Top Stories

Pacific trade zone expansion faces legislative hurdles

FORUM Staff

If it becomes a reality, the Trans-Pacific Partnership (TPP) will lower trade barriers between a dozen Pacific Rim countries that encompass two-fifths of the global economy. It will create the world’s largest free trade area, essentially setting the rules for 21st-century trade and investment.

First, the landmark agreement must be approved by lawmakers in all 12 countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Trade ministers struck the deal October 5, 2015, starting a countdown in which lawmakers have 90 days to review the agreement and give it an up-or-down vote. The deal will almost certainly encounter stiff opposition in the coming months, according to an analysis by The New York Times newspaper. In the U.S., it’s likely to become a flashpoint of 2016 presidential politics.

If the Pacific trade partnership gets rolling, several other countries in the Indo-Asia-Pacific region have reportedly expressed interest in signing up. “Other people will join this agreement,” New Zealand Trade Minister Tim Groser predicted to Reuters.

South Korea is reiterating its interest in the TPP, with its Trade Ministry analyzing the potential impact of signing onto the agreement, according to Yonhap News Agency.

In Thailand, “We are very interested, but we must weigh the advantages and disadvantages carefully,” Deputy Prime Minister Somkid Jatusripitak told the Bangkok Post newspaper.

The Philippines is committed to joining, then-Trade Secretary Gregory Domingo announced in June 2015, according to The Diplomat magazine.

However, Indonesia has expressed no clear interest in joining the trade bloc, The Wall Street Journal newspaper reported.

The Pacific accord would phase out thousands of import tariffs and other barriers to international trade. It also would establish uniform rules on corporations’ intellectual property and open the Internet even in communist Vietnam, according to The Associated Press.

The massive trade partnership would also put pressure on China — not one of the 12 TPP nations — to shape its behavior in commerce to TPP standards, according to an analysis by Agence France-Presse.

The deal means specific things to several countries in the region:

  • Australia would be allowed to export an additional 65,000 tons of sugar per year to the U.S. That’s on top of the 87,000 tons it already exports, Reuters reported.
  • New Zealand, home to the world’s biggest dairy exporter, Fonterra, would gain new access to markets in Canada and the U.S.
  • Tariffs on Japanese autos exported to North America would slowly be phased out, The Associated Press reported.
  • For the first time, state-owned businesses like those in Vietnam and Malaysia would be required to comply with commercial trade rules and labor and environmental standards.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button