This is the Cato Daily Podcast for Wednesday, June 20th, 2012. I'm Caleb Brown.

Free Trade is better than managed trade, but a big block of countries trading

relatively more freely is a move in the right direction.

Now that Canada and Mexico are a part of the Trans-Pacific Partnership, what's next?

I talked to Dan Eekinson, director of the Cato Institute's Trade Policy Studies.

The Trans-Pacific Partnership negotiations have been going on for a few years.

It really is the only game in town for trade liberalization right now.

The USTR, the Trade Representative's office, really wasn't all that interested in this agreement a few years ago.

It was more an initiative of the State Department. The State

Department saw America re-engaging in Asia and saw this as sort of a way to hedge

against China's rise. They saw it as more of a security-driven

initiative than anything else. But eventually the USTR caught on and it's still a

pretty smallish setup.

It's the United States and eight relatively small countries,

four of whom we already have free trade agreements with.

The important newcomer is Vietnam. It's a country of 90 million people

and great upside potential. But without bigger countries, Canada, Mexico, and Japan in particular, it's almost laughable and we're going through

this exercise without really any real meat, real gains to be had.

So two days ago Mexico was invited by the nine participants in the

TPP negotiations to join and just yesterday Canada was invited to join.

Now without those two countries it's I think you know the economics of TPP is

laughable. The United States already has NAFTA with Canada and Mexico, which means that a lot of our production is already integrated in North America.

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