After years of talks that never seemed to end, the 12 nations behind the Trans-Pacific Partnership (United States, Canada, Mexico, Chile, Peru, Australia, New Zealand, Vietnam, Malaysia, Singapore, Brunei, and Japan) have finally dotted the i’s, crossed the t’s, and reached a deal.
Economically, this creates the largest free-trade zone (or, if one prefers, freer-trade zone) in the world. Approximately 40% of the global economy will reduce trade barriers with each other over a 15-year period (National Post). Lower trade barriers usually means more efficient production, greater economic growth, and more consumer choices. However, not the benefits come with concentrated cost in certain industries – and they will be heard, loudly.
Geopolitically, it sends a shot across the bow of the Chinese Communist Party (and less directly, to Russia), neither of which are part of the zone.
However, it is in the political arenas of the United States and Canada where the earliest reaction will be witnessed. Canada itself goes to the polls in two weeks, and the opposition New Democrats (the social democrats in Canada) already blasted the agreement before it was signed. TPP could very well blast clear the political landscape in the Great White North, leading to a potential repeat of the 1988 election, which settled the argument over the Free Trade Agreement with us (at least, if Tory hopes are realized – they are hoping to win a second straight majority for the first time since that year).
Here in the US, Bernie Sanders has already ripped the deal (CNN), and while I have yet to see Donald Trump’s reaction, I doubt it will be cheerful. The agreement could split both parties into their free-trade and protectionist wings. The five words “Battle for the soul of” will get thrown around quite a bit over the next several months.
Buckle your metaphorical seat belts…
