The Nexus of Development and Trade in the Trans-Pacific Partnership

December 4, 2015 By David Stein

The Trans-Pacific Partnership trade deal is the first U.S. trade deal with a chapter exclusively focused on development. This suggests that the old “trade vs. aid” debate is finally over, and that there is wide support for “trade and aid.” Today, most experts agree that foreign assistance creates the enabling environment for trade to flourish by strengthening the rule of law, fighting corruption, and creating a climate that is attractive to foreign investment.

When read closely, it is striking how similar the chapter in the final text of the Trans-Pacific Partnership (TPP) is to America’s own development priorities. For example, TPP encourages:

  • “Programs aimed at helping women build their skills and capacity, and enhance their access to markets, technology and financing.”
  • “Consideration of ways to… foster the application of innovative uses of science and technology [to] promote development.”
  • “Facilitation of public and private sector partnerships that enable private enterprises… to bring their expertise and resources to cooperative ventures with government agencies in support of development goals.”

TPP also includes a chapter on cooperation and capacity building, which lists the “promotion of education… and gender equality;” “disaster risk management;” and agricultural as potential areas for improvement.

In practical terms, TPP’s development and capacity building chapters establish permanent committees to “help ensure that the Agreement’s developing-country Parties can take full advantage of the opportunities TPP creates for development and poverty reduction,” and to “identify and review areas for potential cooperative or capacity building efforts.”

Outside of these chapters, TPP also includes rules that promote transparent and accountable governance, as well as anti-corruption efforts, which are critical building blocks for sustainable development.

TPP has sparked a lively debate in the development community. Some have argued that TPP does not do enough to promote sustainable economic growth in developing countries. These critics say that much of the language in the development chapter is symbolic, and that merely acknowledging the importance of development – and establishing committees to talk about it – is not enough.

While questions about implementation are essential, it is encouraging that an agreement of this magnitude – encompassing more than 40 percent of global GDP – recognizes the “importance of development in promoting inclusive economic growth.” Against the backdrop of the new Sustainable Development Goals, one can only hope that this recognition leads to results.

Photo: President Barack Obama attends a meeting with the Trans-Pacific Partnership at the APEC summit in Honolulu, Hawaii, Saturday, Nov. 12, 2011. Source: White House Archives, Pete Souza