TPP: A Conversation with U.S. Trade Representative Michael Froman

The following summary of the event is written by Natalie Smith, a student in FASH455 Fall 2016.

  • Michael Forman continually talked about the benefits of passing the TPP during the end of Obama’s term and during the lame duck period. If the TPP is not passed during this time, the bill could sit in congress for years since the two presidential candidates are against free trade.
  • Michael Forman also mentions some outstanding issues that have surrounded the TPP. One main problem is the dairy industry, which is export and import sensitive and the need for a balance to set their needs. Additionally, the pork industry has problems with implementation, especially with Japan. There are also concerns with the financial services and data flows.
  • However, Michael Forman stated the urgency of implementing the TPP as quick as possible. If it is not implemented rapidly China has the ability to set the rules of trade. China, similar to the U.S. wants to move into the Asian Pacific market, however the TPP has different objectives then other Chinese trade agreements. The TPP has a focus on labor and environmental standards and IP standards. Although, it seems the goal is to eventually get China to join the TPP. Forman mentioned if China does not end up joining the TPP, we want them to be forced to live in a TPP world, which includes high standards.
  • Michael Forman further discusses the Trans-Atlantic Trade and Investment Partnership (T-TIP), which they hope to soon reach an agreement on with the European Union. They recently finished their thirteenth round of negotiations, the main outstanding problems with the TTIP are the uneven growth, Greek crisis, and euro skepticism. Nevertheless, the TTIP is a positive agenda item to help promote job growth in Europe.

A few things that stuck out to me from this dialogue included Forman’s belief of California being the state to benefit the most from the TPP. Currently, California exports $170 billions of goods and are strong in manufacturing, agricultural, entertainment, IP industries, etc. I also found it interesting that he continually reiterated that we have not lost jobs in the U.S. solely because of globalization but mainly because of automation.

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Author: Sheng Lu

Professor @ University of Delaware

8 thoughts on “TPP: A Conversation with U.S. Trade Representative Michael Froman”

  1. Being as China is the world’s largest exporter. It is going to be difficult to see any impact of the TPP on the country’s economy or trade right away. As many Asia-Pacific regions begin to form relations with each other, they’ll trade amongst themselves as a form of protection or guaranteed benefit. It would be quite difficult for any individual country to compete with China but perhaps the Asia-Pacific region as a whole could pose as a threat. China has no plans to join the TPP and their population size and vast resources and factories make them competitive enough on their own. Any yarn-forward country is going to want the protection the TPP has to offer and will not execute anything past sourcing the fibers outside of the trade regions. Perhaps more fabric-forward countries will still be open to the cheap labor and production China has to offer. Perhaps more fabric-forward countries plus China’s expansive population and capabilities will hold it in place as the world’s top exporter.

    1. Some personal thoughts and welcome for any follow-up comment: Yes, China is the world’s largest exporter. But, the US is one of the largest importer! As we mentioned yesterday in class, market is power. You are also right that China cares about TPP (http://www.nytimes.com/2016/09/05/opinion/the-tpp-deals-effect-on-us-and-china.html?_r=0). Both China and the US want to form their own supply chain in the Asia-pacific region and write the “rule” for the future. Please keep in mind that TPP will have an impact on the textile and apparel industry, but textile and apparel industry is NOT the reason why TPP is proposed. The video gives us a great bigger picture vision about the agreement

      1. Since the U.S. is one of the largest importers in the world and China is the world’s largest exporter, it would be in the best interest of the two countries to establish good relationships and work together in terms of trade. China can benefit off of purchases and trade made by the U.S. and the U.S. can benefit from resources and exports from China that it can’t produce as well domestically. This New York Times article shows how many trade allies of the U.S. are hoping that the TPP could counter a growing Chinese political and economic influence. However, according to Clyde Prestowitz, the TPP won’t necessarily make trade more free and it won’t pose as any setback to China. I believe that this is because China is simply too large a nation with a huge population, vast resources, many factories, and many resources.

  2. Michael stated that if we do not act on the TPP soon, China may be able to set the rules of origin. How is this so? Also, it says that China will later be implemented into the TPP. Since the TPP already makes up a large share of the world’s GDP, will this be bad for our global economy? As we learned in class, there are always ‘winners’ and ‘losers’; how would this attract any other markets to import/export apparel or textiles?

  3. I believe implementing labor standards into the TPP is a very important component. This deal can not only give the U.S. more tariff free trade partners, but they can be partners that treat their employees correctly. Many countries provide unsafe working conditions, and companies have a hard time holding them accountable and tracing their whole supply chain. TPP regions will have to adhere to environmental and labor standards, which I believe is a big push this industry needs after tragedies such as Rana Plaza.

  4. It is interesting to see how many industries TPP effects. Since we have talked about it in relation to the textile and apparel industry I never thought to think that it could have effects on other industries like pharmaceuticals and the dairy industry. These industries are all so different but can still be effected by what is taxed coming in and out of this county and it is very interesting to see how they are all interconnected!

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