Most of us would probably agree, it is important to make friends. The United States is doing the best it can to do just that. On Monday, October 5, the United States and 11 other Pacific Rim Nations signed the largest international trade agreement in history. It is an exciting yet controversial step taken towards creating a truly globalized economy.
Who, What, When, Where, Why
The trade agreement was made between 11 of the most economically powerful nations in the Pacific Rim, including the United States, Australia, Japan, Canada, Chile, and Vietnam. The goal of the trade agreement is to stimulate the global economy, build equality, and promote fair and humane labor practices. The trade accord has been in the works for almost eight years. It took five days of nearly 12 hours sessions between world leaders and trade officials for the final pieces of the agreement to fall into place.
Evening the Playing Field
As it currently stands, some of these major economic powers place thousands of powerful trade tariffs on each other, which make imports and exports extremely expensive. Trade tariffs placed on automobiles are a well-known example. Japanese auto manufacturers have to pay a large amounts of money to have their cars sold in the United States. Because of this, Japanese cars are more expensive than they would otherwise would be. Japan places similar tariffs on the import of American cars into its country. The new Trans-Pacific Partnership Trade Deal would slowly phase out these tariffs, creating a more level international import/export playing field.
Many individuals argue that the elimination of trade traffic could actually harm the American economy in the long run. They wonder about the consequences of the potentially severe price drops of imported cars. If they become much more affordable, will that harm the domestic car manufacturing industry? The issue is two-fold, as it becomes easier for foreign goods to be imported, it also becomes easier for domestic goods to be exported. Only time will tell the true impact of the Trans-Pacific Partnership Trade Deal.