What is it?
The TPP is an international trade agreement that has the potential cover around 40 per cent of global trade, making it one of the most ambitious deals attempted in history.
It is currently being negotiated by 12 countries in the Asia-Pacific region: US, Japan, Brunei, Malaysia, Vietnam, Singapore, Australia, New Zealand, Canada, Mexico, Chile and Peru.
With negotiations having commenced in 2005, progress with the TPP has been slow due to a variety of disagreements and negotiations.
What will it mean for global trade?
The TPP aims to promote free trade between member countries, reducing, and in some cases eliminating, tariffs and quotas. A conclusion of the agreement would mean lower costs of importing and exporting, with the potential for increases in job opportunities and GDP. Smaller countries could benefit from the decrease in tax on trade, while working conditions would improve due to a clamp down on labour rights violations.
However, the agreement has much more to it than tariffs and labour, since it also covers issues such as intellectual property, copyright protection, environmental management, and dispute procedures.
What are the implications?
The TPP has been the subject of criticism in a number of areas. Negotiations have been interpreted as being overly secretive due to closed door consultations, and Wikileaks released documents that claimed the TPP showed a lack of “mandated clauses or meaningful enforcement measures” in its Environment Chapter.
It has been claimed that the investor state dispute procedures in the agreement, which will allow companies to sue countries’ governments if they feel they are having an adverse effect on their bottom line, may favour larger corporations. There have also been concerns raised over drug patenting rules in the agreement, which could reduce competition in the sector, hiking prices and delaying the release of new products.
Are there any possible benefits?
Consumers are likely to benefit from lower prices as barriers to trade disappear, while representatives claim that the TPP would tie participating nations to certain standards in labour rights and conditions.
Vietnam is a good example of a country set to benefit from the deal. A major exporter of footwear and apparel, its export tariffs are set to drop to zero per cent, making the country much more competitive. At the same time, the country will be expected to improve its labour conditions.
When could it happen?
The USA is currently trying to speed up the conclusion of the agreement by pushing through a Trade Promotion Authority (TPA), which would commit trade deals to be given a speedy up-or-down vote in congress. This would make deals with the US more attractive to other countries since terms of agreements wouldn’t be subject to slow processes in US government.
President Obama has not yet been granted the TPA, but senate majority leader Mitch McConell told ABC news that it will be passed this week. The fight over the TPA is being seen as fundamental in concluding the long, drawn out negotiations of the TPP.
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Photo from White House PR, Flickr