Business
Supporters of Trans Pacific Partnership:
The Trans Pacific Partnership (TPP) is originally being a concept to create a free trade zone amount the members of the Trans Pacific Partnership Contract. It is a contract between the countries which binds the countries to perform the business in the state and the individual level according to the contract or the principles. At the moment there are twelve active members, including the United States of America, Australia and Malaysia. (Tamny, 2016)
The supporters of Trans Pacific Partnership Contracts say that the by signing the contract, one country opens the home market for the products of the other country at the cheaper rates. For example, if the cars are expensive in one country as compared to the other country, then the imports of the cars or the spare parts will reduce the prices in the home country. (Tamny, 2016)
The reduction in the prices of the products will assist the low wage workers in the home country and ultimately it will improve the living standards of the importers and the exporters. Another advantage of the Trans Pacific Partnership Contract is that the production costs in the countries like Vietnam are lower than the production cost in the countries like Australia. In this case, the businesses in the Vietnam will have the opportunity to sell their products in the big markets like the United Stated, Japan, Malaysia and Australia. (Tamny, 2016)
For example, the products manufactured in Asian countries can be exported to the South American countries such as Peru. Similarly, the consumable products of Peru can be imported by the Asian countries. (Kasperkevic, 2015)
Opposition of Trans Pacific Partnership:
As compared to the supporters, the opposing side of the Trans Pacific Partnership has their own concerns. The first concern is that the businesses that are registered in the member countries will be allowed to open their branch or overseas office in wealthier countries such as the United States and Australia. This business tactic will allow the members of Trans Pacific Partnership to challenge the taxes in the United States or any other country, due to the relaxations in the contract. (Moberg, 2015)
The opposition party argues that the contract between the countries varies from country to country and there are no standard rules or principles of the Trans Pacific Partnership. In these circumstances, it is highly probable that the home country will suffer the reduction in the tax incomes and at the same they will lose the wealth and market share of the home products. (Moberg, 2015)
Another disadvantage of the Trans Pacific Partnership is that it is highly probable the member countries will lose the manufacturing industries or the skilled labor due to the unfair balance of the trade. The contract between the countries is hidden in most of the cases and due to this secrecy; the businesses in one country lose their own industry due to the clauses of the contract. (Moberg, 2015)
For example, the most of the Americans are working in the manufacturing industries and if the company starts to import the products from the member countries at the lower rates, then it is highly probable that the skilled labor in the United States of America will lose their jobs. Importing will increase the profits of the companies; however, it will affect the unemployment rate in the home country as well. Therefore, it is very important to maintain the balance of trade at the reasonable level. (Moberg, 2015)
The opposition of the Trans Pacific Partnership also argues that in the contract of the Trans Pacific Partnership, there is no indication of the environmental accounting and other climate change issues. (Amadeo, 2015)
In the current development in the accounting standards and the ethical issues of the businesses, it is very important for the businesses to account for the damages caused to the environment due to the production of the products. Therefore, the critics are pointing this issue as the great disadvantage of the Trans Pacific Partnership Contracts. (Amadeo, 2015)
Another main concern for the critics of Trans Pacific Partnership is that the prices of the life saving drugs and the consumable goods will increase in the countries like the United States. In the United States of America, the prices of food and the medicines are always in the reach of the common citizens and the authorities always keeping the supply in control. (Amadeo, 2015)
In the case of Trans Pacific Partnership, the member countries such as Peru, Malaysia, Japan and Fiji will order the medicines at the reasonable large quantity. (Amadeo, 2015)
The relaxations in the Trans Pacific Partnership contract can allow these countries to disturb the balance of supply and demand in the United States of America. Therefore, the prices of the medicines will increase in the United States of America. It is very important for the governments to restrict the exports of the important products to maintain the balance of supply and prices for the citizens of the home country. (Amadeo, 2015)
Impact on Wages:
The Trans Pacific Partnership can affect the wages of the worker in positive ways as well as in the negative way. The first positive effect on the wages will be that the workers of the poor countries will get the opportunity to work in the member countries. (Bivens, 2015)
Moreover, due to the approach in the foreign markets, the businesses will increase their sales and ultimately it will cause an increase in the wage rates in the poor countries. (Bivens, 2015)
The main disadvantage of the Trans Pacific Partnership is that it is highly probable that the companies working in the high wage rate countries will outsource the labor in the low wage rate countries to take advantage of the lowest wage rates. This tactic is unethical and it is the one of the main concerns of the opposition of the Trans Pacific Partnership. (Bivens, 2015)
For example, the telecom companies can hire staff in the low wage rate country to outsource their complain center or the help line center. There is a huge difference between the professionals in Australia and the Malaysia. Therefore, it is possible that the telecom company in the Australia can hire the engineers in the Malaysia at lower rates and outsource the entire help center in another country. (Bivens, 2015)
This tactic will increase the unemployment of the professionals in the home country. Furthermore, the countries like United Stated and Canada is already facing the competition from the China in their own local markets. In these circumstances, the entry of other pacific countries will impact negatively on the local industry of America, Canada and Mexico. (Bivens, 2015)
Work Cited
Tamny, John. "Why All Americans Should Support the Trans-Pacific Partnership." Reason.com.
09 Feb. 2016. Web. 20 Apr. 2016. <http://reason.com/archives/2016/02/09/why-all-americans-should-support-the-tra>.
Kasperkevic, Jana. "TPP or Not TPP? What's the Trans-Pacific Partnership and Should We
Support It?" The Guardian. Guardian News and Media, 05 Oct. 2015. Web. 20 Apr. 2016. <http://www.theguardian.com/business/2015/oct/05/tpp-or-not-tpp-whats-the-trans-pacific-partnership-and-should-we-support-it>.
Moberg, David. "8 Terrible Things About the Trans-Pacific Partnership." - In These Times. 16
Dec. 2015. Web. 20 Apr. 2016. <http://inthesetimes.com/article/18695/TPP_Free-Trade_Globalization_Obama>.
Amadeo, Kimberly. "12 Countries Agreed to the World's Biggest Trade Deal." About.com News
& Issues. 8 Feb. 2015. Web. 20 Apr. 2016. <http://useconomy.about.com/od/Trade-Agreements/fl/What-Is-the-Trans-Pacific-Partnership.htm>.
Bivens, Josh. "The Trans-Pacific Partnership Is Unlikely to Be a Good Deal for American
Workers." Economic Policy Institute. 16 Apr. 2015. Web. 20 Apr. 2016. <http://www.epi.org/publication/tpp-unlikely-to-be-good-deal-for-american-workers/>.
