If you have been paying attention to the news the past few months, you have probably heard about the terms TPP and TPA. You may wonder what that means and why you should pay attention to it and it’s not easy to follow along with.
Luckily, we here at the University Chronicle are here to help make it easier for you to understand why it is important and how it will affect you (the college student) in today’s competitive job market.
Let’s start off with the basics. TPP stands for Trans Pacific Partnership which could be the largest trade accord in history, if passed. It could be one of the most audacious trade deals since the North American Free Trade Agreement in 1994, which opened up free trade amongst the United States, Canada and Mexico.
The deal would open up trade with the Asian Pacific countries such as China, Japan, South Korea and even Australia. Along with these and other countries across the Asian Pacific Region involved in TPP amounts to 40 percent of the world’s economy (that adds up to twelve countries in total).
This would give American manufacturers the green light to open factories overseas, which would provide more affordable products to America and give the U.S. the ability to sell products such as cars in other countries that were not available before. These actions would bring a new set of standards for labor, economics and the environment along the Asian Pacific region.
So who exactly is for TPP? This is not your typical issue where all Democrats are on one side and all republicans are on the other causing a gridlock. According to an article written by CNN, those who are for TPP are Big Businesses, Congressional Republicans and President Obama.
Their reasoning for supporting TPP are interests in trading with Japan, being able to import cheaper shirts and shoes, prevent fake knockoff medicines from being sold in other countries and sell products to the asian pacific region such as American made cars.
And who exactly is against TPP? The Tea Party, Labor Unions and Massachusetts Sen. Elizabeth Warren, who has spoken out against the trade deal at a number of events.
The reason why these groups are against it is because they believe it puts American factory jobs at risk by taking all of the positions and sending them overseas for cheaper labor and only pushes the agenda of multinational corporations.
Sen. Warren also argues that a lot of the countries in the trade agreement, do not have strong economic and legal systems, which could lead to problems down the road.
So, What is TPA?
TPA stands for Trade Promotion Authority, a bill that was passed in mid June which could allow for a bill very similar, if not exactly like TPP to pass in the United States. If the bill were to come out and given to congress, they would not be able to make any serious modifications to it before the president signs it into law.
So how would TPP effect Minnesota?
With Minnesota’s thriving economy, a deal like TPP would have a great effect on the land of 10,000 lakes (and manufacturers for that matter). Minnesota holds 19 fortune 500 companies including 3M, Target and Best Buy, along with one of the largest agricultural businesses in America. The state is also a large producer of Iron.
Mikhail Blinnikov, Director of the Global Studies program and professor of Geography at SCSU said that not all of the information about TPP is clear enough to fully understand how the bill would affect Minnesota businesses, “it is very secretive, there is about 29 chapters in the deal and only six of them have to deal with trade of specific goods, services and copyright issues.”
Minnesota’s agricultural industry could be effected in two ways, first big businesses would save money on imports and exports of certain products, increasing profit, but local farmers could potentially suffer a loss, much like in the North American Free Trade Agreement when much of the farming was shipped over to Mexico because of cheap labor, even though some farmers gained money, from importing goods like corn into the country from long distance tracking jobs.
Unfortunately, this created a loss for a lot of local family farms who survived off of growing their crops for an annual income.
Agricultural jobs were gained, but also lost and the United States is still trying to quantify the effects of NAFTA, even after 20 years of it being put into place.
Along with agriculture, mining plays a huge role in Minnesota’s imports which include both Iron and steel products.
“Japan and the United States have been competing with each other in the steel business for many years, but our mining exports in steel are very trivial to those of Japan’s, our biggest export in the mining industry is iron, which we would mostly be competing with Australia” Blinnikov said.
So how do American businesses save money by importing goods and services overseas rather than having them made in their own country? Dr Blinnikov explained that because American companies and manufacturers are required by law to give their workers health care benefits, provide ethical working environments and are regulated heavily on pollution, a lot of these companies profits are lower because of the amount of expenses they have to pay for American workers.
If the companies can get cheap labor overseas that doesn’t require them to pay for workers healthcare and create a safe working environment, thus they can get the products for cheaper and make more profit for less marginal utility.
“Chances are with TPP, a lot of technical jobs will be created, but a lot of the blue collar working class jobs will be diminished and a lot of the people working the manufacturing jobs are 40-45 year old males who only have a high school diploma or a few years of college.” Dr. Blinnikov explained.
With TPP, if passed, some jobs in Minnesota will be gained and some will be lost. As for those who plan to finish college, most likely those students will still stand strong in the job market, for those who don’t it is tough to see, since we are still seeing the effects of NAFTA.