Academic journal article Journal of Competitiveness Studies

Trans-Pacific Partnership – Commentary

Academic journal article Journal of Competitiveness Studies

Trans-Pacific Partnership – Commentary

Article excerpt


In 2011, the US government arrived at the conclusion that the WTO Doha Round had not been making enough progress and a more promising strategy and trade policy had to be pursued. A key such policy is the Trans-Pacific Partnership (TPP) negotiation, not only because it covers an important region in the world but also because it has the potential to be the building block for a wider Free Trade Agreement of the Asia-Pacific region (FTAAP), a goal endorsed by the Asia Pacific Economic Cooperation alliance of 21 countries (APEC) at the 2006 APEC summit in Hanoi. TPP, a free trade and investment agreement, covers twelve countries - Australia, Brunei Darussalam, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States, with market size of about 800 million consumers and a combined GDP of about $28 trillion, the equivalent of 40% of world GDP. Originally, TPP negotiations were launched in 2002 with three founding countries: Chile, New Zealand and Singapore. In 2005, Brunei joined, followed in 2008 by the United States, Australia, Vietnam and Peru. In 2010, Malaysia joined. Canada and Mexico joined in 2012 and in 2013 Japan joined and the Republic of Korea (Korea) announced an interest in joining. Other countries potentially interested in TPP include Taiwan, Philippines, Laos, Colombia, Indonesia, Bangladesh, Cambodia and, despite initial opposition, China as well.

In his first visit to Asia in November 2009, President Barack Obama affirmed US commitment to TPP and in 2009 Congress was notified that the President planned to enter TPP negotiations. Since that time, about 20 rounds of TPP negotiations have taken place and convened in cities throughout the 12 member countries, covering the following main themes:

. Market Access by eliminating tariffs and other barriers to trade and investment.

. Cooperation to develop cross-national production and supply chain systems among TPP members.

. Regulatory coherence to coordinate trade and investment rules and make legislation more transparent.

. Encourage small and medium size enterprises (SME) to benefit from TPP opportunities.

. Promoting trade and investment in modern digital and green technologies.

. Making TPP a living agreement to enable updates when needed to address trade and investment issues that arise with the implementation of the agreement.

TPP negotiators struggled to address difficult issues, such as:

. Intellectual property provisions proposed by the US that were criticized as being excessively restrictive, providing restraints beyond those in the Anti-Counterfeiting Trade Agreement (ACTA) and limiting developing countries' access to generic medicines, which is necessary to make affordable generic medicine available to more people in developing countries. Even some senior members of US Congress were critical of the inflexibility of the IP rules proposed by US delegation.

. Japan's continued reluctance to open its agriculture sector to international competition. This problem is important because it is expected that US Congress will not approve TPP until Japan agrees to liberalize its agriculture policy and allow importation of food and rice.

. Investor-state dispute mechanism that critics say allows MNCs to bring legal action against local governments if their policies such as "buy local" rules impact a MNC's investment in that country.

. Currency manipulation, such as currency devaluation by Asian governments to promote exports, which they supposedly have done in the past.


The Asia Pacific region is important for the United States for it is the fastest growing region in the world and a key driver of global economic growth. The region, together with the US, accounts for 40% of global GDP and one third of international trade and is expected to grow by around 8% annually. US-TPP trade in goods and private services was $1. …

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