Obama and Congress along with key countries in Pacific trade are attempting to create new regulations that will facilitate fair and equitable international business commerce. While much of Obama’s two term Presidency has been marked by intense partisan debate and politics, key components of his international trade plan are Republican led (PBS.org).
Recent legislation received significant bipartisan support, House 286 to 138 to renew programs for workers displaced by international trade and the African growth and opportunity act (PBS.org).
The key agreement, the Trans Pacific Partnership has support from Speaker of the House, Paul Ryan. This is evidence there is still middle ground and Obama has caused reaction from the extremists rather than polarized, and it has been through policy rather than sensationalism (PBS.org). In key economic areas the moderate political base of these two leaders can come to an agreement even though evolving social issues continue to create tension.
Many worry that the lower labor costs in third world countries, “Vietnam currently has a 75 cents per hour labor rate,” will leave the U.S. labors unemployed because the corporations can hire at a low labor cost (MSNBC). Factors of shipping, establishing overseas offices, distribution, domestic, and international taxation and fees, international communication, and travel, and reputation are factors that increase aggregate costs and are not directly factored into the labor rate. Additionally, business causes the labor rate to increase, as is occurring in China and jobs return to the United States.
The key policies of the TPP include; eliminating 18,000 taxes in the form of tariffs that countries have put on made-in-America products (TPP). This makes American ranchers, farmers, small businesses, and manufacturers competitive in the global market and reduces industry entry barriers. This is a priority issue in trade because 95% of the world’s consumers live outside of the United States and tariffs increase some prices by 59%, 19% is the average tariff in Japan, 300% on some agricultural products (TPP).
In addition, TPP increases worker protection, supports e-commerce and open internet, establishes international wage requirements, workplace safety, and environmental standards. It establishes investor state-dispute settlement (ISDS) ensuring contract and regulation enforcement in foreign countries (TPP).
Currently, the U.S. exports are overpriced by tariffs, wages are substandard, environmental standards are low or non-existent. The TPP upgrades the North American Free Trade Agreement’s (NAFTA) environmental, labor, digital communications, dispute settlement and enforcement standards (TPP).
TPP countries join the United Nations Convention Against Corruption (UNCAC), criminalize bribery, and create and enforceable code of conduct for public officials. This creates equal disclosures, regulations, and enforce-ability for State-Owned- Enterprises (SOEs) as private companies (TPP).
To protect and facilitate e-commerce and international commerce the TPP promotes uniform encryption security, customs regulations, and cloud storage accessibility for digital communications (TPP).
American exports support 11.7 million jobs in the United States and rose 50 percent from 2009 to 2014, nearly a third of the period’s total economic growth (TPP). The agreement involves the United States, Japan, China, and nine other Pacific Rim nations.
The TPP creates uniform international regulations; provides new opportunities for professional service providers, architects, engineers, and web designers; and establishes international scientific food safety standards (TPP). In addition; supports innovation, development, and collaboration in medicine, science, and technology.
TPP has opposition from many House democrats and AFL-CIO Unions; in addition, many oppose President Obama’s “Fast Track” attempts (PBS.org). Opponents say it will create an incentive for businesses to move employment and operations overseas (MSNBC).
Obama maintains that global trade is necessary, especially in a global high tech economy. An economic tenant is that fair trade is good for both parties reducing costs for the developed country and improving standards for the developing country.(PBS.org) International trade is already a major part of the U.S. and global economy, regulators and legislators are attempting to agree upon appropriate regulations that can save all parties time, money, and create new possibilities for commerce and innovation.
Human rights advocates want to ensure any country the United States has explicit trade agreements with adhere to United Nations and United States Human Rights standards. Recommendations that trade agreements include sections that ensure equal and protected human rights in labor, sexual orientation, gender identity, religion, gender, and race are crucial.