Overview of the Trans-Pacific Partnership (TPP)
The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The goal is to reach agreement on a “comprehensive and high-standard” FTA that will liberalize trade in nearly all goods and services and include commitments beyond those currently in place under the World Trade Organization (WTO).
History of TPP
The Trans-Pacific Strategic Economic Partnership, as it was originally known, was conceived in 2003 by New Zealand, Singapore, and Chile as a path to trade liberalization in the Asia-Pacific region. Brunei joined negotiations in 2005, and the Trans-Pacific Strategic Economic Partnership (known as the P-4) agreement was concluded in 2006.
In March 2008, the United States joined the negotiations to conclude the still outstanding investment and financial services provisions. President George W. Bush notified Congress of his intention to negotiate with the existing P-4 members on September 22, 2008, and with other countries, Australia, Peru, and Vietnam, on December 30, 2008.
After a period of reflection, the Obama Administration decided to continue with the TPP negotiations. On November 14, 2009, President Barack Obama committed the United States to engage with the TPP countries “with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st -century trade agreement.”
President Obama formally notified Congress of his Administration’s intention to enter into negotiations with the TPP countries on December 14, 2009. That notification set off a 90-day timeline under the now expired 2002 trade promotion authority (TPA) legislation, for congressional consultations prior to the beginning of negotiations.
In October 2010, TPP participants agreed to by consensus to the inclusion of Malaysia as a negotiating partner.
The negotiating partners announced a framework for the agreement at the sidelines of the Asia-Pacific Economic Cooperation (APEC) Ministerial in Honolulu, HI, November 8 – 13, 2011. At that time, Canada, Japan, and Mexico started to consult with the existing TPP partners on joining the negotiations, and the United States Trade Representative announced a 90-day comment period for those three countries on December 1 and 7, 2011.
After several months of bilateral consultations with each of the current TPP countries, the TPP countries agreed by consensus to the inclusion of Mexico and Canada in the talks on June 18 and 19, 2012, respectively, pending the successful conclusion.
Mexico and Canada began participating as negotiating partners in the December 2012 round in Auckland, New Zealand.
Fifteen rounds of negotiations have taken place with the 16th scheduled for March 4 – 13, 2013, in Singapore. Two more negotiating rounds will be scheduled this year prior to the October 2013 APEC summit in Indonesia, the current target for reaching an agreement.
For this deadline to be achieved, outstanding negotiating positions may need to be tabled soon in order for political decisions to be made.
In addition, bilateral consultations between the TPP parties and Japan on its interest in joining the talks continue. Thailand also formally expressed its interest in joining the negotiations during President Obama’s trip to the country in November 2012.
If concluded as envisioned, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries.
The TPP serves several strategic goals in U.S. trade policy.
– It is the leading trade policy initiative of the Obama Administration, and is an important element in strengthening U.S. strategic and economic interests in the Asia-Pacific region.
– It provides a new set of trade negotiations following the implementation of the bilateral FTAs with Colombia, Panama, and South Korea and an alternative venue to the stalled Doha Development Round of multilateral trade negotiations under the WTO.
– It could shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. FTA partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy — possibly providing impetus to future multilateral liberalization under the WTO.