National Journal's Trans-Pacific Partnership Primer

Trans-Pacific Partnership Primer Published May 20, 2013

National Journal Presentation Credits Producer: Jenna Fugate Director: Jessica Guzik

The Trans-Pacific Partnership is a Free Trade Agreement Subject to Ongoing Negotiations

Source: International Trade Administration.

Free Trade Agreements Free trade agreements (FTAs) are arrangements between nations that reduce trade barriers like tariffs and import quotas

Trans-Pacific Partnership

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement that aims to liberalize trade of most goods and services and go beyond trade commitments currently established by the World Trade Organization (WTO); the TPP could potentially eliminate tariff and non-tariff barriers to trade and investment among the countries involved and could serve as a template for a future trade pact

Countries Currently Participating in TPP

Source: International Trade Administration.

Negotiating country

Has expressed interest in negotiating

Non-negotiating country

Analysis •  The TPP is currently being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru,

Singapore, Vietnam and Japan •  Potential future members include Taiwan, the Philippines, Laos, Colombia, Thailand, and Costa Rica •  There have been 16 rounds of negotiations and each year more countries join the negotiations

New Negotiations Take Place as More Countries Join TPP

Source: International Trade Administration; Office of the U.S. Trade Representative, Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, 2013.

2005 2008 2010 2011 2012 2013

Trans-Pacific Strategic Economic Partnership (P4) initiated as a free

trade agreement among Brunei, Chile, New

Zealand, and Singapore, aiming to make

economies of the Asia-Pacific region more

liberal

January U.S. agrees to enter talks with P4 about liberalizing trade in financial services

September U.S. announces it will begin

negotiations with P4 countries to join the TPP

November Australia, Peru, Vietnam

announce they are joining TPP negotiations

October Malaysia announces it

will join TPP negotiations

November South Korea expresses interest in joining TPP

negotiations

June Canada and Mexico announce they will

join TPP negotiations

March Japan announces it

will join TPP negotiations

March Round 1,

Melbourne, Australia

June Round 2, San

Francisco, USA

October Round 3, Brunei

December Round 4, Auckland,

New Zealand

February Round 5, Santiago,

Chile

March Round 6, Singapore

September Round 8, Chicago,

USA

June Round 7, Ho

Chi Minh City, Vietnam

October Round 9, Lima, Peru

December Round 10,

Kuala Lumpur, Malaysia

March Round11,

Melbourne, Australia

May Round 12,

Dallas, USA

July Round 13, San Diego,

USA

September Round 14, Leesburg,

Virginia, USA

December Round 15,

Auckland, New Zealand

March Round 16, Singapore

May Round

17, Lima, Peru

New Countries Entering Negotiations Rounds of Negotiations

U.S. Seeks Increased IP Protection, Better Market Access in TPP Negotiations

Analysis •  Among confirmed TPP members, U.S. is negotiating for market access to goods, services, and agriculture with countries with

which it does not currently have FTAs: Japan, Malaysia, Vietnam, New Zealand, and Brunei •  The U.S. is seeking increased intellectual property rights protection, such as requiring criminal penalties for importing counterfeit

labeling and packaging, whether done willfully or not, and requiring criminal penalties for cam-cording in movie theatres

Japan

Malaysia

Brunei

U.S. Imports (In Billions) U.S. Exports (In Billions)

$3.4 $3.2

$25.9 $12.9

$146.4 $70.0

0.1 0.2

Trade Concerns

The U.S. dairy sector wants protection from New Zealand’s dairy exporters

Vietnam

New Zealand

Brunei

$4.6 $20.3

$0.1 $0.2

Certain U.S. footwear manufacturers have argued for maintaining high tariffs on imported footwear, while Vietnam is pressing for lower tariffs to gain greater access to the U.S. market

Trans-Pacific Partnership Countries With Whom U.S Does Not Have Existing FTAs


TPP Member

Opponents Concerned That TPP Involvement Compromises U.S. Trade

•  Member countries at varied levels of economic development may not be able to meet U.S. trade standards, forcing the U.S. to make concessions

•  Increased intellectual property rights protection

may weaken ability of the U.S. to obtain generic medicines, compromising Americans’ access to affordable medicine

•  Focus on the TPP and other regional/bilateral free

trade agreements may divert necessary attention and resources from multilateral WTO initiatives

•  Free trade agreements may complicate commerce,

with different rules and standards for different FTAs that companies must take into account when conducting international trade

•  The TPP could impact current U.S. trade policies;

for example, there is a question of whether the TPP could preclude the U.S. from negotiating bilateral FTAs, such as an FTA with the EU

Sen. Bernie Sanders (I-Vt.)

Rep. Henry Waxman (D-Calif.)

Rep. Sander Levin

(D-Mich.)

Rep. John Conyers (D-Mich.)

Rep. Jim McDermott (D-Wash.)

Rep. John Lewis (D-Ga.)

Rep. John Conyers (D-N.Y.)

Rep. Earl Blumenauer

(D-Ore.)

Rep. Lloyd Doggett (D-Tex.)

Have expressed concerns about the effect TPP requirements would have on U.S. access to

generic medicine:


Concerns with U.S. TPP Involvement

=

Supporters Believe Successful Negotiations Could Set Positive Precedent

•  The TPP provides the U.S. an opportunity to negotiate a comprehensive and high-standard FTA and protect its trade interests

•  Successful negotiation and implementation of new

trade rules proposed in the TPP could set precedent for future WTO negotiations

•  Trade might be further liberalized if other

countries in the region consider joining the TPP based on the success of the negotiations (as was the case with Canada and Mexico recently)

•  The TPP could bolster economic policy reforms,

particularly for countries such as Vietnam (the WTO is critical of Vietnamese labor rights and intellectual property rights standards), by enforcing higher policy standards and liberalizing trade

President Barack Obama

Obama supports TPP negotiations as the leading trade policy initiative of the Obama

administration, and part of the administration’s “pivot” to Asia


Potential Benefits of U.S. TPP Involvement

=

TPP Could Have Large-Scale Impact on U.S. Trade


Analysis •  The TPP could have a significant impact on U.S. trade because potential TPP members account for 62% of U.S. trade; confirmed

TPP members account for 34% of U.S. trade •  Certain industries that export to TPP countries will be impacted; the major U.S. merchandise exports to TPP countries are

machinery (e.g., computers, turbines, and agricultural equipment), electrical machinery (e.g., integrated circuits, semiconductors, and cell phones), autos, and refined petroleum products

U.S. World and TPP Goods Trade (In billions of U.S. dollars)

0

1

2

3

4

5

6

7

8

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Other Countries

Other APEC*

China Japan

Canada & Mexico Australia, Chile, Peru & Singapore

Brunei, Malaysia, New Zealand, & Vietnam

Total U.S. Trade (100%)

Potential TPP (62%)

Current TPP (34%)

$

$

$

$

$

$

$

$

$

B

B

B

B

B

B

B

B

B

* China, Hong Kong, Indonesia, South Korea, Papua New Guinea, Peru, The Philippines, Russia, Taipei, and Thailand

National Journal's Trans-Pacific Partnership Primer

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