The ongoing negotiations involving the Trans-Pacific Partnership (TPP) have recently been the subject of increased attention, both in the national news, and within the international trade community. As officials become more optimistic about the likelihood of its passage, companies are looking forward to more efficient trade with 793 million consumers.
Discussions for what now has become the TPP began in 2005. Twelve countries are currently involved in the proposed agreement: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Officials involved in the negotiations have been tight-lipped about the contents of the TPP and only certain sections of the drafts have been leaked to the public. However, some of the topics the TPP is expected to cover are:
- Elimination of tariffs and other barriers to trade.
- Development of production and supply chains among TPP members.
- Complementary customs procedures.
- Rules of origin.
- Temporary entry.
- Financial services.
- Environmental and labor stipulations.
Officials state that they are “concluding” negotiations. Outside experts speculate countries are now finalizing terms of more controversial provisions such as those on agriculture and environmental requirements. One main area of contention is the implementation of an investor-state dispute resolution mechanism to enforce fair enactment of the TPP. In addition, many TPP countries require that their legislatures approve treaties before enactment. This is an additional hurdle in countries such as the U.S. where a divided Congress disagrees on the merits of the TPP. While the majority of Congress supports passage of the TPP, a significant number of Democrats oppose what they see as a domestic job-killer. This disagreement is playing out in negotiations to renew “trade promotion authority,” which allows the President to negotiate treaties that Congress can approve or disapprove, but cannot amend or filibuster. This would effectively guarantee congressional approval of the TPP. Trade Promotion Authority (TPA), also called “fast track” trade negotiation authority, is currently being debated in the Senate. TPA is a vital step in having the TPP approved and implemented.
It is predicted that enactment of the TPP in the next several years will have enormous impact on international trade. Currently, TPP countries together are the U.S.’s third largest goods export market, and fourth largest services export market. The U.S. Office of the Trade Representative estimates that by 2025 the TPP will provide $223 billion per year in global income benefits. American exporters and importers have a lot to gain from the TPP.