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Trans-Pacific Partnership Primer

Published May 20, 2013


National Journal Presentation Credits Producer: Jenna Fugate Director: Jessica Guzik

The Trans-Pacific Partnership is a Free Trade Agreement Subject to Ongoing Negotiations

Free Trade Agreements

Free trade agreements (FTAs) are arrangements between nations that reduce trade barriers like tariffs and import quotas

Trans-Pacific Partnership

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement that aims to liberalize trade of most goods and services and go beyond trade commitments currently established by the World Trade Organization (WTO); the TPP could potentially eliminate tariff and non-tariff barriers to trade and investment among the countries involved and could serve as a template for a future trade pact

Source: International Trade Administration.

Countries Currently Participating in TPP

Negotiating country Has expressed interest in negotiating Non-negotiating country

Analysis The TPP is currently being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore,Vietnam and Japan Potential future members include Taiwan, the Philippines, Laos, Colombia, Thailand, and Costa Rica There have been 16 rounds of negotiations and each year more countries join the negotiations
Source: International Trade Administration.

New Negotiations Take Place as More Countries Join TPP


New Countries Entering Negotiations
Trans-Pacific Strategic Economic Partnership (P4) initiated as a free trade agreement among Brunei, Chile, New Zealand, and Singapore, aiming to make economies of the AsiaPacific region more liberal November Australia, Peru,Vietnam announce they are joining TPP negotiations March Round 1, Melbourne, Australia October Malaysia announces it will join TPP negotiations

Rounds of Negotiations
June Round 7, Ho Chi Minh City,Vietnam May Round 12, Dallas, USA September Round 14, Leesburg, Virginia, USA July Round 13, San Diego, USA May Round 17, Lima, Peru

October Round 3, Brunei

March Round 6, Singapore

December Round 10, Kuala Lumpur, Malaysia

March Round 16, Singapore

2005

2008

2010

2011

2012

2013

January U.S. agrees to enter talks with P4 about liberalizing trade in financial services September U.S. announces it will begin negotiations with P4 countries to join the TPP

June Round 2, San Francisco, USA

February Round 5, Santiago, Chile December Round 4, Auckland, New Zealand

October Round 9, Lima, Peru

March Round11, Melbourne, Australia June Canada and Mexico announce they will join TPP negotiations

December Round 15, Auckland, New Zealand March Japan announces it will join TPP negotiations

November South Korea expresses interest in joining TPP negotiations

September Round 8, Chicago, USA

Source: International Trade Administration; Office of the U.S.Trade Representative, Ian F. Fergusson,William H. Cooper, Remy Jurenas, and Brock R.Williams, The Trans-Pacific Partnership Negotiations and Issues for Congress, Congressional Research Service, April 15, 2013.

U.S. Seeks Increased IP Protection, Better Market Access in TPP Negotiations


Trans-Pacific Partnership Countries With Whom U.S Does Not Have Existing FTAs
TPP Member U.S. Imports (In Billions) $146.4 U.S. Exports (In Billions) $70.0 Trade Concerns

Japan Malaysia

$25.9

$12.9
Certain U.S. footwear manufacturers have argued for maintaining high tariffs on imported footwear, while Vietnam is pressing for lower tariffs to gain greater access to the U.S. market The U.S. dairy sector wants protection from New Zealands dairy exporters

Vietnam

$20.3

$4.6

New Zealand Brunei Brunei

$3.4

$3.2

0.1 0.2 $0.1 $0.2

Analysis Among confirmed TPP members, U.S. is negotiating for market access to goods, services, and agriculture with countries with which it does not currently have FTAs: Japan, Malaysia,Vietnam, New Zealand, and Brunei The U.S. is seeking increased intellectual property rights protection, such as requiring criminal penalties for importing counterfeit labeling and packaging, whether done willfully or not, and requiring criminal penalties for cam-cording in movie theatres
Source: International Trade Administration; Office of the U.S.Trade Representative, Ian F. Fergusson,William H. Cooper, Remy Jurenas, and Brock R.Williams, The Trans-Pacific Partnership Negotiations and Issues for Congress, Congressional Research Service, April 15, 2013.

Opponents Concerned That TPP Involvement Compromises U.S.Trade


Concerns with U.S.TPP Involvement
Member countries at varied levels of economic development may not be able to meet U.S. trade standards, forcing the U.S. to make concessions Increased intellectual property rights protection may weaken ability of the U.S. to obtain generic medicines, compromising Americans access to affordable medicine Focus on the TPP and other regional/bilateral free trade agreements may divert necessary attention and resources from multilateral WTO initiatives Free trade agreements may complicate commerce, with different rules and standards for different FTAs that companies must take into account when conducting international trade The TPP could impact current U.S. trade policies; for example, there is a question of whether the TPP could preclude the U.S. from negotiating bilateral FTAs, such as an FTA with the EU
Have expressed concerns about the effect TPP requirements would have on U.S. access to generic medicine:

Sen. Bernie Sanders (I-Vt.)

Rep. Henry Waxman (D-Calif.)

Rep. Sander Levin (D-Mich.)

Rep. John Conyers (D-Mich.)

Rep. Jim McDermott (D-Wash.)

Rep. John Lewis (D-Ga.)

Rep. John Conyers (D-N.Y.)

Rep. Earl Blumenauer (D-Ore.)

Rep. Lloyd Doggett (D-Tex.)

Source: International Trade Administration; Office of the U.S.Trade Representative, Ian F. Fergusson,William H. Cooper, Remy Jurenas, and Brock R.Williams, The Trans-Pacific Partnership Negotiations and Issues for Congress, Congressional Research Service, April 15, 2013.

Supporters Believe Successful Negotiations Could Set Positive Precedent


Potential Benefits of U.S.TPP Involvement
The TPP provides the U.S. an opportunity to negotiate a comprehensive and high-standard FTA and protect its trade interests Successful negotiation and implementation of new trade rules proposed in the TPP could set precedent for future WTO negotiations Trade might be further liberalized if other countries in the region consider joining the TPP based on the success of the negotiations (as was the case with Canada and Mexico recently) The TPP could bolster economic policy reforms, particularly for countries such as Vietnam (the WTO is critical of Vietnamese labor rights and intellectual property rights standards), by enforcing higher policy standards and liberalizing trade
Obama supports TPP negotiations as the leading trade policy initiative of the Obama administration, and part of the administrations pivot to Asia

President Barack Obama

Source: International Trade Administration; Office of the U.S.Trade Representative, Ian F. Fergusson,William H. Cooper, Remy Jurenas, and Brock R.Williams, The Trans-Pacific Partnership Negotiations and Issues for Congress, Congressional Research Service, April 15, 2013.

TPP Could Have Large-Scale Impact on U.S.Trade


$ 8B $ 7B $ 6B $ 5B $ 4B $ 3B $ 2B $ 1B $ 0B 2001 2002
Australia, Chile, Peru & Singapore Brunei, Malaysia, New Zealand, & Vietnam Other Countries Other APEC* China Japan Total U.S. Trade (100%) Potential TPP (62%) Current TPP (34%)

U.S. World and TPP Goods Trade (In billions of U.S. dollars)

Canada & Mexico

2003

2004

2005

2006

2007

2008

2009

2010

2011

Analysis The TPP could have a significant impact on U.S. trade because potential TPP members account for 62% of U.S. trade; confirmed TPP members account for 34% of U.S. trade Certain industries that export to TPP countries will be impacted; the major U.S. merchandise exports to TPP countries are machinery (e.g., computers, turbines, and agricultural equipment), electrical machinery (e.g., integrated circuits, semiconductors, and cell phones), autos, and refined petroleum products
* China, Hong Kong, Indonesia, South Korea, Papua New Guinea, Peru,The Philippines, Russia,Taipei, and Thailand Source: International Trade Administration; Office of the U.S.Trade Representative, Ian F. Fergusson,William H. Cooper, Remy Jurenas, and Brock R.Williams, The Trans-Pacific Partnership Negotiations and Issues for Congress, Congressional Research Service, April 15, 2013.