How Will the Trans-Pacific Partnership (TPP) Trade Agreement Affect Canadian and U.S. Manufacturing

Best Internet Concept of global business from concepts series

by Ajay Arora

 

Many people across the world are incredibly concerned with Kelly Clarkson’s new baby, and before that it was Miley Cyrus’ twerking – and before that it was the royal family. If you have no idea what I’m talking about, don’t spend the time on Google trying to find out. However, there is an event that has the potential to change the way we operate in many industries, including manufacturing. I’m speaking of the TPP, and that, my friend, is worth researching on Google.

First Time I’ve Heard of It

 

The TPP Trade Agreement is set up to have a ripple effect in dozens of different industries. This treaty has been in the works for the past three years, and the reason you haven’t heard about it is because it’s been largely kept a secret. Among the dozens of affected industries across the world, such as the internet and the healthcare system – just to name a few, American and Canadian manufacturing surely will not escape unaffected.

 

TPP Trade Agreement: “NAFTA on Steroids”

 

That’s what some are calling the TPP trade agreement. This agreement includes 11 countries, the United States and Canada among them, and releases these countries from some of the costly trade barriers that prevent low cost labor and parts. Before you really look at it with a critical eye, it might seem like a great idea. The United States and Canada will be open to receiving free trade from other countries.

 

In 2001, we saw the beginning of a tidal wave of American and Canadian companies that crossed the ocean with their manufacturing base, bringing with them the U.S and Canadian manufacturing jobs. So, if you thought that was a sharp blade in the side of ‘Made-In-America,’ the TPP will add 11 other countries to the new ‘free trade’ umbrella.

 

Buying American

 

Rep. Donna Edwards (D-Md.) along with 68 other Congressional Representatives to President Obama drafted a concerned letter which states, “Of special concern is the prospect that firms established in TPP countries, such as the many Chinese firms in Vietnam, could obtain waivers from Buy American policies. This could result in larger sums of U.S. tax dollars being invested to strengthen other countries’ manufacturing sectors, rather than our own.” Those are some foreboding words.

 

Congress passed the Buy American Act in 1993. This act required that American producers and manufacturers be given special consideration and preferential treatment when it came to federal contracts. In short, America had to buy a certain amount of American-made products when it was given the choice between domestic and foreign. The TPP agreement gives companies the ability to sidestep this act should they find it necessary.

 

Opponents of the agreement believe that this would be a boon on the American and Canadian economy, bringing us back into the golden age. The same sentiments were heard shortly before manufacturing flowed out of the country and most thought we would experience the benefit of reciprocal trade. Efforts are being made to Fast Track this agreement, so it will take effect by the end of 2013. The full effects may not be known until the agreement is passed.

 

What do you think the result of the agreement will be? Are we about to reverse the manufacturing exile that’s been going on for more than a decade, or is this another unnecessary surgery that threatens to remove more perfectly healthy American and Canadian limbs?

Progressive Automations is a worldwide supplier of linear actuators and automation products. Visit our website here to learn more about our products and how we can help.

 

References:

 

The TPP Is Another Job Killing Trade Deal – So Why Are Both Parties Supporting It? By Natalie Pompilio, Yes! (28 August 2013): http://www.yesmagazine.org/issues/the-human-cost-of-stuff/tpp-is-another-job-killing-trade-deal-so-why-are-both-parties-supporting-it

 

Why the Trans-Pacific Partnership Would Hurt American Manufacturers by Michele Nash-Hoff, The Huffington Post (2 May 2013): http://www.huffingtonpost.com/michele-nashhoff/why-the-trans-pacific-par_b_3186557.html

 

U.S. Textile Manufacturing and the Trans-Pacific Partnership Negotiations by Michaela D. Platzer (5 October 2012): http://www.fas.org/sgp/crs/row/R42772.pdf

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