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Essay / The pros and cons of the Trans-Pacific Partnership
In recent decades, free trade has been seen by neoliberalists as an excellent means of ensuring economic growth and development. For several years, the United States and 11 other countries have been negotiating the Trans-Pacific Partnership (TPP), an economic trade agreement that would promote economic progress and cooperation. Supporters of the trade deal argue that the TPP would promote economic growth, assert U.S. influence over Chinese influence, and help improve participating countries' environmental and labor laws. However, critics of the deal say the deal will lead to job losses and trade deficits in the United States, pharmaceutical monopolies on drugs and their prices, and a lack of currency protection. The first provision of the TPP that would help foster economic growth is the vast reduction of trade barriers among participating countries. Currently, many countries impose significant tariffs on goods when trading with the United States. For example, Malaysia imposes “40% tariffs on American poultry” (Krist, 2015), while other tariffs on American products can reach “59% on American machinery, up to 70 % on automotive products” (Davidson, 2015). ). But with the TPP, the 12 countries would eliminate virtually all of these trade barriers between them, with a few minor exceptions. In fact, according to U.S. Trade Representative Michael Froman (2015), these tariffs "will be either zero or much lower than they are now, creating more opportunities for U.S. companies to compete and compete." 'export products abroad'. This would constitute a complete improvement compared to the provisions of the World Trade Organization (WTO), which on the other hand “maintain tariffs which on certain products can be particularly high” (Krist, 2015). With this trade deal, America can expect to ship more of its goods overseas due to the dramatic drop in tariffs, which would help the economy grow. Additionally, U.S. manufacturers would no longer be at a disadvantage to foreign manufacturers because without this agreement, U.S. manufacturers. Even though some industries in the United States were optimistic about the TPP, many industries in the United States are still fatigued due to the current practice of currency manipulation. . Currency manipulation occurs when “countries play currency games to make their products more affordable and American products more expensive” (Krist, 2015). The effects of this situation are mainly manifested in trade between the United States, Japan and China. For years, China kept the value of its yuan artificially low, to the point of “limiting the growth of US exports to China, and the US trade deficit widened” (Ip, 2015). Currency manipulation remains a concern for the U.S. auto industry, which fears that Japan's current currency manipulation will help "reduce the cost of Japanese automobile imports" (Davidson, 2015). In fact, currency manipulation has had such a dramatic effect on the U.S. economy that it "is causing the loss of one to five million U.S. jobs and increasing our trade deficit by $200 billion to $500 billion per year." an” (Bergsten, 2015). Clearly, currency manipulation is a powerful economic weapon that some say must be disarmed before the TPP can.