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TPP’s Impact on The Media and Entertainment Industry

November 2, 2016

Andrea DaSilva is a Senior Policy Analyst for Media & Entertainment Industries in Industry and Analysis’ Office of Digital Services Industries. She serves as Team Leader for the Global Media & Entertainment Team.

The Media and Entertainment (M&E) industry is one of the most vibrant exporting sectors of the U.S. economy – and with the help of the Trans-Pacific Partnership (TPP) agreement, M&E companies will experience increased benefits in high-growth international markets.

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Media and Entertainment

ITA’s comprehensive 2016 Top Markets Report for Media & Entertainment provides specifics on how this sector is expanding. It details export market prospects across four sectors, including book publishing, filmed entertainment, music, and video games, and provides a special review of the significant opportunities that will be generated for the M&E sector in TPP agreement countries.

TPP is anticipated to produce significant benefits to the U.S. Media and Entertainment industry, including robust growth rates, stronger anti-piracy protections, and unique opportunities for partnerships in licensing content.

Even after excluding the United States and Brunei, the ten TPP partner countries comprise $308 billion in M&E revenues for 2016. This trade zone will present opportunities for diverse sub-sectors, content, and delivery platforms. Opportunities across the TPP countries for M&E companies abound as policymakers focus on creating an equitable, fair, and accessible digital economy that protects intellectual property.

The TPP agreement has many essential components for enabling the M&E industry to share, create, and distribute content globally. Important facets and provisions of the TPP agreement include:

  • Prohibition of customs duties on digital products so that M&E businesses that distribute products electronically are not disadvantaged.
  • A clause detailing that imports of digital products (music, movies, videos, games, e-books and related entertainment software) are not subject to discriminatory taxation, outright blocking, or other forms of content discrimination.
  • Promoting global interoperability, so U.S. companies are less likely to have to produce special hardware for each country in order to operate there.
  • Promoting reasonable network access and competitive supply of telecommunications services, which enable communications and the distribution of M&E content and services.
  • Ensuring a competitive digital marketplace so that small businesses, individuals and others can access and move data freely, with commensurate privacy protections; this in turn protects an open Internet and digital and online cross-border trade.

The policies and regulations governing M&E sectors are struggling to keep pace and remain relevant. Many foreign governments are pursuing trade restrictive barriers to protect their markets. The TPP agreement is designed to remove undue restrictions and ensure that U.S. media and entertainment companies can access the valuable opportunities in the global digital economy.  Summary snapshots reflecting some of the potential TPP agreement opportunities are below:

Sub-sector: Video Games

Video games (especially digital) are growing exponentially across the globe, and there is no exception in the TPP countries. Every country is seeing major growth in this sector. The video games market is part of trend of transitioning to digital downloading platforms in TPP markets, with the Asian partner countries leading the way in growth: By 2019, Japan (17.1 percent CAGR, $707 million), Malaysia (19.8 percent CAGR, $38 million), Singapore (18.2 percent CAGR, $28 million), and Vietnam (24.1 percent CAGR, $14 million). These figures demonstrate the tremendous potential for U.S. companies to partner or license with in-country companies.

Country Case Study: Mexico

The sixth top market in the M&E Top Markets Report, Mexico has a booming M&E sector with the second largest media market in Latin America. Mexico’s M&E industry is set to grow at a 6.7 percent CAGR to reach $35.5 billion by 2019. The nominal GDP growth at 7.0 percent with an increasing household consumption, urbanization and broadband penetration (to reach 75 percent in 2018) signals a larger consumer base for M&E sectors. In 2010, the Mexican government launched a $20 million film tax incentive program aimed at encouraging both domestic production and foreign investment in the filmed entertainment sector. Piracy is a significant challenge, and neither the legal framework nor enforcement is particularly effective in protecting creative content, and therefore this is a major policy focus for the government to meet the standards of the TPP agreement.

For more information on this historic trade agreement and the future opportunities for M&E exports, please download ITA’s Media and Entertainment Top Markets Report  and visit our TPP site.

 

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U.S. Commercial Service Video Series Offers Window to Exporting, World Markets

November 1, 2016

Curt Cultice is a Senior Communications Specialist in ITA’s U.S. Commercial Service

Each year, our U.S. Commercial Service global network of trade professionals counsel thousands of small and medium-sized businesses on exporting. And based on this experience, we understand that the export process can be challenging for companies like yours. Perhaps you are looking to evaluate your export readiness, develop an export plan, or navigate the mechanics of exporting. You might even have some orders sitting directly in front of you.So no matter where you are in the export process, how best to become a successful, proactive exporter for the long-term?  Look no further, as the U.S. Commercial Service has developed a new set of “How to Export” resources including a series of themed export basics video shorts.

[Download the full video (16 MB)]

The first of six themes, Get Ready to Export!, consists of three videos and related resources that outlines in simple, animated detail, what businesses need to know about exporting:

  • Identifying each step of the export process
  • How to become export ready
  • Guidance on preparing a comprehensive export plan that includes determining potential markets, customers, pricing, and financing options.

As noted in the video, “A well-thought out export plan can make all the difference between generating a few international sales and achieving real business growth.”

Get Ready to Export! will be followed by five more export themes to be released on an ongoing basis through early 2017, as noted below:

  1. Get Ready to Export
  2. Plan Your Market Entry Strategy
  3. Find Foreign Buyers 
  4. Get Paid
  5. Make the Export Sale
  6. Navigate Your Export Market Successfully

Making the Case  

While many U.S. businesses are boosting their bottom line and competitiveness by making foreign sales, many have yet to do so. Only a small fraction of all U.S. companies export, and U.S. Department of Commerce data show that 59 percent of all current U.S. exporters sell to only one market. What are some reasons? For many companies, and especially smaller firms, exporting is often viewed as being too burdensome or ripe with pitfalls that might outweigh the potential for rewards, i.e., dealing with documentation and regulations or the risk of not being paid by the potential international customer.

In today’s global economy, the consequences of not looking beyond U.S. borders can directly impact your business’s long-term growth or success, as more than 95 percent of the world’s consumers are outside the United States. After all, if your business is not exporting, it’s highly likely your competitors—both foreign and domestic—are or will be selling internationally.

The  growth of emerging world markets, the rise of e-commerce, improved logistics options, and free trade agreements are among the major trends that has made exporting more viable than ever for even the smallest companies. In fact, Census Bureau data shows that 98 percent of U.S. companies that export are small- and medium-sized firms with fewer than 500 employees.

Looking at your business, there are some other attributes that might provide further incentive to explore exporting or expand current international sales. If your business has a good track record of selling in the United States, one of the world’s most open and competitive markets, it may also be a good candidate for selling into foreign markets. Also, if your firm has a web presence, you can look at customizing your website for global customers and taking advantage of e-commerce opportunities.

One of the most important things to know is that when it comes to exporting, your business doesn’t have to go it alone. The U.S. Government and its public and private sector partners provide a wide range of export assistance, starting with the U.S. Commercial Service’s global network of 108 offices across the United States and in U.S. embassies and consulates in more than 75 countries. For more information, visit http://www.export.gov.

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Manufacturing USA Connects People, Ideas, and Technology to Advance Manufacturing

October 31, 2016

As we close out Manufacturing Month, SelectUSA is featuring a two-part guest blog from members of the Federal Interagency Investment Working Group (IIWG). The IIWG is responsible for coordinating activities across federal agencies that promote investment. You can read the first entry here.

This post contains external links. Please review our external linking policy

Mike Molnar is Director of the Advanced Manufacturing National Program Office at Manufacturing USA.

Secretary of Commerce Penny Pritzker opening the International Technology Manufacturing Show on September 12, 2016

Secretary of Commerce Penny Pritzker opening the International Technology Manufacturing Show on September 12, 2016.

Fall is not traditionally known as the season of renewal. However, this fall has represented exciting changes for our efforts to build a network of institutes dedicated to securing the nation’s future through manufacturing innovation, education, and collaboration. On Sept. 12, 2016, U.S. Secretary of Commerce Penny Pritzker revealed the new public name of the National Network for Manufacturing Innovation: Manufacturing USA. This program is a network of innovation institutes—each of which are public-private partnerships that bring together industry, government, and academia to solve critical challenges in advanced manufacturing.

Secretary Pritzker told the crowd at the biennial International Manufacturing Technology Show (IMTS) in Chicago, “This name embodies our vision for a unified American manufacturing sector—where the brightest minds and the most innovative companies come together to develop the most cutting-edge technology in the world.”

Since the President’s Council of Advisors on Science and Technology first recommended the creation of the network four years ago, nine manufacturing innovation institutes have been announced, with six more planned by 2017. The current institutes are operated by the Departments of Defense and Energy. The institutes’ membership rolls include more than 1,300 companies and they are working on more than 240 major research and development projects. They are teaming up with universities, community colleges, technical schools and industry associations to train the workforce—of today and tomorrow—to support the high-tech manufacturing of the future. Each institute is stimulating investment in its local region and building relationships that span the country.

A few short weeks after the secretary’s announcement on Manufacturing Day, October 7, we launched a new website. ManufacturingUSA.com provides an industry-facing home for the stories of the network and its partners. As it grows, it will become a resource for the latest news on the institutes and advanced manufacturing.

And there are many stories to tell already. Manufacturing USA leverages federal funding to catalyze greater private investment of resources and expertise in key national manufacturing areas. More than $600 million in federal funding has been matched by more than $1.3 billion in non-federal investment. That high level of non-federal investment tells us that we are on the right path to reach one of the program’s goals—to foster sustainable institutes that are independent of federal funding within five to seven years.

Manufacturing USA shows why the United States—already a world leader in manufacturing and innovation—is the best country in the world to invest. Investors and international firms know that when they choose to invest in U.S. manufacturing, they’re selecting a thriving, dynamic market. Foreign direct investment (FDI) holds a significant position in the U.S. manufacturing industry: $1.2 trillion. This FDI directly supports almost 2.5 million U.S. jobs.

Manufacturing USA connects people, ideas, and technology to advance U.S. manufacturing; it demonstrates America’s dedication to remaining on the cutting edge of innovation. Each institute coordinates research that propel new products to market, benefiting communities across the country and helping keep the United States globally competitive in the 21st century.

Follow SelectUSA and Manufacturing USA on Twitter and join the conversation at #MFGmonth.

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Manufacturing and Innovation

October 28, 2016

This post originally appeared on the Department of Commerce blog.

Guest blog post by Laura Taylor-Kale, Deputy Assistant Secretary for Manufacturing, International Trade Administration

As October winds down, I say farewell to Manufacturing Day and what has turned into a celebration of manufacturing and innovation this entire month. Over the last few weeks, I have had the privilege of participating in events in Pennsylvania, North Carolina, and Tennessee to raise awareness about the importance of U.S. manufacturing and the critical role it plays in our economy. The factories and labs that I visited are bringing incredible ideas to the marketplace and beyond. The innovation happening in the manufacturing sector is inspiring – and so are the career opportunities!

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Deputy Assistant Secretary for Manufacturing Laura Taylor-Kale Participates in a Manufacturing Day Event at Phononic in Durham, N.C.

Witness the creativity and expansion of ideas generated by employees in both small and large manufacturing companies as well as at Manufacturing USA institutes  around the country.  Innovation and manufacturing are truly inextricably linked.

As President Obama stated in his 2015 State of the Union Address, “Twenty-first century businesses will rely on American science and technology, research and development. I want Americans to win the race for the kinds of discoveries that unleash new jobs.”

In Knoxville, Tennessee last week, I visited Local Motors, an auto manufacturer using 3D printing to make electric vehicles; the Manufacturing Demonstration Facility at the Oak Ridge National Laboratory; and the Institute for Advanced Composite Manufacturing Innovation (IACMI), one of the Manufacturing USA institutes. Local Motors’ innovative technologies used in design and processing builds on scientific research in advanced composites and additive manufacturing at IACMI – and these are exactly the kinds of synergies that the Administration is working to strengthen.

In addition, U.S. automakers and suppliers are investing heavily in new electric technologies and models. Electric vehicle sales continue to grow around the globe and are expected to be 35% of global new car sales by 2040. Since the Chevy Volt, Ford Focus Electric, Tesla, and Nissan Leaf all have assembly, research and development, and inventory processing in the U.S., sales of these vehicles will support the U.S. economy and job creation.

As the White House noted in the Administration’s Strategy for American Innovation last year, “Facilitating exports by innovative U.S. companies means giving them the tools to navigate foreign markets effectively.”  We in ITA’s Industry and Analysis unit help innovators become exporters by offering the Top Market Reports, a set of comprehensive, sector-specific market studies to help firms identify the best markets in which to grow their business. But we don’t stop there. We are proactively moving a trade agenda that advances market conditions to enable U.S. innovators to commercialize products, services, ideas, and business models on an international stage. They will be able to derive full benefit from an equal international playing field and utilize a competitive advantage earned through investments, ingenuity, hard work and sweat.

For instance, we are leading technical coordination to support harmonized standards and regulatory approaches in Asia, a key region of the world for both electric vehicle and auto parts exports, and an area to which we’ll be able to better export under high-standard trade agreements like TPP.

These and other efforts will help ensure that growing foreign markets stay open, thereby helping to ensure the global competitiveness of U.S. automotive and technology companies and to support the growth of manufacturing and innovation at home.  We are proud to support the manufacturing innovators who are shaping the world we live in today and the stronger one we will live in tomorrow.

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Where were you on Manufacturing Day?

October 27, 2016

As we close out Manufacturing Month, SelectUSA is featuring a two-part guest blog from members of the Federal Interagency Investment Working Group (IIWG).  The IIWG is responsible for coordinating activities across federal agencies that promote investment.

Mark Schmit is National Accounts Manager for the National Institute of Standards and Technology’s Manufacturing Extension Partnership. 

U.S. Secretary of Commerce Penny Pritzker was in Portland, Oregon at a Makers Gone Pro Event. Secretary Pritzker spoke to recent high school graduates pursuing technical careers and joined 100 students at the Lam Research Facility, the world’s second-largest semiconductor equipment manufacturer, emphasizing that by 2024, America’s economy will need to fill 2.2 million openings for production workers; half a million openings for engineers; and an untold number of openings for jobs in new, emerging occupations

I was fortunate to be invited to attend How Manufacturing Drives the Economy, an event hosted by the Fabricators & Manufacturers Association, International (FMA) in Rockford, Illinois. Expert panelists highlighted the significant role manufacturing plays in bolstering America’s economy and the critical need to ensure that the sector remains a positive force.

Each panelist asserted that Manufacturing Day (MFG Day) – the 5th iteration was held on October 7th – exemplifies the importance of manufacturing.  Thousands of manufacturers hosted students, teachers, parents, job seekers and community leaders at open houses, plant tours and educational sessions to showcase modern manufacturing technology and the attractive jobs that are available. It was (and still is) a chance for students to see innovative, impactful, durable and diverse career options. MFG Day can also help current students understand how to apply their studies in math and science to those careers. It dispels old, negative myths and stereotypes about manufacturing through highlighting the shift from a labor-intense environment to one of high-tech robotics and computers.

Stephen Gold, President and CEO of the Manufacturers Alliance for Productivity and Innovation, explained that the manufacturing value chain is far bigger than we think, since official government statistics only measure the value of the upstream supply chain and only include goods sold to final demand.  But the downstream chain, from sales to transport to aftermarket services – significantly multiplies this impact.

Kenneth Voytek, Chief Economist for the National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership program (MEP), shined a spotlight on the metalworking cluster in the upper Midwest. Via the U.S. Cluster Mapping tool, Voytek demonstrated that approximately 70% of the metalworking cluster is agglomerated in the Great Lakes region – no more than a day’s drive from Rockford, where the event took place. Citing MEP data, Voytek noted that workforce development will be the metalworking industry’s greatest challenges for the next three years – from recruitment to growth and continuous improvement. These were more acute challenges for firms this sector when compared to all other MEP clients – but clustering is expected to play a key role in attracting a wider pool of talent.

Scott Mayer, Chairman and CEO of QPS Employment Group, noted that baby boomers are retiring at a high rate, and a new generation of manufacturing workers is needed. However, filling this gap continues to be a challenge, due in part to the fact that there is not enough recognition that the sector supports many good, well-paid, middle-class jobs. Mayer pointed to a need for more “grassroots” efforts involving parents and educators alike to make sure high school students know they have choices beyond traditional four-year degrees. Indeed, many young people may be better suited to skilled trades.

Dr. Chris Kuehl, managing partner at Armada Corporate Intelligence and FMA economic analyst, looked at the significance of U.S. manufacturing from a global perspective. “The manufacturing sector is the dominant player in U.S. exports, particularly with heavy machinery and other capital goods,” he said, “and the U.S. is more export dependent than people realize; it accounts for 14 percent of GDP, almost matching export-driven Japan at its 14.7 percent of GDP. What most people don’t recognize is that the U.S. accounts for 30 percent of all global manufacturing by value. China accounts for only 10 percent.”

The event was, for me, eye-opening and inspirational.  On the return trip to O’Hare International Airport I had time to reflect on all that I heard and how it all fits together.  Resting my head against the window as we rolled east on I-90, I saw the many of the metal working companies that Kenneth Voytek talked about earlier. Many of those companies had an American flag outside their facilities, but it was also obvious that some of those companies represented vital international investment in our country: Amada in Schaumburg, IL is a Japanese company; Bystronic in Elgin, IL is Swiss-owned company; Mazak also in Elgin, IL is Japanese; and Trumpf in Hoffman Estates, IL, is German.

The metal cluster along I-90 in Illinois is grand on an international scale, and manufacturing companies from all over the world want to establish a presence there. They want to be part of the local manufacturing ecosystem and do business in the United States.  Which all begs the question . . .

Where were you on Manufacturing Day 2016?  And even more importantly – where will you be next year?

Follow SelectUSA and MEP on Twitter and join the conversation at #MFGmonth.

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ITA Supports Industry in Advancing Standards and Codes for Sustainable Construction

October 26, 2016

Joanne Littlefair is a Senior International Trade Specialist in Industry and Analysis’s Office of Materials Industries. She serves as Team Lead for the MDCP with ASTM International and International Code Council.

International markets supported more than $86 billion in exports for U.S. building product manufacturers in 2015. In fact, construction is expected to remain a growth sector globally looking forward, and a trend toward more sustainable “green” construction has swept world markets. ITA makes its mark on reducing and preventing technical barriers to trade in building products and services through its Market Development Cooperator Program (MDCP) with ASTM International. Focusing on the dynamic Gulf Cooperation Council states in the Middle East , the MDCP advances knowledge and solutions in a key element of trade facilitation: international standards.

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ASTM International booth, with ASTM, ITA, and ICC staff at a Doha, Qatar trade event in May 2015

International standards, along with building codes and technical regulations that reference such standards, play an important role in facilitating global trade by creating the certainty in which buyers and sellers thrive. High-quality, widely accepted international standards create a common language and common technical understanding, providing authoritative requirements for materials and products, procedures, and testing. A recent ITA study showed technical regulations potentially linked to 92 percent of U.S. goods exports in 2015.

In 2014, ITA launched its MDCP with ASTM International and code partner International Code Council (ICC) to share existing solutions and approaches with Gulf partners tackling complex sustainable construction challenges. The multi-year program includes workshops in the Gulf to learn about leaders’ priorities and initiatives, Gulf official delegation visits to the U.S. to engage in standards development and building code development activities, and a variety of hands-on and virtual training in green building topics.

Full details about the ITA MDCP, along with all presentations, webinar videos and other materials are publicly available and can be found at the ASTM program website. The most recent MDCP event was the October 20th ASTM-ICC-ITA Standards and Codes for Sustainable Construction workshop in Dubai with government and industry leaders. This workshop built on multiple events during Discover America week in Dubai, in which ASTM International’s senior leaders discussed the importance of standards to a wide variety of growing industries.

ITA projects $4 billion in new export opportunities in 2018 for just a subset of industries that benefit from the growth of green building: HVAC, lighting, plumbing, wood products, insulation, doors and windows, and glass.

Finally, ITA provides an excellent resource guide in its new and fascinating export market report 2016 Top Markets: Building Products and Sustainable Construction. This report projects which international markets will hold greatest value for these U.S. building products exporters in 2018 and provides detailed country case studies of leading markets.

Stay Informed and Engage in International Standards Development

Sign up for Notify U.S.to review and comment on proposed regulations around the world. Notify U.S. is a free, web-based information service designed to disseminate World Trade Organization Agreement on Technical Barriers to Trade (WTO TBT) notifications. It features e-mail notifications of changes to domestic and foreign technical regulations for industrial products (including product packaging, marking and labeling) and offers complete texts of proposed regulations for review and comment.

Sign up for ITA Standards Alert to learn about opportunities to participate in standards development in organizations such as the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC). Standards Alert is an ITA service in cooperation with the American National Standards Institute (ANSI), the private sector coordinator of the U.S. Standards system. U.S. company participation is key to making sure that standards do not become trade barriers.

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Connecting Economies for Growth: Secretary Pritzker on Why the TPP Matters

October 26, 2016

This post originally appeared on the Department of Commerce blog.

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This week, U.S. Secretary of Commerce Penny Pritzker sat down with Motorola Solutions CEO Greg Brown in Chicago to discuss the benefits of the Trans-Pacific Partnership’s (TPP) for U.S. businesses of all sizes. Their discussion was the focal point of a Motorola town hall in which employees had the opportunity to hear first-hand about the trade agreement. TPP is the most ambitious, high-standard trade agreement ever negotiated by the United States. Economic benefits of the agreement include the elimination of more than 18,000 tariffs and the elimination of discriminatory trade barriers that prevent U.S. companies from doing business in the Asia-Pacific region.

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U.S. Secretary Commerce Penny Pritzker and Motorola Solutions CEO Greg Brown at an armchair discussion in Chicago.

Secretary Pritzker and Mr. Brown discussed why TPP’s approval is important for U.S. employers and workers. In 2015, 4.1 million American jobs were supported by goods and services exports to the 11 TPP countries. With the agreement in place, there is an opportunity to create more jobs by reducing barriers to American exports of goods and services.

TPP also benefits employers and workers by allowing the U.S. to shape the rules of the global economy. For example, TPP contains the toughest labor protections of any U.S. trade agreement in history by requiring strong, enforceable standards in each partner country. In addition, TPP is the first Free Trade Agreement to require criminal penalties for trade secret theft, including by means of a computer system.

Small and medium-sized businesses will also benefit from TPP. For the first time in any trade agreement, there is a dedicated chapter on small and medium-sized businesses that focuses on how these firms can benefit from trade. TPP will address trade barriers that pose disproportionate challenges to small businesses, such as high tariffs, overly complex trade paperwork, corruption, customs “red tape,” restrictions on Internet data flows, weak logistics services that raise costs, and slow delivery of small shipments.

Secretary Pritzker underscored that TPP will promote American leadership and values internationally. Many TPP partners continue to not only welcome, but rely on a strong U.S. presence for everything from keeping the seas open for trade to protecting their territorial integrity. TPP will make the U.S. stronger abroad, bringing the U.S. closer together with allies and enhancing security and stability across the entire Asia-Pacific.

As Secretary Pritzker took questions from Mr. Brown and Motorola employees, she stressed that there will be consequences for American workers, and American businesses if TPP is not approved by Congress this year. She noted failure to approve TPP could cost the U.S. economy $94 billion each year in lost economic opportunities. The Secretary also emphasized the strategic consequences of inaction, affirming that countries like New Zealand, Vietnam, and Malaysia already have trade agreements with China, thus American exporters today have to pay the full tariff rates that their Chinese competitors do not. She stressed that the U.S. cannot afford to miss this opportunity to secure influence in the Asia-Pacific and ensure American businesses can compete.

To hear more about TPP from Greg Brown and Secretary Pritzker listen to their radio interview with WBEZ Chicago’s Worldview.