PRESIDENT OBAMA’S APPROACH TO ASIA-PACIFIC
Trans-Pacific Partnership
Betsy BarrientosMarch 5, 2012
Agenda
TPP Overview
TPP Components
President Obama’s Approach
U.S. National Interests Commonwealth of Virginia
Potential Impediments to the Agreement
Policy Analysis
Q & A
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Overview
TPP Origins
Into force in 2006
Trade liberalization in the Asia Pacific Region
Original signatories: Brunei, Chile, New
Zealand and Singapore
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Overview
Original Brunei, Chile,
Singapore, NZ
In NegotiationAustralia, Malaysia,
Peru, Vietnam, USA
Potential MembersCanada, Japan,
Mexico
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Overview
Notably missing:
China
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Overview
Geographically diverse
Comprehensive trade agreementElimination of all tariffs among all countries
by 2017 (99% with Brunei)
Negative list for Services and Investments - unless specifically mentioned, a category is assumed to be covered by the agreement
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Overview
Includes:
sanitary and phytosanitary standards
technical barriers to trade
competition policy
IPR
government procurement
environmental and labor standards
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President Obama’s Approach
“America’s first Pacific President” - November 2009
“... the Asia Pacific region is key to achieving my goal of doubling U.S. exports and creating new jobs."
- November 2011
Increase engagement in all aspects of its relations with countries in the region
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President Obama’s Approach
Strategic alliances with Philippines and Australia
Clinton’s visit to Myanmar
Conditional food aid to North Korea
President Obama’s 10-day trip to Asia
TPP main trade objective of the Administration
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TPP Agreement:U.S. Policy Objectives and Interests
Expand and increase trade
Shape economic interactions in the region
Positive engagement and commitment to AsiaCatalyst for other Asian Pacific countries to
join the TPP agreement
Trans-Pacific integration vs. intra-Asian
integration
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Specific Areas of U.S. National Interests
Agricultureincrease regulatory coherence, eliminate
redundancies in testing and certification of food and animal and plant health
Manufacturinglinkages to supply chains across the region
Intellectual Property RightsFollow TRIPS; trademarks, copyrights, patents, trade
secrets, etc
Green growth and e-commerceillegal subsidies to fisheries, illegal wildlife tradetaxing of electronic transactions, authentication of
online transactions, consumer protection
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Concerns for the Commonwealth of Virginia
Tobaccoleaf and products not included as part of
the agreement
no protection or incentives for this sector
industry might be at a disadvantage as it has limited access to a global market
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Risks
Regional agreement undermines WTO and Doha Round
Trade diversion: lower tariffs of an agreement causes trade to be diverted away from a more efficient producer outside the bloc
“Spaghetti bowl” effect: overlapping and inconsistent FTAs
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Impediments
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Potential Impediments
AgricultureNew Zealand’s dairy products could have
improved access to US market
Japan’s politics and government policies relating to agriculture (rice).
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Potential Impediments - Con’t
Intellectual PropertyInconsistent policies among countries
Copyright and patent terms that adhere to US standards, e.g. endless copyright terms
Strong emphasis on pharma and multi-media
Elimination of parallel trade on copyrighted materials
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Potential Impediments - Con’t
Access to Medicine Seize shipments of drugs on suspicion on IP
infringement and to increase damages from IP infringement
Increase of data exclusivity - prevents existing clinical trial data to be shared with makers of generic drugs
Increase of duration patent terms - could delay competition of generic brands
Access to affordable medicine for developing countries
Schemes of subsidized medicine in New Zealand
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TPP: Policy Analysis
FTAs already signed with most TPP countries; trade barriers low
Market size of countries small, if considered individually
Is the TPP an economic agreement? Yes, for the most part… it has the potential to be much
more
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TPP: Policy Analysis
As an economic agreement, TPP could raise standards for market access and bridge differences between American and Asian regions
Potential to represent about 40% of total global trade
AND
Establish a new framework for future FTAs
Enable “presence” in the region and thus influence economic and strategic initiatives
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TPP: Policy Analysis
Intellectual Property
TRIPS+ may not be suitable for all TPP countries
Undermine alternative IP standards
Potential to negatively affect health sector in some countries
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TPP: Policy Analysis
As an alternative, US could update IP and copyright laws and engage in patent reforms IP and copyright laws set in the 1970s
Guidance and consultation from additional industries, other than pharmaceutical and recorded media.
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TPP: Policy Analysis
Also consider the challenges of the following:
President Obama may seek trade promotion authority (TPA)
For Asia, TPP is not the only option to increase trade ASEAN +3, bilateral agreements
If TPP agreement fails, U.S. could see its position weakened in the region
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QUESTIONS?
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