garnered support on both sides of the aisle. Much of the current sentiment formed of the TPP comes from research of the development of the predecessor of this agreement: the General Agreement on Tariffs and Trade, which is commonly known today as the World Trade Organization (WTO). The slow negotiations of the WTO in the Uruguay Round and Doha Round has led to a power struggle between superpowers such as China, Russia, and the U.S. over influence within developing bilateral and regional trade agreements. As a result of the stale nature of large multilateral agreement negotiations such as the WTO, more regional free trade agreements are expected to be enacted before any large free trade agreements can be agreed upon based on Richard Baldwin’s
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These warnings of detrimental effects associated with high trade deficits can be challenged through the outcome of the 1997 Asia crisis. In that crisis, the world markets were sent into shock as multiple currencies in key Asian markets crashed due to speculative investment strategies (Carson and Clark). The U.S. Senate Finance Committee’s hearing on the Causes of the Trade Deficit and its Implications for the U.S. Economy following the 1997 Asia crisis demonstrated the divide among economists on the effects of currency devaluations and subsequent increases in trade deficits. Daniel Griswold of the Cato Institute argued in that hearing that “while the deficit has expanded, so have American payroll.” Following years of uncertainty in world markets, U.S. domestic production and employment suffered relatively little compared to previous forecasts even when faced with the growth of imports and the loss of demand for exports (Harrigan). In his report on the effects of the 1997 Asia crisis, James Harrigan argued that this outcome demonstrated that while America was increasingly exposed to international shocks, the domestic economy had internal mechanisms to counter the detrimental effects of these shocks. Likewise, the Institute for International Economics observed that “trade deficit widens when U.S. growth is good and job opportunities abound, and it shrinks when an economic slowdown occurs and the unemployment rate rises” (“How Does T¬¬rade…”). Regardless of the effects created by trade deficits following the enactment of the TPP, changes in trade policy and the developments in geopolitical relationships will provide the bulk of the changes incurred through the free trade
These warnings of detrimental effects associated with high trade deficits can be challenged through the outcome of the 1997 Asia crisis. In that crisis, the world markets were sent into shock as multiple currencies in key Asian markets crashed due to speculative investment strategies (Carson and Clark). The U.S. Senate Finance Committee’s hearing on the Causes of the Trade Deficit and its Implications for the U.S. Economy following the 1997 Asia crisis demonstrated the divide among economists on the effects of currency devaluations and subsequent increases in trade deficits. Daniel Griswold of the Cato Institute argued in that hearing that “while the deficit has expanded, so have American payroll.” Following years of uncertainty in world markets, U.S. domestic production and employment suffered relatively little compared to previous forecasts even when faced with the growth of imports and the loss of demand for exports (Harrigan). In his report on the effects of the 1997 Asia crisis, James Harrigan argued that this outcome demonstrated that while America was increasingly exposed to international shocks, the domestic economy had internal mechanisms to counter the detrimental effects of these shocks. Likewise, the Institute for International Economics observed that “trade deficit widens when U.S. growth is good and job opportunities abound, and it shrinks when an economic slowdown occurs and the unemployment rate rises” (“How Does T¬¬rade…”). Regardless of the effects created by trade deficits following the enactment of the TPP, changes in trade policy and the developments in geopolitical relationships will provide the bulk of the changes incurred through the free trade