When a nation grants trading partners preferential access to their market, they expect to receive the same treatment in return. Strong “rules of origin” protect this dynamic—strictly defining the extent to which inputs from countries outside an agreement can be incorporated into products that benefit from duty-free treatment. Such rules are especially vital to the U.S. automotive industry, because other nations—particularly Japan—import significant quantities of auto parts from outside the TPP bloc.
All trade agreements should include rules of origin standards that meet or exceed those established under NAFTA. Reports indicating that the TPP includes weaker rules of origin are disconcerting.