TPP and U.S. Exports – What’s Next?

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By Frank Samolis , Global Trade Oct 13, 2015

Increase in U.S. Exports Will Vary by Industry

After several missed deadlines and multiple rounds of negotiations, the Trans-Pacific Partnership (TPP) ministerial meeting in Atlanta concluded on October 5 with the announcement of a final deal. If implemented, the agreement would cover 40 percent of global trade. While the full text of the 30-chapter deal is not expected to be available for several weeks, the Obama administration and the Office of the U.S. Trade Representative (USTR) recently released background information, which provides a general overview of the agreement. Supporters of the TPP agreement suggest that the deal will open markets for U.S. goods. However, whether the agreement will significantly increase U.S. exports will vary by industry.

For many industry stakeholders, the agreement will standardize the export process and open up new markets. A critical component of the agreement is that it eliminates or reduces tariffs on a broad range of industrial and agricultural goods. The agreement also addresses other non-tariff trade barriers, requiring restrictions on imports for safety or environmental reasons to have a scientific basis. This is a boon for many U.S. manufacturing businesses, which are currently locked-out of some Asia-Pacific markets due to tariff or non-tariff trade barriers.

On the other hand, some U.S. industries may find it difficult to compete with the products from other countries involved in the deal. If early reports are accurate, the agreement could have a significant impact on the automobile and the pharmaceuticals industries.

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