Given recent events in France, Kuwait, and Tunisia, the world is still a dangerous place. It’s also a more competitive place for trade and businesses, which is why speakers at the Hudson Institute’s discussion trade were focused on the Trans-Pacific Partnership, or TPP, and its importance to the U.S. economy.
The event, which came just a day after a much-scrutinized vote by the Senate to approve fast-track negotiation authority for President Obama, featured Thomas “Mack” McLarty, former chief of staff to President Bill Clinton; Armando González, the chief editor of the Costa Rican publication La Nacion; and Evan Ellis, a professor of Latin American Studies at the U.S. Army War College Strategic Studies Institute.
McLarty, a key player in the passage of the North American Free Trade Agreement in 1994, provided the keynote remarks focused on just how much the world has changed since that ground-breaking trade agreement. Noting how Facebook, Twitter and the broader Internet have transformed the world we live in and the way we do business, he said, “We should update the agreement and bring it forward into this century. … [The TPP] will be a catalyst to revitalize trade within the region.”
McLarty also noted that TTP would provide a strong counterbalance to China’s aggressive trade strategy, not only across the Pacific, but in the United States’s own hemisphere. China is the largest trading partner with many Latin American countries, and the Trans Pacific Partnership would help America to compete.
Mack McLarty (at podium) refers to TPP as NAFTA 2.0 and a necessary agreement to bring the United States trade apparatus into the 21st century. | Photo: Hudson Institute
As outlined, the partnership would include the U.S. and eleven other countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. These countries make up roughly 40% of the world’s economy. McLarty in the past has referred to the trade pact as NAFTA 2.0, and similar to that 20-year-old agreement, the framework for TTP was started by one of the Bush Administrations with a Democrat in the White House trying to bring it over the finish line.
González agreed with McLarty, offering the perspective of one from a Latin American country. He said the United States would be wise to sign a deal that would include such a large portion of the world’s GDP. “Central and South America are the fastest growing markets currently,” said González, adding that the deal would span the entire length of the Americas, from the Straight of Magellan up to Alaska.
Ellis chimed in to back up González, adding that not only was the pact good to balance China’s trade influence, but also to grow the economies of emerging markets in Latin America and elsewhere. He also placed spotlights on two of the areas where conservatives on Capitol Hill and among the grassroots and Democrats have focused their ire around broader trade issues: transparency and the future of the U.S. Export-Import Bank. “The Pacific Alliance focuses on eliminating impediments to free flow of goods, capital, people and information between member states,” he says.
Evan Ellis stressed that the TPP is a necessary step to counter China’s aggressive investment in Latin American countries | Photo: Hudson Institute
Ellis stated TPP should focus on encouraging greater transparency among the trade relationships to build stronger overall relations. He also called on rejuvenating the US Export-Import banks and international university work in order to further connect the partnership countries and better understand the differences in business. “We must instruct and inform countries in order to sign into the Trade agreements and then follow up with consistent freedom of market and success for economic growth,” he said.
González noted that, “One benefit of the TPP is making sure that every country has an interest in keeping the playing field even. Free trade will be able to have all countries hold each other accountable.”
Ultimately, though, McLarty said in drawing the panel to a close, TPP is about the United States and ensuring its position as the global trade leader around the globe. “Trading with other countries reflects reality… To be strong abroad we must be strong at home. But in order to stay strong at home, we must be engaged abroad.”
Sam McFadden is a contributor for Opportunity Lives. You can follow him on Twitter @sammcf_OL.