What is the 'Trans-Pacific Partnership (TPP)'?

The Trans-Pacific Partnership (TPP) is a proposed free trade agreement among 11 Pacific Rim economies. The United States was included initially. In 2015, Congress gave Barack Obama fast-track authority to negotiate the deal and put it to an up-or-down vote without amendments; all 12 nations signed the agreement in February 2016. The following August, Senate Majority Leader Mitch McConnell said there would not be a vote on the deal before Obama left office. 

Since both major-party nominees, Donald Trump and Hillary Clinton, opposed the deal, it was considered to be dead on arrival. Trump's victory solidified that view, and on January 23, 2017 he signed a memo instructing the U.S. trade representative to withdraw the U.S. as a signatory to the deal and pursue bilateral negotiations instead. 

BREAKING DOWN 'Trans-Pacific Partnership (TPP)'

The agreement would have lowered tariffs and other trade barriers among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. In the United States, the deal is viewed in the broader context of the Obama administration's military and diplomatic "pivot" toward East Asia, which then-Secretary of State Hillary Clinton outlined in an Op-Ed in Foreign Policy 2012. 

That year, Clinton said the deal set the "gold standard in trade agreements." Her comment was likely in response to an unexpectedly fierce primary challenge from Senator Bernie Sanders; she has since said that she opposes the deal. Her opponent, Donald Trump, has opposed the TPP and similar deals – including NAFTA, which Clinton's husband signed into law as president in 1993 – as a centerpiece of his campaign. 

Opposition to the deal centers around a number of themes. The secrecy surrounding the negotiations is considered anti-democratic. In addition, trade deals are believed to be the source of foreign competition that has contributed to a loss of U.S. manufacturing jobs. Some are disturbed by the "investor-state dispute settlement" (ISDS) clause, which allow corporations to sue national governments that violate trade agreements.

Supporters of the deal contend that trade agreements open new markets for domestic industries creating new jobs and contributing to economic growth.

Alternatives to the TPP

Following Trump's order to pull the U.S. out of TPP, other signatory countries – which had negotiated for seven years to finalize the deal – have discussed alternatives.

One is to implement the deal without the U.S. Australian Prime Minister Malcolm Turnbull reportedly discussed this option with the leaders of Japan, New Zealand and Singapore following the withdrawal of the United States. A Japanese government official told reporters that the country would not continue to pursue the deal, however. The United States is by far the largest economy to have participated in TPP negotiations, and other countries likely consider the trade-offs involved as unattractive without access to the U.S. market.

China is also pushing for a multilateral Pacific Rim trade deal called the Regional Comprehensive Economic Partnership. The deal would link China to Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, India, Japan, South Korea and New Zealand. While in office, Obama repeatedly emphasized the need to finalize the TPP, arguing, "we can't let countries like China write the rules of the global economy. We should write those rules." 


  1. Pacific Rim

    The Pacific Rim refers to the geographic area surrounding the ...
  2. Free Trade Area

    Free trade areas are regions where member countries have signed ...
  3. U.S.-Mexico Trade Agreement

    The U.S. and Mexico agreed preliminarily to a trade agreement ...
  4. Regional Comprehensive Economic ...

    RCEP is a mega trade deal among 16 Asian nations that could become ...
  5. Clinton Bond

    A Clinton bond was a derogatory for a debt investment deemed ...
  6. SGD

    SGD is a currency abbreviation that refers to the Singapore Dollar, ...
Related Articles
  1. Insights

    Trans-Pacific Partnership Agreement: Pros & Cons

    With President Obama securing fast track authority on the Trans-Pacific Partnership, the benefits for labor and capital can be examined.
  2. Trading

    8 Currencies That Could Gain If Hillary Wins

    This cloud of uncertainty may be creating an opportunity to pick up certain foreign currencies at a discount between now and Election Day – especially if Hillary wins as most analysts still expect.
  3. Insights

    Dem Debate: Muddled Views on Trade & Manufacturing

    International trade and its impact on American manufacturing have been at the center of the presidential contest in both parties, and Hillary Clinton and Bernie Sanders were both eager to make ...
  4. Insights

    Trump May Aim at These New Trade War Targets

    Beyond China, Trump may focus his ire on big trade deficits with India, Thailand, Vietnam and Malaysia
  5. Insights

    Trump Extends Olive Branch to China

    Trump to host Xi as tensions in Asia grow.
  6. Insights

    The Top 9 Things to Know About Hillary Clinton's Economic View

    Find out where former secretary of state and Democratic presidential candidate Hillary Clinton stands on the economy, jobs, trade and education.
  7. Insights

    Will Hillary Clinton Give Bill a Cabinet Post?

    Hillary Clinton says she has asked her husband to come out of retirement and be in charge of a manufacturing renaissance.
  8. Insights

    2016 Presidential Election: Comparing the Net Worths of the Democrats

    Learn about the difference in net worth between Democrats Hillary Clinton and Bernie Sanders. Discover how the candidates attained their wealth.
  9. Insights

    Hillary Clinton Success Story: Net Worth, Education & Top Quotes

    Learn about Hillary Clinton's early life in Chicago, her years in Arkansas with her husband, and her time as first lady, senator and secretary of state.
  10. Insights

    Trump vs. Clinton's Tax Plan: What Wall Street Thinks

    Hillary Clinton's continuation of Obama's policies provides stability, but Trump policies may be disruptive but otherwise appealing.
  1. What was the Whitewater scandal?

    Learn about the real estate controversy involving former President Bill Clinton and his wife Hillary, known as the Whitewater ... Read Answer >>
  2. Why is Singapore considered a tax haven?

    Discover why Singapore is considered a tax haven, and learn about corporate tax rates and incentives that make this city-state ... Read Answer >>
Trading Center