Skip to navigationSkip to content

Ideas

Our home for bold arguments and big thinkers.

Barack Obama TPP
Reuters/Kevin Lamarque
Let’s put it this way.
EXPLAINER-IN-CHIEF

What is the TPP? President Obama explains it in laymen’s terms

This question originally appeared on Quora: What is the Trans-Pacific Partnership (TPP) in layman’s terms? Answer by Barack Obama, President of the United States.

The TPP is the Trans-Pacific Partnership—a trade agreement that puts American workers first and makes sure we write the rules of the road for trade in the 21st Century. It’s an agreement between the United States and 11 other countries in the Asia-Pacific region: Canada, Mexico, Peru, Chile, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, and New Zealand.

Here’s what makes TPP the most ambitious trade agreement in American history. First, it’s huge: TPP covers nearly 40 percent of global economic output and one-third of all global trade. Second, it’s an agreement that does trade the right way: TPP demands the highest standards for fair competition and protections for workers, the environment, and innovation of any trade deal in history. And third, TPP represents a crossroads for American leadership in an essential region for our future—the gap between passing TPP and failing to do so couldn’t be more stark.

With TPP, we’ll eliminate more than 18,000 taxes that other countries currently put on American-made goods, which will give our exports a boost. And that’s important because businesses that export abroad pay higher-than-average wages here at home.

With TPP, we’ll finally have the first trade agreement that reflects the realities of the digital age by protecting a free and open Internet and preventing unfair rules that restrict the free flow of data.

With TPP, the countries we trade with will adopt the strongest labor and environmental standards of any trade agreement in history. That means requiring a minimum wage, putting in place worker safety regulations, and prohibiting forced labor and child labor. It also means cracking down on illegal wildlife trafficking, illegal fishing, and illegal logging in one of the most biologically diverse regions of the world.

But without TPP, these countries can keep taxing American goods, restricting the Internet, and undercutting American workers by paying lower wages and setting lower standards.

For example, if you work on an auto assembly line in Ohio, the cars you build face taxes—called tariffs—as high as 30 percent when they’re imported into Malaysia and 70 percent in Vietnam, not to mention a thicket of unfair rules that add costs and create hurdles in places like Japan. Likewise, if you’re a small business owner in Oregon, you might face obscure and confusing customs rules that make it difficult to sell your products to customers abroad.

That’s not the kind of deal we want in the region that’s on its way to becoming the most populous and lucrative market on the planet. That’s why TPP addresses all these issues head-on, slashing barriers and rewriting rules so that our workers and businesses get the fair shot they deserve. And here’s the thing: With TPP, unlike in past agreements, these rules are fully enforceable. So if a country fails to live up to these standards, we can bring trade sanctions against them. That’s how we make sure they’re dealing fairly.

I know past trade agreements haven’t always lived up to the hype. That’s why we spent the better part of a decade—eight years total—negotiating this one to get it right. It’s a deal that protects American workers and businesses—and puts our values first.

But you don’t have to take my word for it. You can learn more about the agreement here, with explanations on what each chapter of the agreement will do.

You can follow Quora on Twitter, Facebook, and Google+.

Subscribe to the Daily Brief, our morning email with news and insights you need to understand our changing world.