European Union`s (EU) got competition, and the new competitor is TPP. The economic power of this group is 40% larger than EU, and the TPP agreement came into effect in 2006.
The Trans-Pacific Partnership (TPP) is a proposed regional regulatory and investment treaty. The proposed agreement began in 2005 as the Trans-Pacific Strategic Partnership Agreement (TPSEP or P4).
The TPSEP was previously known as the Pacific Three Closer Economic Partnership (P3-CEP), and it`s negotiations was launched on the sidelines of the 2002 APEC Leaders` Meeting in Los Cabos, Mexico, by Prime Ministers Helen Clark of New Zealand, Goh Chok Tong of Singapore and Chilean President Ricardo Lagos.
(Green dark; Currently in negotiations Green light; Announced interest in joining Blue; Potential future members)
All original and negotiating parties are members of the Asia-Pacific Economic Cooperation (APEC). The TPSEP and TPP are not APEC initiatives, but the TPP is considered to be pathfinder for the proposed Free Trade Area of the Asia-Pacific (FTAAP), an APEC initiative.
(21 APEC countries account for about 45% of global trade. They also make up some 40% of the world`s population).
It is a comprehensive agreement, affecting trade in goods, rules of origin, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, trade in services, intellectual property, government procurement and competition policy.
Among other things, it called for reduction by 90 percent of all tariffs between member countries by 1 January 2006, and reduction of all trade tariffs to zero by the year 2015.
On the last day of the 2010 APEC summit, leaders of the nine negotiating countries endorsed the proposal advanced by US President Barack Obama that set a target for settlement of negotiations by the next APEC summit in November 2011. However, negotiations have continued through 2012, 2013 and 2014.
Japan officially joined the TPP negotiations on 23 July 2013. According to the Brookings Institution, Prime Minister Abe’s decision to commit Japan to joining the TPP should be understood as a necessary complement to his efforts to stimulate the Japanese economy with monetary easing and the related depreciation of the Yen. These efforts alone, without the type of economic reform the TPP will lead to, are unlikely to produce long-term improvements in Japan’s growth prospects.
Members and potential members are Brunei, Chile, New Zealand, Singapore, United States, Australia, Peru, Vietnam, Malaysia, Mexico, Canada, Japan, Taiwan and Republic of Korea. South Korea is interested in joining the club. So are Taiwan, Philippines, Laos, Colombia, Indonesia, Cambodia, Bangladesh and India.
China and Thailand is also interested in joining the TPP club.
The negotiations goes on and it seems to be difficult for some countries to make an agreement which causes delays. Wikileaks’ exposure of the Intellectual Property Rights and Environmental chapters of the TPP revealed “just how far apart the US is from the other nations involved in the treaty, with 19 points of disagreement in the area of intellectual property alone.
One of the documents speaks of ‘great pressure’ being applied by the US.” Australia in particular opposes the US’s proposals for copyright protection and an element supported by all other nations involved to “limit the liability of ISP`s for copyright infringement by their users.” Another sticking point lies with Japan’s reluctance to open up its agricultural markets.
According to The Nation`s interpretation of leaked documents in 2012, countries would be obliged to conform all their domestic laws and regulations to the TPP’s rules, even limiting how governments could spend their tax dollars.
As of 2012, US negotiators were pursuing an investor-state dispute settlement mechanism, also known as corporate tribunals, which can be used to attack domestic public interest laws.
This mechanism is a common provision in international trade and investment agreements, that grants an investor the right to initiate dispute settlement proceedings against a foreign government in their own right under international law. For example, if an investor invests in country “A”, a member of a trade treaty, and country A breaches that treaty, then the investor may sue country A’s government for the breach.
Critics of the investment protection regime argue that traditional investment treaty standards are incompatible with environmental law, human rights protection, and public welfare regulation, meaning that TPP will be used to force states to lower standards e.g., environmental and workers protection, or be sued for damages. The Australian government’s position against investor state dispute settlement has been argued to support the rule of law and national energy security.
On March 26, 2015 WikiLeaks released the TPP’s Investment Chapter. According to WikiLeaks, the accord would grant the power to global corporations to sue governments in tribunals organized by the World Bank or the United Nations to obtain taxpayer compensation for loss of expected future profits due to government actions.
Another contentious issue of the TPP negotiations has been currency manipulation, wherein a country devalues its currency to boost exports and gain a trade advantage.
Politicians such as Senator Lindsey O. Graham and Representative Sander M. Levin “gathered a group of economists, manufacturing industry officials and labor leaders who agreed that the TPP should die unless it credibly prohibits countries from manipulating the value of their currency.”
Many economists claim that currency manipulation by Asian manufacturing countries has become pervasive, “allowing them to boost their exports at the expense of manufacturing companies in the United States and Europe.”
Furthermore, organisations such as the WTH or IMF cannot control such currency manipulation, so some are calling upon the US to “use the free-trade talks to force an end to such actions.”
A keynesian economist, Joseph Stiglitz, warned that the TPP presented «grave risks» and «serves the interests of the wealthiest.»
Organized labour in the U.S argued that the trade deal would largely benefit corporations at the expense of workers in the manufacturing and service industries. The Economic Policy institute and the Center for Economic and Policy Research argued that the TPP could result in further job losses and declining wages.
Global Intellectual Property Center (GIPC) has another point of view. In intellectual property (IP)-intensive sectors alone, more than 55 million jobs generate 74% of U.S exports, creating jobs at home while establishing the U.S as a leader in innovation and creativity.
A high standard TPP agreement would provide an opportunity to empower other nations to harness their innovative potential while also fostering American jobs and promoting U.S most cutting-edge industries.
Office of the United States Trade Representative says TPP will make it easier to sell Made-in-America goods and services exports to some of the most dynamic and fastest growing markets in the world, and support homegrown jobs and economic growth.
American small businesses are the backbone of the U.S economy, and have accounted for nearly two-thirds of new private sector jobs in recent decades. The TPP will improve transparency and regulations to help U.S companies engage in and benefit from increased trade in the Asia-Pacific.
The Trans-Pacific Partnership will grow trade with one of the world`s fastest growing regions, Office of the United States Trade Representative said.
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