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The Case for the TPP

STANFORD – Following the conclusion of the Trans-Pacific Partnership by 12 Pacific Rim countries, debates about the costs and benefits of trade liberalization are intensifying. The early leaders in the United States’ presidential campaign, both the Republican Donald Trump and the Democrat Hillary Clinton, have expressed opposition to the TPP, though as Secretary of State, Clinton called it the “the gold standard of trade deals.”

The right level of trade openness is not a new debate. Historically, trade systems have ranged from rather open to severely restricted by rules, tariffs, or non-tariff barriers, driven by shifts in the relative strength of liberalizing or protectionist economic and political forces. But even in closed systems, however severe the penalties they impose on trade, black markets usually develop, owing to the “gains from trade” generated by natural economic forces.