As discussed in our blog post here, the TPP is a major free trade agreement between twelve countries in the Asia Pacific and the Americas that has been under negotiation for over four years. These twelve countries are the USA; Canada; Japan; Australia; New Zealand; Singapore; Vietnam; Malaysia; Chile; Peru; Mexico; and Brunei.
On 24 June (Washington DC time), the US Congress voted to give President Obama “Trade Promotion Authority”. Trade Promotion Authority authorises the President to enter into trade deals and eases the TPP’s passage to ratification by disallowing any Congressional amendments. Although the authority is not the signing of the TPP itself, it is a significant signal that the TPP is to be signed imminently.
As negotiations enter the final stages, it is clear that the TPP will bring about broad-reaching changes to the way organisations across the world do business. We have created the Trans-Pacific Partnership Hub to keep you up to date with the latest developments. We will continue to update the Hub as the implications for specific sectors and businesses are delivered.
For further information, please contact one of the TPP Expert Team listed below, or your usual Herbert Smith Freehills contact.
Why is this relevant to you?
The TPP is the first step towards establishing the Pacific Rim as a major free trade zone. It is difficult to appreciate the magnitude of this economic area. The combined GDP of the member countries will be approximately US$28 trillion. It constitutes 40% of global GDP, 25% of global trade volume, and covers over 11% of world population. This is second only to the European Union in its scale, and there is a real possibility of the area increasing with other Pacific Rim countries already asking to join.
The TPP is far more than a Free Trade Agreement in the traditional sense and will be of enormous significance to a large range of businesses, as it seeks to harmonise:
- financial services regulation
- intellectual property protections
- government procurement regimes
- investor protection rules
- rules governing the conduct of state-owned enterprises
- environmental and labour standards
Further, the TPP will be of relevance to all businesses who invest in or trade with a Pacific Rim country, no matter where they are situated.