Talking Up Trade in an Election Year

By Peter M. Robinson

The presidential candidates are distorting the facts about trade and jobs. We all need to push back.

USCIB President and CEO Peter Robinson
USCIB President and CEO Peter Robinson

To hear many of the contenders for the White House tell it, international trade is a dead end. There have been numerous memorable quotes from both sides of the aisle that I won’t dignify by repeating here. Nearly all the candidates say the Trans-Pacific Partnership needs to be scrapped or renegotiated.

Such rhetoric, coming from politicians who use it to convince people to vote for them, is extremely disturbing. Why? Because it is distorting the facts about trade and jobs! While the anti-trade diatribes coming from the campaign trail tap into a tangible belief among many disaffected voters that trade policy and the economy in general are rigged against them, they fly in the face of a recent Gallup poll that reports that Americans continue to believe—by a wide margin, 58 to 34 percent—that international trade presents an opportunity rather than a threat.

We in the business community have a responsibility to remind people – including our political leaders – of the facts, and cut through the hyperbole. We need to speak out to help our employees, our shareholders and the communities we operate in understand that the world is growing around us, and that we cannot – nor can other countries – afford to turn inward.

Page2_GallupThe fact is, expanded trade over the past two decades has boosted annual U.S. income by about ten percent of GDP – thousands of dollars per household – relative to what would have been otherwise. A study from the Peterson Institute for International Economics says the United States stands to be a big winner – the biggest winner – from the TPP, with income gains of some $130 billion by 2030. This growth is essential if we are to meet our goals in terms of new and better jobs, and an expanded middle class.

U.S. negotiators drove a hard bargain in the TPP talks, and – while no one, including the business community, got everything they wanted – we came away with an agreement that puts our most competitive industries, and the people they employ, in a good position for strong growth in the burgeoning Asia-Pacific marketplace. This is good news for American workers, since export-oriented companies pay, on average, 18 percent higher wages than their non-exporting counterparts.

It is also important to remember that trade liberalization serves an important geopolitical role, cementing U.S. leadership and a safer, more prosperous world – one where we can address common challenges like tackling climate change, fighting terrorism and lifting people out of poverty. In today’s world, everyone benefits when America leads.

We should take anxiety over trade seriously. But the gains from an agreement like TPP far outweigh the costs. And jobs lost to trade as a result of the agreement can and should be addressed via enhanced Trade Adjustment Assistance, something the business community has long supported. We also need to acknowledge that job dislocation is being spurred by technological advances and corresponding transformative disruptions.

An important priority will be connecting necessary skills development to the jobs of tomorrow. And as World Trade Organization Director General Roberto Azevedo has observed, increased trade, by boosting income and creating better jobs, can play an important role in raising skills and reducing inequality, both within countries and across borders.

Boosting investment for the future

To meet both the opportunities and the demands of the 21st-century economy, the United States needs a comprehensive approach to invest in enhanced competitiveness. Such an approach should encompass serious efforts to improve education and training, rebuild our infrastructure, reform the tax code and improve our regulatory environment.

We also need to invest in future agreements to open up markets for American goods and services. In this regard, it is extremely important to promote open and well-functioning investment policies and regimes. Private investment, in addition to traditional trade, will be a critical factor in the years to come.

At every opportunity, USCIB has sought to demonstrate the positive economic benefits of foreign direct investment – both inbound and outbound – for the American economy. A 2013 report by Professor Matthew Slaughter of Dartmouth, commissioned by USCIB and the Business Roundtable, demonstrated convincingly that U.S. companies who grew their overseas operations to access foreign markets exported more, and provided more and better jobs at home.

USCIB is working hard to address barriers to investment abroad, both in trade agreements like TPP and international organizations that design rules of the road for their member governments. Our members continue to face policy and regulatory barriers that inhibit entry into specific markets, and impede their ability to design, produce, market and distribute their products globally. Unlocking their ability to invest and compete abroad will be critical to American success in the 21st century, leading to sustainable enterprise and job creation.

In a recent op-ed in The Wall Street Journal, Professor Slaughter and Morton Kondracke, the former executive editor of Roll Call, posed the question: “Who will step up to tell the compelling trade story that America needs to hear?”

We, for one, will. And I hope that we can count on everyone in USCIB’s membership to join us and our partners in the broader pro-trade community, in Washington and around the world, to make the case for international trade, and for investing in the future of our country.

Defending Investor Protections in Trade Agreements

Shaun Donnelly
Shaun Donnelly

Investment protections such as the Investor-State Dispute Settlement (ISDS) mechanism have become the most contentious aspect of many ongoing trade deals, including the Trans Pacific Partnership (TPP). Shaun Donnelly, USCIB vice president for investment and financial services, traveled around Europe this week defending strong investment policies in U.S. trade agreements.

On March 14, Business and Industry Advisory Committee (BIAC) to the OECD Investment Committee Chair Winand Quaedvlieg and Donnelly led business panelists in an all-day OECD conference on “Investment Treaties: the Quest for Balance.” NGO, labor and academic speakers pressed for radical changes and reduced protections ‎in investment agreements. Donnelly’s panel focused on possible changes in the ISDS regime, including the EU’s proposed investment court and appellate body system.

“I argued the U.S. model BIT already offers a balanced investment regime and that many so-called reforms were simply political attacks on investor rights and protections,” Donnelly said. “I, along with other speakers and participants, was skeptical of the EU’s ‎proposals to abandon the ISDS arbitration system.”

USTR’s lead investment negotiator for TTIP, Jai Motwane, was a co-panelist with very similar positions. Senior State Department Investment policy makers Lisa Kubiske and Michael Tracton spoke on other panels.

Donnelly attended other consultations throughout the week in Paris, both formal and informal, on investment issues with OECD Investment Committee members, senior OECD staff, and country delegations. He participated in the OECD’s special ministerial meeting on Anti-Bribery on March 16 with Klaus Moosmayer from Siemens, Chair of the BIAC Task Force on Anti-Bribery and Corruption. U.S. Attorney General Loretta Lynch led the U.S. Delegation to the special ministerial meeting.

Donnelly wrapped up in The Hague‎ on Friday, representing USCIB at the International Chamber of Commerce’s Trade and Investment Commission, chaired by USCIB member Jim Bacchus (Greenburg Traurig). USCIB has contributed to major ICC policy papers on investment and cross-border data flows that were discussed at the meeting.

Read BIAC’s media release: Curbing Bribery and Providing a Level Playing Field for International Business

USCIB Hails Signing of TPP in New Zealand

Harbor_tradeNew York, N.Y., February 3, 2016 – Welcoming a milestone on the road leading to the ratification of the Trans-Pacific Partnership (TPP), USCIB hailed the signing of the agreement by 12 countries in Auckland, New Zealand today (February 4 local time). TPP is a historic market-opening free trade agreement whose Pacific-Rim members represent 40 percent of global GDP.

“The signing is an important next step, since TPP will increase American export opportunities, support U.S. jobs, and advance security and rule of law across the Asia Pacific region,” said USCIB President and CEO Peter Robinson. “We applaud the U.S. government and our TPP partners for moving forward on an agreement that will create so many benefits for workers, families and businesses.”

Robinson noted that hard work still remains, with the ratification of the agreement by Congress and other national governments. USCIB is committed to working with the Obama administration, Congress and its members to ensure that TPP becomes law.

USCIB is a leading member of the U.S. Coalition for TPP, a broad-based group of American companies and associations representing all sectors of the U.S. economy. The Coalition issued a statement in support of TPP in January.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network – encompassing ICC, the International Organization of Employers, and the Business and Industry Advisory Committee to the OECD – USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

More on USCIB’s Trade and Investment Committee

Is the Trans-Pacific Partnership a Catalyst for Climate Action?

L-R: Claire Reade (Arnold & Porter), Ben Beachy (Sierra Club), Norine Kennedy (USCIB) and Michael Gerrard (Columbia Law School)
L-R: Claire Reade (Arnold & Porter), Ben Beachy (Sierra Club), Norine Kennedy (USCIB) and Michael Gerrard (Columbia Law School)

One of the most important challenges in 2016 will be developing mutually reinforcing international trade and climate policies, seeking synergies in the global market place for economic growth and environmental innovation. Yet difficulties remain. Nowhere is this more evident than in the controversy swirling around the Trans-Pacific Partnership, a free trade agreement between 12 Pacific-Rim countries representing 40 percent of global GDP, and the perception by some groups that TPP could impede climate action. USCIB champions free trade, investment and climate action, and supports TPP and other free trade agreements, along with the United Nations Paris Agreement, and is uniquely placed to advocate for the important links between them.

USCIB participated in a panel on January 19 organized by the Columbia Center on Sustainable Development (CCSI) about the effects of TPP on domestic and international climate change policy.  While much of the discussion focused on TPP’s investment chapter, Norine Kennedy, USCIB’s vice president for strategic international engagement, energy and environment, urged panelists to consider TPP as a whole in economic and environmental terms, especially in the context of the recently concluded UN Paris Agreement, which will require substantial investment, finance and technology cooperation to meet ambitious objectives for greenhouse gas reduction.

Claire Reade (Arnold & Porter) argued TPP goes above and beyond the environmental protections found in previous trade agreements and would facilitate the transfer of clean technologies,  Moreover, it will provide recourse for U.S. companies of all sectors, such as clean energy and green technology, in cases of discriminatory or unlawful treatment by host governments. However, Ben Beachy (Sierra Club) and Lise Johnson (CCSI) stated concerns that the agreement’s Investor-State Dispute (ISDS) mechanism would increase legal actions against governments and hinder environmental regulations among TPP parties.

Kennedy argued that investors require security and protection to make the investments needed to implement the Paris outcomes, and ISDS through TPP is an important part of that.  “Both the UN Paris and TPP agreements are too important to fail,” Kennedy said, and reminded the group of President Obama’s final State of the Union Address highlighting the need for both rapid climate policy implementation and ratification of TPP.

The TPP agreement’s 30 chapters cover issues ranging from market access, to intellectual property rights, to labor standards. TPP offers opportunities to strengthen climate action via provisions on capacity building, regulatory coherence, anti corruption and rule of law.

“TPP is a must-have for climate action,” Kennedy concluded. “It’s part of the bigger picture of policy and market infrastructure for climate-friendly economic activity.”

USCIB Applauds Obama’s Call to Ratify Pacific Trade Pact

SOTU_2016
President Obama delivers his final State of the Union address on January 12, 2016.

New York, N.Y., January 12, 2016 – USCIB welcomed President Obama’s call in his State of the Union address for Congress to ratify the Trans-Pacific Partnership (TPP) agreement, a market-opening trade deal between the United States and eleven Pacific-Rim countries.

“U.S. business remains united behind TPP,” said USCIB President and CEO Peter Robinson. “This landmark agreement will enhance American competitiveness, support U.S. jobs, eliminate thousands of tariffs and expand the rule of law in the Asia-Pacific region.”

USCIB voiced support for TPP in a statement last month, saying that after reviewing the agreement’s text and consulting with its broad membership, USCIB believes the agreement “will contribute substantially to economic growth in the United States and the region, cement U.S. global leadership and provide significant new opportunities for U.S. businesses, workers and farmers.”

A central component of the United States’ foreign policy in the Asia-Pacific, TPP would help establish American commercial values in the region, with new standards to promote good governance and transparency.

Robinson continued: “We look forward to working with the administration and Congress on a range of issues raised by the president in his address, especially trade, and we urge legislators to secure TPP’s passage.” He noted that TPP would set new, high standards for future trade agreements.

The U.S. coalition for TPP, of which USCIB is a leading member, issued a statement in support of TPP last week.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network – encompassing ICC, the International Organization of Employers, and the Business and Industry Advisory Committee to the OECD – USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

More on USCIB’s Trade and Investment Committee

US Coalition For TPP Statement Of Support

Harbor_tradeToday the U.S. Coalition for TPP, of which USCIB is a leading member, issued the following statement in support of the Trans-Pacific Partnership (TPP):

“Since its inception, the U.S. Coalition for TPP has advocated for a Trans-Pacific Partnership (TPP) agreement that would increase U.S. export and economic opportunities, support American jobs, strengthen trade-enforcement tools, and advance security, stability, and prosperity throughout the Asia-Pacific region.

“The U.S. Coalition for TPP has considered the text and finds that it will advance U.S. global competitiveness in the region and set in place modernized rules for the benefit of many industries and their workers in the United States.

“A world with the Trans-Pacific Partnership will help expand the rule of law, transparency, and fairness in the region. It is an agreement that will serve to improve the lives of millions of people in the United States and its TPP partners. It will do so by encouraging competition and setting disciplines in government acts, policies, and practices among the 12 Pacific Rim members that will set an example to which other countries will aspire. As a leading force behind the TPP negotiation, the United States will have, once again, established its preeminent role as a world leader in promoting peace and a more secure future through prosperity that comes from a commitment to liberalized trade and investment.

“The U.S. Coalition for TPP supports the agreement as a significant step forward to a fairer and more-level economic playing field in the Pacific Rim. We also encourage the U.S. government to work with Congress and the 11 TPP partner countries to strengthen the agreement further, thereby expanding support for this important achievement.

“We encourage Congress to give the agreement timely consideration and ultimately support its passage.”

Below are nine specific TPP achievements that will create benefits for American workers, families, and businesses.

  • Reduction of discriminatory tariffs and non-tariff barriers throughout the region, including the total elimination of 100 percent of tariffs on qualifying industrial goods and textiles exports
  • Increase in market access for U.S. agriculture products, reduction of non-tariff barriers to agriculture trade, and expansion of sanitary and phytosanitary provisions
  • New, binding commitments in e-commerce that promote digital trade, spur innovation for new goods and services, and implement strong consumer protections
  • Stricter controls for state-owned enterprises (SOEs), including requirements that they make purchasing decisions based on quality and price, not favoritism
  • Strong enforcement mechanisms, including trade sanctions, that ensure TPP countries comply with the new standards established by TPP
  • New standards and a mechanism to promote good governance across the region by including anti-corruption rules, implementation of anti-bribery laws, and guarantees of due-process rights
  • Provisions to streamline and simplify the movement and release of goods across borders and provide much-needed business predictability on the treatment of goods at the border
  • Promotion of regulatory transparency and cooperation to help address barriers imposed by inconsistent regulatory regimes
  • A first-of-its-kind commitment to help small and medium-sized businesses obtain greater opportunities out of trade agreements

About The Coalition
The U.S. Coalition for TPP is a broad-based and cross-sectoral group of U.S. companies and associations representing the principal sectors of the U.S. economy including agriculture, manufacturing, information and communications technologies, merchandising, processing, publishing, retailing and services.

State Department’s Catherine Novelli Briefs USCIB Members on TPP

L - R: Joe Schoonmaker (NYDEC) and Catherine Novelli (U.S. Department of State)
L – R: Joe Schoonmaker (NYDEC) and Catherine Novelli (U.S. Department of State)

The 12-nation Trans-Pacific Partnership (TPP) agreement is one of the most ambitious and potentially transformative trade agreements in decades. U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Catherine Novelli stopped by USCIB’s offices in New York on December 16 for a discussion about TPP and how the agreement will benefit the Asia-Pacific and help carve a place for U.S. exports in the region.

The New York District Export Council, the Manhattan Chamber of Commerce, and Business Forward joined USCIB for a White House Business Council briefing with Under Secretary Novelli, who provided on overview of TPP and outlined the provisions that will boost U.S. competitiveness, including the removal of data localization requirements, intellectual property protections and path-breaking commitments on labor and environmental standards.

“This is the place where markets are,” Novelli said, speaking about the Asia-Pacific and how TPP will liberalize trade in a region that is home to two-thirds of the global middle class.

Novelli noted that on environmental issues, the United States is very competitive in energy efficiency and clean energy, so TPP will provide an opportunity for U.S. exports of green products and services. She also mentioned that all twelve countries will be obliged to enact and enforce intellectual property laws, which benefits all businesses. And on China, Novelli stated that although China had not expressed interest in joining TPP, the agreement is a critical component of America’s foreign policy in Asia, as it sets new liberal trade rules in the region.

Attendees at the briefing included Joe Schoonmaker, chair of the New York District Export Council, Alex Tureman, programming director at Business Forward and Nancy Ploeger, president of the Manhattan Chamber of Commerce. Jonathan Huneke, USCIB’s vice president of communications and public affairs, moderated the discussion.

 

 

How Obama Gets a Vote on TPP Before Summer

Politico, Morning Trade

BUSINESS GROUP GIVES TPP QUALIFIED ENDORSEMENT: Meanwhile, a major business group, the New York-based United States Council for International Business, urged Congress to approve the Trans-Pacific Partnership, but also called on the administration to fix problems with the pact before sending it to Capitol Hill.”

Read the full Politico article.

USCIB Voices Support for the Trans-Pacific Partnership

Will push for congressional ratification, but urges some shortcomings in agreement be addressed

washington-Lincoln-MemorialsNew York, N.Y., December 8, 2015 – The United States Council for International Business (USCIB) supports the Trans-Pacific Partnership Agreement (TPP) and urges members of Congress to approve TPP. After reviewing the text of the agreement and consulting with our broad cross-sectoral membership as well as our Board of Directors, USCIB believes that the TPP agreement will contribute substantially to economic growth in the United States and the region, cement U.S. global leadership and provide significant new opportunities for U.S. businesses, workers and farmers.

The TPP expands market access in the region through elimination of tariff and non-tariff barriers as well as breaking new ground in addressing growing regulatory impediments to trade. Some of the key measures include:

  • Eliminates 98 percent of tariffs in the TPP region including on a wide range of U.S. agricultural exports.
  • Establishes new rules protecting cross border flow of data and prohibiting forced localization of servers, while also requiring governments to ensure protection of personal information wherever it is stored.
  • Sets new disciplines on state-owned enterprises, including limitations on sovereign immunity, non-commercial assistance and increased transparency requirements.
  • Provides more comprehensive opening of markets for service providers through negative lists that expand the scope of opportunities for many U.S. service providers.
  • Establishes disciplines on regulatory developments and creates a Regulatory Coherence Committee to help prevent emerging regulations from creating trade barriers.
  • Streamlines and simplifies customs procedures throughout the region by requiring advanced rulings and other measures to improve transparency and facilitate movement at the border.
  • Strengthens labor and environment provisions.

While we support TPP, we also believe that it could be improved by addressing provisions in the agreement that limit or exclude protections for certain sectors. We urge the Administration to work to address these limitations before submitting the final agreement to Congress. Dealing with these concerns would avoid any possible negative precedents for future agreements and facilitate consideration of TPP under Trade Promotion Authority.

With slowing global trade and modest economic growth forecasts, passage of the TPP is a critical act and affirmation by governments representing almost 40 percent of world GDP that protectionism is not the answer and that liberalized markets in which businesses are allowed to compete on a level playing field are the best formula for creating jobs, opportunity, innovation and spreading the rule of law more extensively in the region. This reality is already being grasped by many other countries that now aspire to join the TPP.   The United States and the global economy will be better off with a TPP and USCIB will work with the Administration and Congress, as well as our global business partners, to secure passage.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

USCIB, Bloomberg Hold Conference on TPP & New Trade Rules in the 21st Century

L-R: Scott Miller (CSIS) and Shaun Donnelly (USCIB)
L-R: Scott Miller (CSIS) and Shaun Donnelly (USCIB)

With the release of the full text of the Trans-Pacific Partnership (TPP) agreement last month, companies and business groups are poring over the text to assess the potential impact of the 12-nation pact – one of the most ambitious and potentially transformative trade agreements in decades. On December 2, USCIB partnered with Bloomberg BNA to organize a day-long event at Bloomberg’s headquarters in New York titled “The Trans-Pacific Partnership: Interpreting New Rules for Trade in the 21st Century.”

Architects of the TPP, business representatives and think tank scholars gathered for panel discussions about whether TPP delivers on its promise to open markets, how the agreement will promote digital trade and innovation, how TPP will create a more level field for investment, and whether the agreement will address non-tariff barriers. Shaun Donnelly, USCIB’s vice president for investment and financial services, spoke on the investment panel.

Other partners in organizing the event included Covington & Burling, the National Foreign Trade Council and the Peterson Institute for International Economics.

Market Access

“TPP is an exportation of American commercial values and U.S. values with respect to labor and the environment,” said Gary Hufbauer, senior fellow at the Peterson Institute for International Economics. The agreement will open many markets for U.S. products that weren’t accessible in the past. TPP is also forward-looking, in that the benefits that accrue to the U.S economy due to trade liberalization will continue indefinitely, and the agreement opens the door to further liberalization and to the possibility of new countries joining in the future.

For many of the other 11 members of the agreement, TPP serves as an impetus for domestic economic reforms and further market openings noted John Veroneau, former deputy U.S. Trade Representative and now a partner at Covington & Burling. Panelists also noted that because that multilateral trade talks at the World Trade Organization are stalled, plurilateral agreements like TPP are the next best option for pushing forward economic liberalization and establishing new global rules for trade.

Although certain industries have some concerns about the agreement, such as limited pharmaceutical patent protection and carving out the financial services sector from the ban on local data storage restrictions, the business community as a whole appears supportive of the agreement. Many business groups including USCIB continue to review it.

Most importantly, panelists said TPP will export American rule-o- law to the Asia-Pacific region, making it easier and less risky for companies to do businesses in countries with vastly differing levels of economic development. Expanded free trade will also benefit low-income consumers, since prices on goods such as clothing and food will fall once TPP takes effect.

“Using TPP to strengthen the rule-of-law in other countries is more important, in the long term, than tariff reductions,” concluded Veroneau.

Digital Trade and Innovation

L-R: Dorothy Dwoskin (Microsoft) and Ed Brzytwa (ITI)
L-R: Dorothy Dwoskin (Microsoft) and Ed Brzytwa (ITI)

TPP is the first trade agreement that explicitly recognizes the importance of e-commerce for the global economy. As such, the agreement includes many provisions that will be beneficial to all businesses, such as IP protections, criminal penalties for trade secret theft, forbidding restrictions on cross-border data flows, and preventing localization requirements on data processing and storage centers.

“TPP’s IP chapter speaks to how we see the world,” said USCIB member Ed Brzytwa (Information Technology Industry Council). “All companies rely on cross-border data flows.” The agreement states that all parties must allow cross-border data transmissions.

Panelists also noted that TPP offers a roadmap to developing countries such as Vietnam that want to become digital economies.

In terms of the agreement’s benefits to business in the digital trade space, panelists said that TPP affirms IP principles, protection of trade secrets, and strengthens IP law. TPP is setting the new trade rules that will influence other trade agreements, and the agreement contains all the provisions that businesses like to see: transparency, due process, and predictability. Finally, TPP combats digital protectionism.

“TPP is a club that other countries in Asia can’t afford not to be in,” said USCIB member Dorothy Dwoskin (Microsoft).

USCIB member Gina Vetere (Covington & Burling) emphasized the importance of strong intellectual property provisions in TPP to protect and incentivize American innovation and jobs.

Investment Policy

Investment provisions in trade agreements have become top-of-mind for many companies in recent years, because in order to access foreign markets and succeed in the United States, businesses must invest heavily abroad. As a result, much attention has been focused on investment agreements in general and specific provisions of the TPP agreement such as Investor-State Dispute Settlement (ISDS), which offers private investors a neutral, fair arbitral option for settling investment disputes with foreign governments.

Panelists noted that as a whole, TPP protects U.S. investors. One area of concern brought up by USCIB’s Donnelly is the agreement’s carve-out of the tobacco sector from access to the ISDS arbitration provisions, which establishes the unfortunate precedent of governments politicizing access to key provisions of a trade agreement.

“It’s a slippery-slope problem,” said Donnelly. “Now countries have carte blanche to discriminate against or do whatever they want with certain sectors they deem to be bad.”

Overall though, panelists agreed that the business community is looking forward to the agreement’s approval and entry into force. Business seeks clear, enforceable rules that are stable and predictable, and TPP helps establish a friendly environment for investment among the 12 member countries. And despite some public criticism of ISDS, the TPP negotiators have been responsive to concerns about transparency in the arbitration process, and provisions have been included in the agreement that makes the ISDS process open to public scrutiny.

On investment, TPP is attractive to business because it opens up more sectors to foreign investment, and helps makes those investments less risky. Proof of the agreement’s appeal lies in the fact that several other countries are already eager to try to join, including the Philippines, Taiwan (Province of China) and South Korea.

“TPP is magnetic,” said Scott Miller, senior advisor at the Center for Strategic and International Studies. “Many countries want to join.”

Cutting Red Tape

Although tariffs are problematic, the largest barriers to trade in the 21st century are non-tariff barriers, or red tape of any stripe. These include technical barriers to trade such as in-country testing requirements for products, localization requirements and burdensome customs procedures.

Ed Gresser, director of policy planning and acting assistant U.S. Trade Representative for trade policy and economics, described TPP as an agreement that is “large, comprehensive, and forward-looking.” As a trade agreement among 12 Pacific-Rim countries, TPP is larger than all other free trade agreements combined. The agreement is comprehensive because it addresses specific concerns of individual industries, and it seeks to streamline the standard-setting process to eliminate technical barriers to trade. And TPP is future-looking because it takes the digital economy into account by preventing restrictions on cross-border data-flows, and because the agreement will be open to new members joining.

TPP addresses many non-tariff barriers, with provisions that harmonize standard-setting, eliminate localization barriers, simplify customs documents, and requires all parties to allow electronic payment across borders.

A key take-away from the event’s panels was that TPP is a critical component of the United States’ pivot to Asia, as the agreement creates new standards for global trade based on American values.

“TPP will export our system of values and laws,” said Donnelly.

The event program and a full list of speakers are available on Bloomberg BNA’s website