November 5, 2015 | By

Christmas Comes Early for Trade Geeks! (Or How to Read the TPP)

At 1,121 pages, plus market access schedules, plus 58 side letters, how does one digest the TPP?

One month after the conclusion of Trans-Pacific Partnership (TPP) ministerial talks in Atlanta, the participating countries released the text. There’s an awful lot there. By the count of Inside U.S. Trade, it comes in at 1,121 pages, plus market access schedules, plus 58 side letters. Everyone I know will be reading it electronically, but if electrons could land with a thud, this one would be resounding.
 
So how does one go about reading this?  TPP negotiators have been ripped for excessive secrecy. Now the critics got what they have been seeking; the proverbial dog has caught the car. How to digest it?
 
There is good news and bad news.  The good news is that the United States Trade Representative (USTR) appears to have done an unusually good job of presenting the material in an accessible way. In addition to a table of contents, with chapter summaries, there is also a web page with FAQs and other presentations.
 
The bad news? There are at least two layers of “language” barriers. The first barrier consists of conventional trade terms that will not be familiar if you operate outside the world of trade: negative-list commitments, non-conforming measures, sanitary and phytosanitary regulation. This has been the standard lexicon of trade for decades, but even if you took an undergraduate trade course, you probably won’t recognize these unless your professor was particularly policy-oriented.
 
The second barrier afflicts even trade geeks. If the real story of the TPP were tariff cuts, then we might have a ready measure of its impact. If we knew that average tariffs used to be 20 percent, for example, and within 5 years they will be 2 percent, that would give one accessible measure of progress. But the real story of TPP is likely to be its impact on global trade rules and standards (it’s a regional agreement, but it’s a big region and such standards can propogate). To understand how new standards will affect the financial services industry or the dairy sector, you need a pretty good understanding of how those sectors work. Ideally, you would want to contrast the new rules with the old and assess how the industry would reconfigure itself under the new regime.
 
This is tough to do and will take time. I spoke with one figure who is an industry leader and had previously read the text as a cleared adviser. I asked whether his industry would support the TPP or not. His answer: it’s too soon to tell. Even though he is an expert in the sector and had previously seen the text, he still needed his experts to comb through and conduct a more detailed analysis before he could take a stance.
 
So kudos to USTR for making the agreement so accessible. For those who work through the chapter summaries, there is an education to be had about how modern trade agreements and global commerce work. Just don’t expect sudden enlightenment about the TPP’s economic impact or political prospects. For that, we’ll have to wait for the expert analyses to dribble out. 

About

Phil Levy is senior fellow on the global economy at The Chicago Council on Global Affairs. Previously he was associate professor of business administration at the University of Virginia’s Darden School of Business. He was formerly a resident scholar at the American Enterprise Institute and taught at Columbia University’s School of International and Public Affairs. From 2003 to 2006, he served first as senior economist for trade for President Bush’s Council of Economic Advisers and then as a member of Secretary of State Rice’s Policy Planning Staff, covering international economic matters. Before working in government, he was a faculty member of Yale University’s Department of Economics for nine years and spent one of those as academic director of Yale’s Center for the Study of Globalization.

His academic writings have appeared in such outlets as The American Economic ReviewEconomic Journal, and theJournal of International Economics. He is a regular contributor to Foreign Policy magazine’s online Shadow Government section and writes on topics including trade policy, economic relations with China, and the European economic crisis. Dr. Levy has testified before the House Committee on Foreign Affairs, the Joint Economic Committee, the House Committee on Ways and Mean, and the US-China Economic and Security Review Commission. He received his PhD in Economics from Stanford University in 1994 and his AB in Economics from the University of Michigan in Ann Arbor in 1988.

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