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News Tip: Trans-Pacific Partnership Could Penalize East Coast Businesses, Expert Says

The United States and 11 other countries agreed Monday to the terms of the Trans-Pacific Partnership

The United States and 11 other countries agreed Monday to the terms of the Trans-Pacific Partnership (TPP), the largest regional trade agreement in history. The trade partnership still faces congressional approval and will likely become a hotly debated topic in the 2016 presidential race. Duke Law professor Rachel Brewster says regional agreements like the TPP can spur trade in some areas, but penalize U.S. businesses that focus on regions outside the scope of the agreement.•    Quotes: "The United States is negotiating regional trade agreements like the TPP and Transatlantic Trade and Investment Partnership (TTIP) to engage the major markets to our east and west," says Duke law professor Rachel Brewster. "The U.S. is essentially forced into these separate regional negotiations because global trade negotiations at the World Trade Organization have been stagnant for well over a decade. WTO rules allow such regional agreements -- but they come at a cost.""By establishing preferences for some states over others, the benefits of liberalization are limited to the members of the new group and exclude many of the U.S.' traditional allies. In addition, the TTP may disrupt established relationships with companies from excluded states. This is particularly problematic for businesses on the East Coast that are more likely to have supply chains outside of the Pacific Partnership countries. For these U.S. businesses, manufacturing costs will not rise but they will not see the decrease in tariff levels that Pacific-oriented supply chain producers will experience, and thus their relative competitiveness in the U.S. market and global markets may suffer."

•    Bio:Rachel Brewster, a professor of law at Duke University's School of Law, specializes in international trade and international economic law. https://law.duke.edu/fac/brewster/

•    For additional comment, contact Rachel Brewster at:(919) 613-7213; brewster@law.duke.edu