Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis

Brock R. Williams
Analyst in International Trade and Finance

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) among 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. The negotiating partners have expressed an interest in allowing this proposed “living agreement” to cover new trade topics and to include new members that are willing to adopt the proposed agreement’s high standards. Japan is the most recent country to seek entry into the TPP. The Administration gave Congress notice of its intent to negotiate with Japan in the TPP on April 24, 2013.

The TPP negotiations have been of significant interest to Congress. Congressional involvement includes consultations with U.S. negotiators on and oversight of the details of the negotiations, and eventual consideration of legislation to implement the final trade agreement. In assessing the TPP negotiations, Members may be interested in understanding the potential economic impact and significance of TPP and the economic characteristics of the other TPP countries as they evaluate the potential impact of the proposed TPP on the U.S. economy and the commercial opportunities for expansion into TPP markets.

This report provides a comparative economic analysis of the TPP countries and their economic relations with the United States. It suggests that the TPP negotiating partners encompass great diversity in population, economic development, and trade and investment patterns with the United States. This economic diversity and inclusion of fast-growing emerging markets presents both opportunities and challenges for the United States in achieving a comprehensive and high standard regional FTA among TPP countries.

The proposed TPP and its potential expansion are important due to the economic significance of the Asia-Pacific region for both the United States and the world. The region is home to 40% of the world’s population, produces nearly 60% of global GDP, and includes some of the fastestgrowing economies in the world. Including Canada, Mexico, and Japan, TPP negotiating partners made up 40% of U.S. goods trade in 2012, and the Asia-Pacific economies as a whole made up over 62%. The TPP would be the largest U.S. FTA to date by trade value.

The United States is the largest TPP market in terms of both GDP and population. In 2012, non- U.S. TPP partners collectively had a GDP of $11.9 trillion, just over 75% of the U.S. level, and a population of 478 million, about 50% larger than the U.S. population. Japan’s entry (pop. 128 million and GDP $6 trillion) increases the significance of the agreement on both these metrics.

Unlike most previous U.S. FTA negotiations, the TPP involves countries with which the United States already has an FTA. The United States has FTAs in place with Australia, Canada, Chile, Mexico, Peru, and Singapore, which together account for over 80% of U.S. goods trade with TPP countries. Japan is by far the largest U.S. trade partner among TPP members without an existing U.S. FTA.


Date of Report: June 10, 2013
Number of Pages: 39
Order Number: R42344
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Bangladesh Apparel Factory Collapse: Background in Brief

Mary Jane Bolle
Specialist in International Trade and Finance

The April 24, 2013, collapse of an eight-story garment factory, called Rana Plaza, in Dhaka, Bangladesh, resulted in the deaths of more than 1,100 workers. It is reportedly now considered the deadliest accident in the history of the apparel industry. Congress has had a long-standing interest in supporting internationally recognized worker rights in developing countries, and the building collapse has raised concerns about worker conditions in Bangladesh.

Rana Plaza was allegedly structurally unsound and poorly maintained for apparel production. Apparel production is generally known as an industry under threat of fire, and one where workers need easy access to rapid escape routes. Issues relating to workers’ inability to effectively exercise their rights to organize, bargain collectively, and work in a safe workplace may have contributed to the tragedy. For example, workers reportedly noticed cracks in the building and resisted entering, and were told that if they did not report to their jobs, they would not be paid. The factory collapse brought international focus to those parts of global supply chains that may not meet basic safety and health standards.

The U.S. government supports internationally recognized worker rights through various policies and programs. These include U.S. trade preference programs, free trade agreements, foreign assistance, and Department of Labor initiatives.

Congressional and U.S. efforts in this regard are part of an international worker rights support structure in place to offer technical assistance and support to countries—especially developing countries. Other major parts of this structure include international organizations, such as the International Labor Organization (ILO), founded in 1919; and corporate codes of conduct, which have arisen from a broader movement of corporate social responsibility that gained strength in the 1980s and 1990s.

Early analysis of the causes of the Bangladesh tragedy raises questions about what went wrong and about what can be done to help Bangladesh to improve working conditions at factories. Efforts to make changes in Bangladesh are already underway, and developments on this issue are evolving.

This report provides an overview of the recent tragedy in Bangladesh and the Bangladesh economic environment and culture. It also notes the responses to the tragedy, to date, from Congress, the Administration, the ILO, the Bangladesh government, and the private sector. Finally, it raises some possible issues for Congress.


Date of Report: June 14, 2013
Number of Pages: 14
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Trade Reorganization: Overview and Issues for Congress

Shayerah Ilias Akhtar
Specialist in International Trade and Finance

On January 13, 2012, President Obama asked Congress for authority to reorganize and consolidate, into one department, the business- and trade-related functions of six federal entities: Department of Commerce; Export-Import Bank (Ex-Im Bank); Overseas Private Investment Corporation (OPIC); Small Business Administration (SBA); Trade and Development Agency (TDA); and Office of the United States Trade Representative (USTR). Bills based on the proposal were introduced in the 112th Congress. The President reiterated the proposal in his FY2014 budget request, and he may resubmit his request for reorganizational authority in the 113th Congress. U.S. policymakers’ interest in the organizational structure of U.S. government trade functions has grown in recent years, stimulated by federal efforts to promote U.S. exports and employment, as well as national debates on reducing federal spending and the size of the U.S. government.

Reorganization has been a recurring theme in U.S. trade policy. Over the past several decades, Congress, successive Administrations, and other stakeholders have crafted and debated proposals to reorganize the trade functions and structure of the federal government in order to enhance the effectiveness of U.S. trade policy and promotion efforts; improve U.S. trade policy coordination; avoid duplication of functions and activities; boost the international competitiveness of U.S. industries; and for other reasons. Previous proposals have called for a range of actions, including consolidation of all U.S. export- or trade-related programs under one federal agency (such as a “Department of Trade”) to provide a “one-stop-shop” for the trade community; termination or transfer of functions of departments and agencies considered to be duplicative or unnecessary to U.S. trade policy priorities; and strengthening coordination of federal trade-related agencies.

Debates about the U.S. trade policy structure raise the question of whether reorganization would enhance the effectiveness of U.S. trade policy or merely result in bureaucratic reshuffling. On one hand, proponents of reorganization proposals believe that they may eliminate duplication of federal trade functions, provide a more streamlined organizational structure for U.S. trade-related activities and policy based on more clearly defined goals and priorities, and reduce overall government costs. They argue that federal trade policy efforts could be enhanced through a more centralized government body. On the other hand, critics contend that such proposals could result in the creation of a large, costly federal bureaucracy, possibly making certain trade functions and agencies less effective if they are subsumed in a larger bureaucracy. They also assert that the diffusion of trade functions across the federal government helps to advance various aspects of U.S. trade policy, and express concern that a “one-stop” federal source may not be responsive to the unique needs of certain types of exporters. Furthermore, some contend that, while changes to U.S. trade policy—and by extension the policymaking structure—may benefit individual U.S. businesses and workers in the short-run, they have little influence in the long-run on U.S. export and employment levels and trade balances, which relate more closely to macroeconomic factors.

Congress would play a significant role in a trade reorganization debate through its legislative and oversight responsibilities; it could engage in consultations with the Administration, hold hearings, grant reorganizational authority to the President, and/or introduce and enact trade reorganization legislation separate from the President’s plan. In addition to considering possible reorganizational authority for the executive branch, Congress could consider policy alternatives such as to maintain the current trade organizational structure, privatize or terminate certain trade functions, strengthen or revise existing coordination of trade functions, or create a trade reorganization commission to examine the issue further.


Date of Report: June 6, 2013
Number of Pages: 35
Order Number: R42555
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U.S. Direct Investment Abroad: Trends and Current Issues

James K. Jackson
Specialist in International Trade and Finance

The United States is the largest investor abroad and the largest recipient of direct investment in the world. For some Americans, the national gains attributed to investing overseas are offset by such perceived losses as displaced U.S. workers and lower wages. Some observers believe U.S. firms invest abroad to avoid U.S. labor unions or high U.S. wages, however, 70% of U.S. foreign direct investment is concentrated in high income developed countries. Even more striking is the fact that the share of investment going to developing countries has fallen in recent years. Most economists conclude that direct investment abroad does not lead to fewer jobs or lower incomes overall for Americans and that the majority of jobs lost among U.S. manufacturing firms over the past decade reflect a broad restructuring of U.S. manufacturing industries.


Date of Report: May 17, 2013
Number of Pages: 10
Order Number: RS21118
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Bangladesh Apparel Factory Collapse: Background in Brief

Mary Jane Bolle
Specialist in International Trade and Finance

The April 24, 2013, collapse of an eight-story garment factory, called Rana Plaza, in Dhaka, Bangladesh, resulted in the deaths of more than 1,100 workers. It is reportedly now considered the deadliest accident in the history of the apparel industry. Congress has had a long-standing interest in supporting internationally recognized worker rights in developing countries, and the building collapse has raised concerns about worker conditions in Bangladesh.

Rana Plaza was allegedly structurally unsound and poorly maintained for apparel production. Apparel production is generally known as an industry under threat of fire, and one where workers need easy access to rapid escape routes. Issues relating to workers’ inability to effectively exercise their rights to organize, bargain collectively, and work in a safe workplace may have contributed to the tragedy. For example, workers reportedly noticed cracks in the building and resisted entering, and were told that if they did not report to their jobs, they would not be paid. The factory collapse brought international focus to those parts of global supply chains that may not meet basic safety and health standards.

The U.S. government supports internationally recognized worker rights through various policies and programs. These include U.S. trade preference programs, free trade agreements, foreign assistance, and Department of Labor initiatives.

Congressional and U.S. efforts in this regard are part of an international worker rights support structure in place to offer technical assistance and support to countries—especially developing countries. Other major parts of this structure include international organizations, such as the International Labor Organization (ILO), founded in 1919; and corporate codes of conduct, which have arisen from a broader movement of corporate social responsibility that gained strength in the 1980s and 1990s.

Early analysis of the causes of the Bangladesh tragedy raises questions about what went wrong and about what can be done to help Bangladesh to improve working conditions at factories. Efforts to make changes in Bangladesh are already underway, and developments on this issue are evolving.

This report provides an overview of the recent tragedy in Bangladesh and the Bangladesh economic environment and culture. It also notes the responses to the tragedy, to date, from Congress, the Administration, the ILO, the Bangladesh government, and the private sector. Finally, it raises some possible issues for Congress.


Date of Report: May 23, 2013
Number of Pages: 13
Order Number: R43085
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