This week, the Obama Administration took its first new free trade agreement initiative, announcing its intent to enter negotiations to establish a regional Trans-Pacific Partnership (TPP) free trade agreement with Singapore, Chile, New Zealand, Brunei Darussalam, Australia, Peru and Vietnam. The administration would also seek to expand this initial group to include other nations in the Asia-Pacific region and elsewhere (possibly Japan, Korea, Canada and Mexico).
The TPP initiative, also viewed as an effort to counter China’s growth and influence in the Asia-Pacific region, will take a new direction with regard to free trade agreements, particularly by focusing on such issues as labor rights and environmental protection. The United States already has existing free trade agreements with many of the TPP countries, so the bulk of any additional benefits for the United States may depend largely on what eventual new countries and new trade-opening provisions can be added.
Because the TPP process appears to have bipartisan support in Congress, and offers both important economic opportunities (estimated at $25 billion in exports each year) and possible costs (including transshipment issues), companies should be aware of these negotiations and take every opportunity to advocate for their expansion into these markets while also protecting their current business models.
The Office of the U.S. Trade Representative (USTR) is seeking comments from interested parties by January 25, 2010, and intends to hold public hearings in early 2010. Comments can address the reduction or elimination of tariffs or non-tariff barriers of the TPP countries, as well as any trade concessions that should be sought by the United States. (View the Federal Register notice here.) In particular, USTR seeks comments on the following topics:
- General and product-specific negotiating objectives.
- Costs and benefits to U.S. producers and consumers of removal of specific trade barriers.
- Proposals relating to customs laws and regulations and rules of origin.
- Barriers to trade in goods and services, including technical barriers to trade.
- Investment and trade-related intellectual property rights issues.
- Government procurement, labor and environmental issues.
- Proposals covering new and emerging technologies, and small- and medium-sized businesses.
This is an excellent opportunity for companies to expand their market opportunities in Asia and set the conditions for U.S. negotiations.