Trans-Pacific Partnership Trade Agreement


Trans-Pacific Partnership Trade Agreement
 
On November 12, 2011, the Leaders of the nine Trans-Pacific Partnership countries – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States – announced the achievement of the broad outlines of an ambitious, 21st-century Trans-Pacific Partnership (TPP) agreement that will enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs. President Obama along with the other eight TPP leaders agreed to seek to finalize an agreement in 2012. 
 
Canada, Mexico and Japan have stated their intent to join the TPP negotiations. Please submit your comments in support of their expression of interest to the Office of the US Trade Representative by Friday, January 13, 2012.
 
 
 
 
 
 
December 14, 2011
On Wednesday, December 14, 2011, the House Ways and Means Subcommittee on Trade held a hearing on the Trans-Pacific Partnership (TPP) agreement. The hearing focused on the progress of the negotiations, a timetable for conclusion, and possible new members. Ambassador Demetrios Marantis from the U.S. Trade Representative's Office testified, along with several business leaders.   
 
The US Chamber submitted a statement for the record detailing support for the agreement and  the desire to see the TPP include the highest possible standards for trade and investment.


November 13, 2011
 

Background

On November 14, 2009, during his first trip to Asia as President of the United States, President Barack Obama announced the United States’ intention to engage with the Trans-Pacific Partnership countries to shape a regional agreement, with the objective of shaping a high-standard, broad-based regional pact  helping to expand U.S. exports, saving and creating good U.S. jobs. 
 
In November 2011, at the APEC meetings in Hawaii, Japan, Mexico and Canada expressed interest in joining the Trans-Pacific Partnership negotiations and were welcomed by the US.
 
The original Trans-Pacific Agreement negotiations were launched by Chile, New Zealand and Singapore at the APEC leaders’ summit in 2002. After attending a number of rounds as an observer, Brunei joined the Trans-Pacific Agreement as a “founding member”.
 
The Trans-Pacific Strategic Economic Partnership Agreement (TPP) was signed by New Zealand, Chile, Singapore and Brunei in the summer of 2005.
 
Following the passage of implementing legislation and regulations in March and April 2006, the Trans-Pacific Agreement entered into force on May 1, 2006 for New Zealand and Singapore, Brunei on June 12, 2006 and entered into force for Chile on November 8, 2006.
 
One of the objectives of the Trans-Pacific Agreement is to create a trade agreement that could be seen as a model within the Asia-Pacific region and could potentially attract new members. The agreement is open to accession “on terms to be agreed among the parties, by any APEC economy or other state”.
 
As part of the original outcome of negotiations in 2005 it was agreed to begin negotiations on financial services and investment within two years of entry into force. Those negotiations began in March 2008, with the United States participating while it considered whether to enter into negotiations to join the Trans-Pacific Agreement on a comprehensive basis.
 
The Asia-Pacific region is a key driver of global economic growth, representing nearly 60 percent of global GDP and roughly 50 percent of international trade. The average GDP growth rate in the rapidly growing and dynamic countries in this region was 5.3 percent in 2007, compared with the world average of 3.8 percent. Since 1990, Asia-Pacific goods trade has increased by 300 percent, while global investment in the region has increased by over 400 percent. In 2010, U.S. exports with the Trans-Pacific Partnership members reached $89.2 billion and California exports were over $11.98 billion.
 
Even though U.S. exports to Asia continue to rise, the United States is gradually losing market share.  Asian countries have negotiated more than 160 trade agreements among themselves, while the United States has signed only two with regional countries (Singapore and Australia). 
 
In their 2008 discussions, the Ministers emphasized the importance of the Trans-Pacific Partnership Agreement as a vehicle for Trans-Pacific-wide economic integration. This regional agreement sets a high standard that will enhance the competitiveness of the countries that are part of it and help facilitate trade and promote investment between them, increasing their economic growth and development.
 
They also noted that the Trans-Pacific Partnership is reinforcing the Asia-Pacific Economic Cooperation (APEC) goal of promoting regional economic integration and that it could serve as a potential way to build towards the Free Trade Area of the Asia Pacific.
 
Accession to the agreement will be possible after completion of the TPP with the current members.  Other APEC member countries will be able to  join or "dock" on to the TPP agreement at a later date without the right to amend the text. These negotiations are expected to take several years.

Anticipated Action

Ten rounds of negotiations of the TPP agreement were held in 2011, with additional rounds scheduled for 2012.  The areas of negotiations include: tariffs and other barriers to trade in goods, services and investments; competition; customs rules; capacity building; e-commerce; environment; government procurement; intellectual property; labor; sanitary and phytosanitary standards; technical barriers to trade; and telecommunications.


Staff members for the Office of the U.S. Trade Representative are consulting with committees in Congress, stakeholders in U.S. industry, agriculture and other sectors, and with labor and environment advisors. Congressional hearings are also underway. The U.S. Trade Representative team is conducting an unprecedented fifty-state domestic outreach strategy in preparation for continuing negotiations. 

CalChamber Position

The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.
 
New multilateral, sectoral and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
 
The California Chamber of Commerce supports new countries joining TPP with participants complying with current international norms and obligations, and committing to the high standards currently being negotiated for trade and investment, as well as, intellectual property protection and enforcement (building upon the IP Chapter in the US-Korea FTA). 
 
Agreements like this would ensure that the United States may continue to gain access to world markets, which will result in an improved economy and additional employment of Americans.

 

*Sources include www.ustr.gov, www.mfat.govt.nz , www.trademinister.gov.au

 



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