Trans Pacific Partnership Case Study

494 Words2 Pages
The Trans Pacific Partnership is an agreement that will link twelve countries including the United States and Japan. The deal has been structured with the intention of solving a growing problem: the problem of governments consistently establishing trade barriers in an effort to preserve domestic industries and politically connected companies by giving them competitive advantages that allow them to outperform foreign competition. Now although, there is nothing wrong with protecting domestic industries, extreme approaches of protectionism can have adverse impacts on consumers in terms of the prices they pay for everyday items. The TTP aims at getting rid of obstacles such as tariffs, quotas and other trade regulations. With this being said, despite…show more content…
Lower prices allow us to do more with our incomes and consequently raise our standards of living. A high standard of living represents a strong economy and with this deal we will be moving in that direction. On the other hand linearization of trade may have adverse affects on the auto industry for example. Under the new agreement, at least 45% of a vehicles content must come from TPP countries. Under the NAFTA, agreement at least 62.5% of vehicles content had to be local. This disparity in domestic content can mean a large loss of jobs considering the auto industry accounts for a large number of Canadian jobs. At the same time, members of the TPP will now hold a distinct competitive advantage to non members because countries outside the agreement are still restricted by strict trade regulations. In addition to this Canadian industries such as beef, agriculture and dairy will also benefit greatly from the agreement because this will allow them to tap into new exports that were previously deemed irrational due to trade
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