President Trump today signed an executive order stating that the United States will withdraw from the Trans-Pacific Partnership Agreement.
The U.S. Congress has never ratified the pact, and the pact has had no practical effect on U.S. life insurers to date. But the official death of the TPP agreement effort would eliminate the result of years of negotiations by the American Council of Life Insurers.
The life insurers that belong to the ACLI have been supporting the TPP negotiating effort and other trade negotiations for years, in the hope that the agreement would improve their access to large, lucrative insurance markets in countries such as Japan.
Representatives from the Washington-based were not immediately available to comment on the news of Trump’s signing of the TPP withdrawal executive order.
In July, Dirk Kempthorne, the president of the ACLI, put out a statement encouraging Congress to approve the TPP as quickly as possible.
In the insurance sector, the TPP “addresses the importance of a level playing field, by establishing broad, as well as more specific, commitments with respect to state-owned enterprises, which often have an unfair advantage over the private sector in marketplace competition,” Kempthorne said at the time.
Kempthorne said putting the agreement into effect would help U.S. life insurers offer innovative life insurance and retirement security products to a large group of potential new customers.
Critics of the TPP, and the process used to draft the pact, argued that the drafting process was too secretive, gave big corporations too much ability to shape the text, and led to the creation of a long, hard-to-understand document that might hurt the interests of the environment, U.S. workers and other U.S. interests.
Both Trump and Bernie Sanders attacked the pact while running for president. Trump said in November 2015, during a Republican primary candidate debate, that the TPP text is 5,600 pages long. “It’s so complex that nobody’s read it,” Trump said. “It’s like Obamacare; nobody’s ever read it.”
Brunei, Chile, New Zealand and Singapore formed the free trade area that serves as the basis for the TPP in 2005. They later brought the United States and seven other countries into TPP talks. In addition to the four original signatories and the United States, the list of countries that gave the pact preliminary approval in February 2016 includes Australia, Canada, Japan, Malaysia, Mexico, Peru and Vietnam.
To put the pact into effect, officials in the 12 original signatory countries must get all of the signatories to ratify the pact by Feb. 4, 2018. After that date, the parties could put the pact into effect if at least six signatories which have 85 percent of the combined gross domestic product of all 12 signatories ratify the pact.
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