Ratifying the Trans-Pacific Partnership is key for the US
7 years of negotiations regarding the Trans-Pacific Partnership are behind us, the final say on its implementation is with the US Congress. The deal looks to integrate and lift trade restrictions between 12 countries all of which have a coast in the Pacific Ocean. Among those 12 countries, Mexico, Peru and Chile are the only Latin Americans participating. What is so impressive about the TPP is that together, these 12 countries comprise nearly 40 of the world’s GDP, so by all standards it is a game-changer for the global economic markets.
What the US Congress needs to understand however, is that not ratifying the agreement would be very unfavorable for them as they try to build up influence in LatAm. The TPP comes at a point where the continent needs reassurance on whether they should look towards the US for trade, or if they should look elsewhere, perhaps towards China.
Initially, the United States should look at this agreement as an opportunity to make advances towards some of their own economic goals. Liberalizing trade and restructuring the market’s legislative structure is at the top of their international agenda, as the government argued in its 2015 National Security Strategy that the current system “is now competing against alternative, less open models…”
The TPP not only reinforces the free trade idea, but does so in a way that caters to one of the United States’ most basic interests: the protection of intellectual property and patents.
However, besides their own performance, the US should look on how not ratifying the agreements will seriously set back foreign policy objectives in LatAm.
The TPP is a demonstration of the United States’ will to trade, their openness to interact with LatAm economies and their interest in a common American agenda. If Congress fails to ratify the agreement, LatAm governments will take it as a sign of lost faith in their continental neighbors. Not only that, but it will also discourage further attempts by LatAm nations to negotiate with the US, as not ratifying would be perceived as a sign of a divided government and a foreign policy that is incoherent to domestic political standings.
Additionally, the TPP offers a great opportunity for the United States to realign its objectives with those of Mexico. Mexico is a heavily export driven economy, it pushed very hard to be included in the negotiations, and is now satisfied with the results. As the Mexican government sees it, the TPP is a great opportunity to build upon NAFTA without getting stuck in the political discourse that agreement entailed. NAFTA received the US Congress blessing because they firmly believed that a prosperous Mexico would benefit the whole North American trade circuit, the TPP, which Mexico has big hopes for, would fall into that line as well.
The United States, if wise regarding its foreign policy, and if it still hopes to remain a regional commercial powerhouse, should not pass up the opportunity to implement the TPP. If it fails to pass, non- signatory countries in the region will be tempted to look elsewhere for trade, both due to the disinterest such a decision would appear to express and due to the particular economic losses it would signify, particularly in the case of Mexico. The final say will have to wait for the United States’ next presidential administration.