Turnbull shifts tone of US alliance to economics

An article published on January 19th, 2016 in The Australian Financial Review, http://www.afr.com/news/politics/malcolm-turnbull-backs-us-leadership-in-asia-as-essential-to-china-20160118-gm8nwu, discusses several economic issues between Australia and the United States. It states that Australian Prime Minister Malcolm Turnbull is urging the US Congress to pass the 12 country Trans Pacific Partnership deal. According to Mr. Turnbull, “Free trade is not just good for jobs. It is good for security. The more we trade, the more we rely on each other; the more our supply chains stretch across countries and borders the more there is to lose by a disturbance in the security and order on which our prosperity is founded.” Mr. Turnbull not only stressed the economic importance of signing the trade deal, but also how the international norms and institutions that the US has promoted over the last 75 years has helped provide stability and security in prior free trade deals. Turnbull states, “So central is the Asia-Pacific to the world economy, to global stability, that the preservation of the international order and the peace that it brings has been a consistent and absolutely central objective of both the United States and Australia.” It is very apparent that both the TPP and the Asia-Pacific economy are vital to the continued success of many nations, including both the US and Australia.

What could hold back Congress from approving the TPP? Will the presidential elections have any effect on the US ruling for the TPP?

Trans-Pacific Partnership Is Reached, but Faces Scrutiny in Congress

Now that it’s been finalized, the Obama Administration’s possibly biggest achievement faces an even bigger challenge; Congress (http://www.nytimes.com/2015/10/06/business/trans-pacific-partnership-trade-deal-is-reached.html?_r=0).  Congress will have several months to scrutinize all 30 chapters of the TPP document.  In addition to Congress’s test, Obama’s trade agreement will finally face the public.  Thousands of people were already put-off at the negotiations being done in secrecy; therefore, gaining support will be an uphill battle.  During the negotiation phase, the TPP seemed to mainly attract feelings of ambivalence at best.  To further expound on the drama soon to unfold, the TPP finalization will definitely cause a spark in the soon to come presidential debates.  There were some who are completely against it and vice versa, but that may soon change.  Perhaps finalizing the document via “fast track” approval wasn’t the best move for Obama’s team.  From a spectating standpoint, it doesn’t appear the TPP will get passed.  There’s too many provisions that can’t seem to be agreed upon,  and once Congress tries to amend the agreement, things will really make a turn for the worse, but let’s try to remain positive!

Feel free to read the article (in the link above) and decide what the TPP’s fate will be.

TPP: Why it’s too early to pop the champagne

According to the article, (http://www.cnbc.com/2015/10/06/tpp-why-its-too-early-to-pop-the-champagne.html), it will take many years before the economic benefits of the TPP are actually felt. To start, there are several hurdles to overcome before it is implemented.

First, the deal must be ratified by each country’s legislature, which is looking to be very difficult in the US; both Democrats and Republicans are opposed to the deal, meaning it is possible that the TPP will be blocked in Congress.

Second, and finally, tariffs are due to be lowered and market access increased only gradually, meaning the effects of the deal will be insignificant in the near future. However, the long-term significance of the deal still should not be downplayed.