Will the United States ratify or reject?
By Taylor Sholler
Last week, twelve nations across the Pacific-Rim came together to sign the Trans-Pacific Partnership (TPP) in Auckland New Zealand. These economies, making-up roughly 40 percent of the world’s GDP, include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam. One of the largest trade agreements in history, the TPP will benefit businesses big and small and give signatories a competitive edge both in the Asia-Pacific and around the world. Domestic consultations are now under way in the respective legislatures as countries have two years to ratify or reject the agreement as appropriate under domestic law.
SEMI has been a vocal supporter of the trade deal since negotiations began nearly seven years ago. By reducing trade and investment barriers and establishing new, market-oriented rules to address rapidly developing changes in international commerce, the TPP will open markets and modernize the world trading system. Particularly in the U.S., economic output and job creation under TPP stands to increase dramatically. To that end, SEMI celebrated the February 4th signing ceremony, which reaffirms each country’s commitment to open markets. If passed, equipment and materials companies can expect more transparent rules to redefine economic cooperation in the Asia-Pacific in the coming years.
From a domestic perspective, the agreement will significantly strengthen American leadership in the region. As a central tenet to the Obama Administration’s pivot toward Asia, TPP will provide the leverage necessary for wholesale economic change on a host of issues. According to the Peterson Institute for International Economics, the U.S. would see its exports increase by $131 billion and its incomes increase by $357 billion by 2030 under the accord. All other TPP members would see similar though less robust economic benefits.
That said, the road to Congressional ratification is anything but guaranteed. In mid-May, the White House is expected to submit legislation implementing TPP to Congress, which would start the clock for House and Senate votes. At that time, both supporters and opponents of the agreement will mobilize efforts to sway public opinion and influence policymakers. The presidential elections will also serve to complicate passage of the trade pact. None of the current frontrunners in either party have voiced support for TPP and trade is an area that is easily politicized.
For this reason, industry will need to ardently advocate on the merits of the agreement throughout the year and perhaps beyond. SEMI looks forward to continuing to work to educate U.S. legislators about the benefits of TPP in the lead up to Congressional consideration. If you are interested in learning more about TPP or SEMI’s advocacy activities in Washington, D.C., please contact Taylor Sholler, manager of public policy, at [email protected].
—Taylor Sholler is manager of SEMI’s North America Public Policy Team.