Issue 77 | Sept. 23, 2016
The Case for the TPP: The Opportunity for America
 
While unemployment rates have fallen significantly from 2008 to 2009 levels, workforce participation is at its lowest rate in decades. The Trans-Pacific Partnership (TPP) has the potential to reinvigorate a somewhat stagnant U.S. job market, which is dependent on trade. Currently, 41 million American jobs rely on trade, while nearly half of all manufacturing employment is supported by U.S. export markets. Average U.S. citizens would also benefit greatly from increased fair trade since 98 percent of U.S. exporting companies are small- to medium-sized businesses, and annual purchasing power for U.S. households is boosted by $10,000 each year from imports. The U.S. is currently facing a major disadvantage in trade. While the average tariff on U.S. exports is 5.9 percent, ranked 130th out of 138 countries, the U.S. tariffs on imports are four times lower. The TPP agreement would lower tariffs for U.S. exports, allowing countries to trade on a fair playing field, benefiting U.S. businesses and consumers alike. Read more.
 
Blow for Obama's TPP as Vietnam Parliament Defers Ratification
 
Long thought to be one of the first countries that would ratify, the Vietnamese National Assembly will not approve the TPP agreement this upcoming parliamentary session on Oct. 20. Despite already having endorsement from top leaders in the ruling Communist Party of Vietnam, as well as no real domestic opposition, Vietnam will delay the ratification process to sometime after the United States' presidential election. Both major candidates in the U.S. election have stated their opposition to the TPP agreement. Nguyễn Thị Kim Ngân, the parliamentary chairwoman for the National Assembly, has stated that the ratification process will depend on the communist party, the global situation and the outcome of the U.S. election. Read more.
 
TPP can't be renegotiated, Vietnamese official says 
 
Despite demands from many U.S. officials, the TPP cannot be renegotiated, says Vietnamese official Vuong Duc Anh.  Some U.S. Congressional members may be holding out on voting for the TPP for special interest groups such as the tobacco and medical drug industries lobbying for longer data exclusivity periods and the right to sue foreign governments.  Ahn believes that it's unfeasible to change the TPP which underwent "tough negotiations" and was signed this past February.  According to Ahn, the TPP can be mutually beneficial for the U.S. and Vietnam.  TPP stands to increase Vietnamese cotton exports by 28 percent by 2030 according to The World Bank and could benefit the U.S. with cheaper cotton, as well as less reliance on China for its cotton needs. Read more.
 
Australia Pushes for the Passing of the Trans-Pacific Partnership
 
Prime Minister Malcolm Turnbull of Australia plans to promote the passage of the TPP agreement to the United States Congress in the coming weeks. Advocating the moral case that trade helps eliminate poverty, provides regional stability and can help with the current refugee crisis, Turnbull believes that the deal is in the best interest of the Pacific Rim countries. Turnbull has also been pushing the "soft power" opportunity for the U.S. that the TPP provides, as opposed to traditional military "hard power," as tensions increase around the Pacific Rim. Read more.
 
Wheat Growers Welcome Trade Action on Chinese Support Program
 
The Obama administration brought trade action against China this past week at the World Trade Organization. The action, supported by U.S. wheat growers, is a result of China's market price distortion for wheat, corn and rice, which has cost U.S. farmers an estimated $650 million to $750 million. According to the Office of the U.S. Trade Representative, the Chinese have spent nearly $100 billion in trade-distorting market price support programs. Read more
 
What's Next for Apple's €13 Billion Tax Battle?
 
After last month's controversial European Commission decision that ordered Apple to pay €13 billion in back taxes, European Competition Commissioner Margrethe Vestager has launched a "charm offensive" to defend the decision in the U.S. Meeting with prominent figures such as Treasury Secretary Jack Lew and Senate Finance Chair Orrin Hatch. After his meeting with Vestager, Senator Hatch called the decision a "roughshod" of an American firm, noting that "the commissioner failed to build an effective case for this highly politicized ruling." Senator Hatch also called for additional action to be taken in international courts. Members of the tech industry have had similar sentiments. Read more.
 
Rethinking Global Value Chains
Nov. 16, 2016
 
Join the Global Initiatives Council for the last session of the year as we examine the economic impact of global value chains. RSVP Here.
Compiled by Global Intern Krishna Babla.

For more information, contact Jasmin Sakai-Gonzalez, 213.580.7569.