Skip to content

Better than NAFTA: TPA Is a 21st Century Approach to Trade

June 04, 2015

TPA requires that U.S. negotiators go beyond NAFTA to achieve trade agreements beneficial for the U.S. economy and our national security by meeting expansive, 21st century negotiating objectives.

Agriculture: Updated provisions seek robust and enforceable rules on sanitary and phytosanitary measures and address improper use of geographical indications. We are seeking new agricultural access into the markets of our NAFTA trading partners that we could not secure through NAFTA.

Services: An expanded TPA negotiating objective makes clear that trade agreements must address barriers not only for existing services but also new services. Through TPP, we will gain improved market access into our NAFTA trading partners that we could not secure through NAFTA.

Intellectual Property: TPA calls for trade agreements to provide a standard of IP protection similar to the high standard found in U.S. law and to provide for strong protection for new and emerging technologies. Intellectual property protections in TPA have significantly expanded from the basic provisions included in NAFTA, including taking into account the development of the Internet.

State-Owned Enterprises (SOEs): For the first time, TPA includes a new negotiating objective that seeks the elimination of trade distortions and unfair competition by SOEs and ensures that they act based solely on commercial considerations. These provisions will be included in TPP for the first time and were not included in NAFTA.

Rule of Law, Capacity Building, and Human Rights: TPA includes a new principle negotiating objective aimed to ensure trading partners’ implementation of trade commitments to strengthen good governance, transparency, legal regimes, and rule of law, which promote respect for internationally recognized human rights and create more open democratic societies. These provisions have significantly expanded since NAFTA.

Currency: TPA includes a principle negotiating objective for the first time that directs the Administration to seek provisions to address the manipulation of exchange rates by trading partners and to use tools such as enforceable rules, transparency, reporting, monitoring, cooperative mechanism, or other means, as appropriate, to address such manipulation. This wasn’t contemplated in NAFTA.

Labor/Environment: TPA requires other countries to raise their labor and environment standards to be comparable to U.S. law, so that U.S. companies and workers can be competitive. Specifically, TPA requires trading partners to adopt and maintain measures implementing internationally recognized core labor standards and their obligations under multilateral environmental agreements and to effectively enforce their labor and environment laws, and it prohibits waiver or derogation from labor/environmental standards in a manner affecting trade or investment. These obligations are fully enforceable, on par with all other obligations. In NAFTA, labor and environment issues were handled in a side letter, and the obligations were not fully enforceable, so making these obligations enforceable as part of the agreement will help U.S. companies and workers stay competitive.

Localization Barriers to Trade: A new TPA negotiating objective calls for eliminating and preventing measures that require U.S. producers and service providers to locate facilities, intellectual property, or other assets in a country as a market access or investment condition, including indigenous innovation measures. These provisions were not included in NAFTA.

Cross-Border Data Flows: New provisions in TPA direct trade negotiators to ensure that governments allow cross-border data flows and do not require local storage or processing of data. These requirements were not included in NAFTA.

Regulatory Practices: TPA directs the administration to seek new and updated provisions aimed to improve regulatory practice, regulatory coherence and compatibility, and stronger transparency in regulations and standards-development. These types of provisions were not included in NAFTA.

Global Value Chains: The importance of global value chains has increased significantly since NAFTA was negotiated. Several new provisions in TPA address the ability of U.S. firms to participate in global value chains and ensure that trade agreements reflect the increasingly interrelated and multi-sectoral nature of trade and investment activity. These issues are being actively negotiated in TPP, but were not similarly included in NAFTA.