Trans-Pacific Partnership (TPP)

Definition

The TPP was a proposed trade agreement between 12 countries around the Pacific Rim, aimed at deepening economic ties, reducing tariffs and promoting trade to boost growth. Although signed in 2016, it was not ratified by all members and did not take effect.

Analogy

Imagine TPP as an exclusive club that only certain countries could join. Once inside, they would have special privileges like lower costs for trading with each other. But before the club could officially open its doors, some members decided not to join after all.

Related terms

Ratification: This is the formal approval of an agreement or treaty by a country's legislative body.

Trade Bloc: This is a group of countries that join together in some form of agreement in order to increase trade among themselves and/or gain economic benefits from cooperation on some level.

Pacific Rim: This refers to the countries located around the edge of the Pacific Ocean. Many are part of important international trade routes.