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Q&A with economics professor Michael Walden on pulling out of the Trans-Pacific Partnership

Michael Walden

Michael Walden

The Daily Tar Heel: What is the Trans-Pacific Partnership?

Michael Walden: It is a trade agreement between the United States and several East Asian countries — excluding China, by the way ... Like previous trade agreements, the notion is that countries have different areas of expertise. The world benefits if we take what each country can do best and let them trade.

DTH: Why is this relevant to our country right now?

MW: The Obama administration had a foreign policy of looking more toward Asia, so this fit into that. It’s relevant now obviously because President Trump takes a different attitude toward trade. He’s focused more on the downsides of trade — which there are. For example, North Carolina largely lost its textile and apparel industries because of NAFTA and (the General Agreement on Tariffs and Trade). So, he signed an executive order saying that the previous agreement that the United States had to participate in, TPP, that we weren’t going to do that.

DTH: What does this mean for our country politically?

MW: The new president has said that (TPP) is going to be a focus of his administration. He’s argued that the trade deals have not helped everyone in the country and I think there’s an agreement there — they haven’t. He wants to examine those trade deals, renegotiate them. He’s talked already about renegotiating NAFTA, which is a trade deal between Canada, the United States and Mexico. Actually, the Canadians and the Mexicans have said they’re willing to at least consider that. So, I think it’s a flip from what had really been an agreement among Democrats and Republicans since World War II, that more international trade is good.

DTH: What does this mean economically?

MW: (The state’s) estimated agriculture probably would have gained from TPP. Agriculture is a major industry in North Carolina. So, we potentially could have sold more of our agricultural output to those Asian countries. On the other hand, though, the estimates are that textile and apparel, which is much, much reduced in its importance in North Carolina than it used to be — but it’s still important — would have been hurt. So, you have trade-offs. I think that’s what President Trump wants to emphasize: We’ve focused more on who wins, we haven’t considered as much who loses. But it’s not going to move the economic needle that much.

DTH: Any other information?

MW: Trade deals have been very important in North Carolina for positive and negative reasons. Clearly, an area like (the Research Triangle), with pharmaceuticals and technology and instruments— we’ve benefited from trade. We’ve been able to increase our exports out of Raleigh and out of Charlotte. But a lot of the rural areas of North Carolina have lost. So, I think this is a good conversation to have.

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