacific Rim countries and promises to either eliminate or phase out numerous tariff and non-tariff barriers once implemented.
“I cannot overemphasize what’s at stake. If Congress fails to act, the United States will be effectively frozen out of the Asia-Pacific region, economically and strategically,” Froman said.
TPP negotiations were completed in October 2015 and the final agreement was signed early February by the member countries’ trade ministers in New Zealand.
The U.S. International Trade Commission also released a report this year that forecasts U.S. exports related to TPP, if passed by Congress, will increase $57.2 billion by 2032.
TPP eliminates 18,000 taxes on American exports to some of the largest and fastest-growing markets in the world, Froman said.
“It is the first trade agreement to require state-owned companies abroad to play by the same rules as private firms. It is the first trade agreement to take on the issues of the digital economy – to make sure there is a free flow of data across borders, and companies are not required to build their servers in each market in order to serve that market. To make sure that the Internet remains open and free, which is so important, not just to Internet companies but to any manufacturing or service company that relies on the free flow of information across borders,” he added.
However, both Republican and Democratic presidential candidates have stated they will not support TPP. The Obama administration hopes to continue pressing Congress to approve the trade pact before the end of the year.
“While our allies there wait to see whether TPP will move forward, China is moving ahead aggressively with its own agreement, the Regional Comprehensive Economic Partnership, or RCEP, which covers 16 countries stretching from India to Japan,” Froman said. “Unlike TPP, it doesn’t have binding and enforceable labor and environmental regulations. It doesn’t provide for the free flow of data across borders. It doesn’t put disciplines on state-owned companies so they have to play on the same playing field fairly with private firms.”
Froman warns U.S. will be ‘frozen out’ of Asia-Pacific if TPP fails
