Globalization has lifted more than one billion people out of extreme poverty, but as inequality and barriers to trade remain worldwide, improved trade standards are needed and the Trans-Pacific Partnership promises to be a primary conduit of those standards, America’s top trade official told a Stanford audience on Tuesday.
Ambassador Michael Froman, the U.S. Trade Representative, spoke of the merits of the multilateral trade agreement, known as the ‘TPP,’ in a speech given at the Freeman Spogli Institute for International Studies (FSI).
The TPP seeks to liberalize trade and investment between 12 Pacific Rim countries. Signed earlier this month, the document now faces the path to ratification through its members.
“In today’s rapidly globalizing world, the alternative to the TPP is not the status quo,” Froman told nearly one hundred affiliates and guests at the Bechtel Conference Center.
Froman cited efforts by various countries to build up alternative frameworks that promote free trade, but said they miss some components of stability and longevity that the TPP offers. For example, China’s 'one belt, one road' initiative and the Regional Comprehensive Economic Partnership, a negotiation between 16 Asian countries.
The TPP would serve as an important benchmark for countries seeking to expand economic gains from trade and to level up on common “rules of the road.” He said increase in exports to the United States alone is estimated at $350 billion a year.
“Smart trade agreements like the TPP are how we shape globalization the right way,” Froman said with a call for continued U.S. leadership on the matter.
President Obama has been a strong advocate of the agreement, in line with the administration’s ‘rebalance to Asia’ strategy. The rebalance is a regional strategy that aims to recognize the growing importance of the Asia-Pacific region to U.S. national interests.
Successful passage of the TPP will reassure allies in the region of American staying power, he said.
Countries outside of the TPP have begun to express interest in becoming a party to the agreement. South Korea, Taiwan, the Philippines and Indonesia are among them. Application to join the TPP is now closed, but we can “expect over time” that its membership would grow, he said.
At a 2013 conference, FSI scholars examined the potential impact on Taiwan should it seek membership. Outcomes from the conference are published in this report.
Froman said the TPP supports “commerce without borders” among key sectors in the United States, in particular, those found in and around Silicon Valley.
“No state stands to benefit more from the TPP than California,” he said.
Froman announced the release of a report that details TPP provisions focused exclusively on technology and intellectual property.
The event was hosted by the U.S.-Asia Security Initiative in association with FSI, the Shorenstein Asia-Pacific Research Center and the Stanford Institute for Economic Policy Research. The Initiative aims to facilitate constructive interaction between academic and governmental experts on security challenges facing the Asia-Pacific region.
Video from the event including Froman’s speech and the Q&A is available here.