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Trans-Pacific Partnership PrimerPublished May 20, 2013Updated August 5, 2013National Journal Presentation CreditsProducer: Jenna FugateDirector: Jessica Guzik
The Trans-Pacific Partnership is a Free Trade Agreement Subject to Ongoing Negotiations
UpdatedAugust 5, 2013
Free trade agreements (FTAs) are arrangements between nations that reduce trade barriers like tariffs and import quotas
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
2Source: International Trade Administration.
Countries Currently Participating in TPP
Negotiating countryHas expressed interest in negotiatingNon-negotiating country
Analysis•The TPP is currently being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam•Japan joined the most recent round of negotiations in Malaysia on July 23•Potential future members include Taiwan, the Philippines, Laos, Colombia, Thailand, and Costa Rica•There have been 18 rounds of negotiations; each year, more countries join
3Source: International Trade Administration.
UpdatedAugust 5, 2013
New Negotiations Take Place as More Countries Join TPP
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
JanuaryU.S. agrees to enter talks with P4 about liberalizing trade in financial services
SeptemberU.S. announces it will
begin negotiations with P4 countries to
join the TPP
NovemberAustralia, Peru,
Vietnam announce they are joining TPP
negotiations
OctoberMalaysia
announces it will join TPP
negotiations
NovemberSouth Korea
expresses interest in joining TPP negotiations
JuneCanada and
Mexico announce they will join TPP
negotiations
AprilJapan
announces pending entry
into negotiations
MarchRound 1,
Melbourne, Australia
JuneRound 2,
San Francisco,
USA
October
Round 3,
Brunei
DecemberRound 4, Auckland,
New Zealand
FebruaryRound 5, Santiago
, Chile
MarchRound
6, Singap
ore
September
Round 8, Chicago,
USA
JuneRound 7, Ho Chi
Minh City, Vietnam
OctoberRound 9,
Lima, Peru
DecemberRound 10,
Kuala Lumpur, Malaysia
MarchRound11, Melbourn
e, Australia
MayRound
12, Dallas,
USA
JulyRound 13,
San Diego, USA
September
Round 14, Leesburg, Virginia,
USA
DecemberRound 15, Auckland,
New Zealand
MarchRound
16, Singapo
re
MayRound
17, Lima, Peru
New Countries Entering Negotiations
Rounds of Negotiations
4
JulyRound
18, Kota Kinabalu
, Malaysia
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.
UpdatedAugust 5, 2013
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 pirating video in movie theaters
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 ZealandBrunei
$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
5Source: 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.
UpdatedAugust 5, 2013
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 McDermo
tt(D-Wash.)
Rep. John Lewis
(D-Ga.)
Rep. John
Conyers(D-N.Y.)
Rep. Earl Blumenau
er(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
=
6Source: 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.
UpdatedAugust 5, 2013
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
=
7Source: 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.
UpdatedAugust 5, 2013
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)
Other Countries
Other APEC*ChinaJapan
Canada & MexicoAustralia, 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
8Source: 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.
UpdatedAugust 5, 2013