Grade 9-12
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Lesson

The Trans-Pacific Partnership (TPP): Are the Presidential Candidates Telling the Whole Story?

Updated: November 7 2016,
Author: Tawni Ferrarini, Stephen Day
Teacher Version

Standards

National Standards in Economics

State Standards

Concepts

Balance of Trade and Balance of Payments, Benefits of Trade, Trade, Exchange and Interdependence

Compelling question:

Are the presidential candidates telling the whole story about the Trans-Pacific Partnership (TPP)?

Introduction

The Trans-Pacific Partnership (TPP) or Trans Pacific Partnership Agreement (TPPA) is a trade agreement that opens the exports of U.S. producers to more countries around the world and imports from the rest of the world to U.S. consumers and producers. Expanded production, consumption, and investment opportunities emerge across globe.  So, why do politicians and economists disagree on the net effects?

Learning Objectives

  • Summarize each candidate’s position on the TPP.
  • Calculate profit and losses for various types of businesses as a result of the TPP using hypothetical data.
  • Write questions about the TPP for a debate between Trump and Clinton.
  • Construct possible responses the candidates would have to these debate questions.
     

Resource List

Process

  1. Review the Inquiry Design Model outline before teaching this lesson.
     
  2. Briefly introduce the Trans-Pacific Partnership (TPP). Explain that there is disagreement as to whether the deal will help America grow wealthier or not. Introduce the Summative Performance Task, explaining to students that they will act as the moderator for a debate between Trump and Clinton, and that it is their job to pose tough and informed questions to the candidates.
     
  3. Play the TPP Explainer video (CNN ). Ask students what some of the goals of the TPP are. [Improve the economy through trade; set standards and rules for trade that is already happening; give TPP member nations the opportunity to set trade rules without influence from China.]
     
  4. Pose the first supporting question: “What do politicians think about the TPP?” Tell the students that we will be hearing from Barack Obama, Donald Trump, and Hillary Clinton regarding their positions on the TPP. Play each of the videos:

  5. Call on students to summarize what each candidate thinks about the TPP. [Obama favors it and is currently actively attempting to get it passed by Congress. Clinton and Trump oppose the deal, and say that they would instead create some other kind of trade deal that would be a better deal for America.]
     
  6. Pose the second supporting question: “What do economists think about trade?” Play the following video on how trade works:

  7. Call on students to explain how trade allows countries to become wealthier. It is worth noting that professional economists overwhelmingly support open trade as a means to create prosperity.

    When economists do express concerns about trade, they usually focus on the experience of the companies that have lost out as a result of international competition. However, they also consistently find that the benefits of trade to consumers and to other domestic companies outweigh these costs.

    The contrast with the candidates’ message should be evident. You may also ask the students the following questions directly:

    • Why do economists believe people benefit from trading with each other?  (Economists believe that allowing individuals to specialize producing that good or service in which they possess a comparative advantage and trading production, employment, and consumption possibilities expand.  That is, everyone can produce something at a different cost than another person. By allowing people to specialize across neighborhoods, states, and countries, everyone produces more, can sell more, and spend and invest more.)
       
    • What is free trade?  (Free trade occurs when goods and services move freely and without barriers of tariffs, quotas, and restrictions to the most valued uses.)
       
    • What are the benefits of free trade?  (The cost of production decreases. In turn, consumers benefit from lower prices and greater variety, and producers benefit from higher profits.)
       
    • What are the costs of free trade?  (Industries in the U.S. that are relatively high cost producers of goods, services, and resources will pull back on production and employment and resources once dedicated to the production of the relatively high-cost output will need find alternative uses.)
       
  8. Pose the third supporting question: How might the Trans-Pacific Partnership affect different businesses in the United States? Explain that, while trade generally causes increased wealth, it also changes the kinds of jobs that people in a country do (this is true of anything that increases a nation’s wealth). This means that some companies and industries benefit more from trade, while others benefit less, and others may in fact be harmed by trade. Explain that the class will engage in scenario in which they calculate how different companies may experience a new trade deal. (Trade, of course, affects workers, consumers, and foreign trade partners as well, but in this activity we will simplify it to companies.)
     
  9. Students complete the TPP Profit and Loss worksheet. Remind the students that they will use what they are learning to inform their Summative Performance Task (debate moderation). Debrief the worksheet questions, which should begin an interesting discussion.

Conclusion

See the Summative Performance task above.

Extension Activity

Imagine what the answers from the candidates might be to your debate questions and write that answer for each question–assume that YOU have taught THEM something about trade, and that they have listened to you!

Possible student questions:

"You say that your trade deal will be better than the TPP. But what will you do besides require higher tariffs?”
Possible answer: it is unclear what a better trade deal might look like, since trade protections simply entail higher tariffs (taxes) or restrictions on US companies and consumers. Perhaps a candidate could secure better protections for intellectual property rights, which is already a main goal of the US under TPP.  
“Can you really guarantee economic growth in which people do not have to switch jobs?”
Possible answer: economic growth means the economy changes. As an economy changes, the types of jobs that people do change as well. This is the same whether the growth is caused by trade, or technology, or better production practices.
“Doesn’t specialization and division of labor always require people to change jobs?”
Possible answer: yes. When people increase their level of specialization, it means that they must change what they do at work. There can be a significant lag in the time that it takes people to change jobs, and the gains from trade aren’t always realized until this transition is complete. This is why candidates who endorse TPP also talk about supporting programs to help re-train workers whose industries may decrease.
“If we import more than we export, is that necessarily bad?”
Possible answer: no, not necessarily. Importing more means that we consume more, while exporting more means that we send goods and services overseas. However, exports increase GDP and imports decrease it.
“What policy is best for creating jobs?”
Possible answer: tariffs can preserve old jobs, while free trade creates new ones. On the balance employment should stay the same. People might blame foreign competition for job losses when in fact other factors actually caused it. Also, the benefits of free trade are spread around, so it’s not always easy to see where the benefits (and therefore the job growth) are coming from. 
"What would happen to the TPP if the US Congress does not ratify Fast-Tracking it?"
Possible answer: Fast-track is when Congress simply votes “yes” or “no” for the TPP as it has been negotiated by the executive branch, rather than allowing itself to change details of the TPP. Not permitting Fast-track would effectively tie up the TPP in the US Congress, where it would be unlikely to pass any time soon. The TPP would be greatly weakened if the USA did not take part in it–the USA’s economy is larger than all the rest of the TPP nations’ economies put together. Not being a part of TPP would reduce the USA’s negotiating power in the Asian political scene.

Assessment

Students complete the Summative Performance Task, either in class as or homework. Task: Pretend that you are the moderator at an election debate between Hillary Clinton and Donald Trump. You expect them to answer a question on trade much like they did in the videos we viewed in class.

  • Write three follow-up questions for the candidates based on what you have learned about economics and the TPP. The questions must:

    • Show that you have learned what the candidates have said about TPP, what economists say about trade, and how TPP may affect specific industries. Students may need guidance. It is up to the teacher whether or not to require the Extension Activity, in which students provide possible answers to their questions. (But if their questions are good enough, they should reflect sufficient student knowledge).
  • Possible student questions:

    • “You say that your trade deal will be better than the TPP. But what will you do besides require higher tariffs?”
    • “Can you really guarantee economic growth in which people do not have to switch jobs?”
    • “Doesn’t specialization and division of labor always require people to change jobs?”
    • “If we import more than we export, is that necessarily bad?”
    • “What policy is best for creating jobs?”
    • "What would happen to the TPP if the US Congress does not ratify Fast-Tracking it?"
Subjects:
Economics