A massive trade deal that would impact Indiana’s economy is in limbo.
President Obama and Congress are battling over the Trans-Pacific Partnership, which has been in the works for nearly a decade.
Some politicians and Hoosiers are questioning its implications.
What Is The Trans-Pacific Partnership?
But first, let’s explain what the Trans-Pacific Partnership is exactly.
The deal would establish trade rules for the twelve countries involved, including the United States, Australia, Japan, Malaysia, Peru, Vietnam, Brunei Darussalam, Canada, Chile, Mexico, New Zealand and Singapore – which encompass about 40 percent of the world’s Gross Domestic Product.
“It will be very beneficial, producing a level playing field for everyone, helping to protect intellectual property rights, also protecting investors,” says Indiana University Associate Business Professor Andreas Hauskrecht. “And, all those elements are very crucial for the United States looking in the future.”
[pullquote source=”Andreas Hauskrecht, IU Associate Business Professor”]It will be very beneficial, producing a level playing field for everyone.[/pullquote]
Obama wants Congress to give him the authority to negotiate the specifics of the partnership up until the end, then take an up or down vote on the without offering any amendments – something the president says has to happen in order for the deal to move forward.
“The problem is for this specific case there are twelve countries involved,” Hauskrecht says. “There are a lot of vested interests in every country. So, if you open up this negotiation process and made it accessible, there are so many opposing forces that they would try to boycott any further negotiation. That’s the reason why there is some secrecy in that.”
Earlier this week, the Senate voted against giving President Obama that “fast-track authority.”
Where Do Indiana Senators Stand On The Issue?
As NPR reports, sifting through the details of the partnership has proven difficult for some legislators:
For any senator who wants to study the draft TPP language, it has been made available in the basement of the Capitol, inside a secured, soundproof room. There, lawmakers surrender their cellphones and other mobile devices and sit under the watchful gaze of an official from the U.S. Trade Representative’s office while they peruse the pages. Any notes taken inside the room must be left in the room.
Only aides with high-level security clearances can accompany lawmakers. Members of Congress can’t ask outside industry experts or lawyers to analyze the language. They can’t talk to the public about what they read.
Several members of the president’s own party raised concerns about the partnership and voted against fast-tracking the process.
Sen. Joe Donnelly, D-Indiana, was one of them.
“When Hoosier workers lose nearly every time our country signs a new trade agreement, as a U.S. Senator, you don’t give up your ability to offer amendments to help our state’s businesses and workers,” Donnelly said in a statement. “You don’t give up your seat at the table. You fight for a better deal.”
Sen. Dan Coats, R-Indiana, supports the deal and voted in favor of fast-tracking the process.
“In Indiana, more trade means more jobs … Increasing international trade will bolster our economy, create new opportunities for American businesses and enhance our national security,” he said in a statement.
A compromise on the issue could be coming, although exactly what that looks like remains to be seen.
What Would The Partnership Mean For Indiana?
On a large farm in Danville, Ind., a small-town farmer is keeping a close eye on what’s happening in the big city of Washington, D.C.
David Hardin’s family has been farming in Central Indiana since 1827. They plant corn, soybeans, wheat and raise hogs.
A good portion of their product is sent overseas.
“The pigs that we raise on the farm, some of them are for domestic consumption,” Hardin says. “But, the packing plant that we sell to also sells a lot of pork to Japan.”
According to the Indiana Farm Bureau, Indiana ranks 8th in the value of agriculture exports in the country.
While farmers already have products in many of the markets included in the proposed partnership, the tariffs in those countries are high.
“TPP gives us an opportunity to reduce those tariffs, which will result in additional sales for our farm products in Indiana and we’ll feel the economic benefits here close to home,” says Indiana Farm Bureau National Policy Adviser Kyle Cline.
But, some unions are unhappy about the proposal, including United Food and Commercial Workers Local 75, which represents workers in several Midwest states including in Indiana
They say the partnership doesn’t provide environmental or employment protections and, therefore, could cost the U.S. jobs.
[pullquote source=”Brigid Kelly, UFCW Local 75 Public Relations Director”]It really can pull the floor out from underneath entire communities and that’s something we don’t want to see more of.[/pullquote]
“I think all throughout the Midwest we’ve seen what’s happened to our economy when good, manufacturing jobs go away,” says UFCW Local 75 Public Relations Director Brigid Kelly.
“It can really pull the floor out from underneath entire communities and that’s something we don’t want to see more of. We’d like to see reinvestment in good jobs. If you make it easier for companies to spend less and to offer fewer protections and benefits, then they’ll do so.”
But, IU professor Hauskrecht says there will always be winners and losers in trade deals. He says it’s important not to be short-sited when weighing the partnership, which he believes will greatly benefit the United States.
“I mentioned earlier that Japan will be part of the deal. And, Japan is hiding behind a lot of barriers in agriculture. Dairy products, for example,” he says. “So, those tariffs have to go down and this might be an opportunity for example also for Indiana farmers. At the same time, we will see also more competition in the automotive industry. So, this might, to a certain degree affect Indiana negatively.”
Then again, he adds Indiana is also improving its healthcare industry, so a partnership that creates more protections for patents would help pharmaceutical companies like Eli Lilly compete in the global economy.