31 Mar 2022


Trans Pacific Partnership Agreement and Trade Adjustment Assistance

Format: APA

Academic level: College

Paper type: Research Paper

Words: 1236

Pages: 5

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Trade agreements between different countries have been in existence for many years. Many people have debated on their positive and negative influence on the economic growth. In the contemporary world, nations have acquired and solidified their trade contracts through diverse actions. The relations range from colonial preferences, two-sided business treaties to wider regional arrangements. The relations among the participant countries have gone beyond the specified regions generating a worldwide trade landscape. International trade agreements have deepened the integration between countries enhancing the global economy. The essay will talk about the Trans Pacific Partnership Agreement (TPPA), and the Trade Adjustment Assistance (TAA) and their influence on the United States economy. 


Formerly known as Trans-Pacific Strategic Economic Partnership, the TPPA has grown to become one treaty that provides trade liberalization (Fergusson, 2010). The first countries to establish this agreement in 2003 included Singapore, Chile, and New Zealand. Brunei joined them in the late 2005, as well as the United States in 2008. The help of the former president and the Obama administration ensured the United States was engaged in a regional free tare negotiation especially in the Asia-Pacific regions via this agreement. By the start of 2015, many countries had joined the TPPA including Vietnam, Peru, Mexico, Japan, Malaysia, Canada, Australia, and Chile. The main purposes of this treaty included increased economic productivity, job creation and retention, promotion of innovation, enhancement of competition in the global market; reduce poverty levels, improvement of transparency, appropriate governance, and protection of natural resources. Moreover, the purposes were aimed at building strong economic and social relationships between the member countries.

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Five key features that placed a benchmark for the worldwide trade characterized the TPPA. First, there existed an all-inclusive market access. It meant that barriers to trades such as high tariffs were removed or lowered by a reasonable percentage. Therefore, all the goods, services, and investments contribute to the full range of trade thereby generating brand new opportunities for commerce, workers, and customers. The second feature is the regional approach to dedication. It aims at developing continuous supply chains, flawless trade, creating jobs, and conserving the environment. Additionally, such factors strengthen the regional relationships hence boosting the domestic markets. Thirdly, the agreement is committed to tackling emerging trade challenges .The fact that it promotes innovation enables the members to come up with new ideas and solutions to boost their respective economies. Some of the challenges the TPPA has addressed over the past few years include upcoming technologies, and the function of state-owned businesses in the international market (Williams, 2013). The fourth characteristic is inclusive trade where TPPA ensures that all businesses and economies profit from trading despite their sizes. Involved parties are encouraged to exploit their business ideas and support from the member governments is dispensed as per the agreement in place. The last feature of the agreement is regional amalgamation. The intention for its formation was to improve trade relation beyond the Asia-Pacific region. Its scope is wide because it covers a wide range of trade and trade related concerns as well as unifying the diverse countries. 

In 2014, the US Trade Representative Michael Froman stated that TPPA is strong economically because it combines over forty percent of the worldwide GDP, and strategically because it enables the US to work in close proximity with many countries. One of the significance of TPP to the United States economy is that it is considered one of the architects for the international economy and world trade. The United States still remain the super power in the engagement of leadership among the member countries. The US is known as the “pivot” for the Asian countries in the treaty. Being a member country to the agreement it leads in the formulation of trade rules thereby making it and the other trans-pacific countries ready to face economic challenges brought by globalisation. The founders of the agreement believed that this would ensure the continuity of the World Trade Organization after the Doha rounds stagnated. 


The year 1934 marked the nature of trade in the United States from protectionism to liberalization when the Reciprocal Trade Agreement Act (RTAA) was established. The RTAA was considered an effective trade policy with extensive national gain, however, political forces debated its costs and how this affected the entire region. The legislation argued in terms of higher tariffs since the domestic companies were endangered by the state of imports. The arising conflict between the legislation and the congress prompted the latter to take on a different approach through establishing trade adjustment assistance (TAA) in 1962. The main aim of this treaty was to carter for the domestic firms and workers affected by the RTAA. To date, the agreement still remains a controversy but is a long lasting pathway for the trade policies that came later. 

The first authorization of TAA put two programmes into consideration that included protecting workers through replacement of allowances and unmitigated employment benefits, and covering for firms through loans and tax benefits. Consequently, the US congress included the communities’ programmes that covered for loans and grants. Three different federal agencies manage all the TAA agendas even though they are defined in one bill (Hornbeck, 2012).

Many people view the TAA as a platform that helps individuals who lack jobs due to intense competition from foreign trade. The main programme goals for its establishment included the speedy employment for eligible individuals, provision of training and income sustainability for employees, and getting reemployment in better areas than before. The trade adjustment assistance works in a number of ways. When a member is laid off from work, they must file a petition in a year’s time to separate from the act. The department of legislation and the respective governor investigates into the matter. A certificate for denial is later issued and the worker has to wait for two more years until the end of the petition. It is fundamental to note that certification is only offered to those who have suffered job loss because of heightened imports or shifts outside the United States. Also, workers working in a supplier or downstream company are qualified for certification. 

The benefits and services for workers who are certified vary. Under the trade act, they include training, trade readjustment allowances, relocation allowances, job search opportunities, health insurance tax credit, and TAA wage financial assistance. Workers who have lost their jobs have the benefits of getting different types of training ranging from occupational, customized, to remedial education. These types of training enhance one’s competitiveness for reemployment. 

Since its establishment, TAA received major support from labour groups that advocated for trade liberalizations. However, in 1971, there was an imbalance of trade in the United States and deficits realized. The foreign competition grew fast and majority of the citizens lost their jobs. Many labour organizations withdrew their support of the TAA as the criteria for eligibility became hard to meet. The multiple step procedures to get a certificate was expensive and took over one year to complete. 


In my opinion, the TPPA has more economic advantages to the United States as compared to the TAA. Fist, TPPA is capable of trudging forward at a relatively more fruitful rate because the members concerned are self-chosen and are conscious of the high values of trade liberalisations that are expected of the members. Also, TPPA covers a broad range of factors that the TAA do not cover. For instance, the scope of TPPA extends up to environmental conservation and innovativeness. Usually, it is known that the backbone of an economy depends on its natural resources; therefore, having an agreement that ensures the sustainability of the environment is a boost for the economy of a country. Moreover, the processes involved in the application for eligibility in TAA is time consuming and costly. Even though the trade act carters for affected workers and firms, it demands for multiple steps for one to get certification. The time lapse might contribute to the fall in an economy since many people will be left jobless and this reduces economic productivity for the United States. Finally, TPP is suitable for the United States economy because it is not a free trade treaty but a requisite global management system. Unlike TAA, which is a domestic legislation, TPPA has no conclusion date. 


Fergusson, I. F. (2010). Trans-Pacific Partnership Agreement . DIANE Publishing.

Hornbeck, J. F. (2012). Trade Adjustment Assistance (TAA) and Its Role in US Trade Policy . DIANE Publishing.

Williams, B. R. (2013). Trans-Pacific Partnership (TPP) countries: Comparative trade and economic analysis.

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