Bottom Line: Does the TPP Trade Deal "Put American Workers First"?

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The full text of the Trans-Pacific Partnership (TPP) has finally been released and We the People can see what has been negotiated in our name. President Obama laid out the bottom line, saying the deal "puts American workers first." Does it?

TPP Text

The full text of TPP can be seen here. The text consists of more than a thousand pages of incomprehensible legalese like this:

"...the rate of customs duty applicable to the originating good from the Party where the good acquired the originating status in accordance with the process requirement or change in tariff classification requirement set out in Annex (PSR); or (ii) the rate of customs duty applicable to the originating good from the Party where the largest value was added among claimed production process, or the highest rate among the rates applicable to the originating good from those Parties involved in claimed production process, when the good acquired the originating status through a production process in accordance with the requirement set out in Article DD. 2(a), (b) or the regional value content requirement set out in Annex (PSR)."

and this:

"Pursuant to paragraph 1(b), the Commission shall review the operation of this Agreement with a view to updating and enhancing this Agreement, through negotiations, as appropriate, to ensure that the disciplines contained in the Agreement remain relevant to the trade and investment issues and challenges confronting the Parties."

You get the picture. This is going to take time and experts to figure out. Worse, it was negotiated in a corporate-dominated process, so if TPP is approved we have to assume that anything that is hard to understand or ambiguous will later be used to justify taking from We the People and giving to A Few People.

So Does TPP "Put American Workers First"?

President Obama set down the bottom line of TPP by releasing a statement calling TPP, "a new type of trade deal that puts American workers first." In the statement he wrote, "If you're an auto worker in Michigan, the cars you build face taxes as high as 70 percent in Vietnam."

It is interesting that he would use the example of auto workers here. The September post "TPP Terms Are Even Worse For U.S. Than NAFTA?" looked at how TPP will affect the American auto industry and found:

"Under NAFTA 62.5 percent of the value of cars and 60 percent of auto parts must be made in NAFTA countries, or a tariff will apply. But for TPP the U.S. Trade Representative Michael Froman appears to have made a deal saying only 45 percent for cars and 30 percent for parts need to be made in TPP countries -- the rest of that business goes to China and other non-TPP, low-wage, low-labor-standards and low-environmental-protection countries. The result will be a huge shift of jobs and business away from American, Mexican and Canadian auto and parts makers."

Now we know the actual terms. Canada's Globe and Mail reports, in "Canadian auto sector alarmed by concessions revealed in full TPP text," that...

"Canada's auto parts makers, who employ 81,000, say the text of the agreement shows the local-content protections for vehicle components are significantly skimpier than the former Conservative government had advertised. Former prime minister Stephen Harper had said local-content requirements for important vehicle components would be between 40 percent and 45 percent.

"...Engine parts and such body stampings as truck frames and metal roof panels will only be required to have TPP content of 35 percent."

Basically when we are talking about "non-TPP countries" getting some percent of the business, we are really just talking about China. So says tariffs do not apply if 35 percent to 45 percent of the car and parts are made in TPP countries. This means that 55 percent to 65 percent of the car and parts can be made in China and still be tariff-free. This is much worse than even NAFTA, which, as we know, destroyed American auto and parts manufacturing jobs and entire regions of our country.