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 2012, U.S. exports with the Trans-Pacific Partnership members reached almost $619 billion and California exports were over $58 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 three with regional countries (South Korea, 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.