THE TRANS-PACIFIC STRATEGIC ECONOMIC PARTNERSHIP
The Trans-Pacific Strategic Economic Partnership [TPP] is a regional free-trade agreement between New Zealand, Singapore, Chile and Brunei Darussalam that entered into force in May 2006.
It is the first trade pact to involve a group of Pacific Rim countries, and is the first multi-party trade agreement to link Oceania, Asia, and Latin America. It was specifically designed to permit other APEC countries to join and to serve as a pathway to broader Asia Pacific-wide trade liberalization and integration.
Broadly defined, the objective of the "Comprehensive Trans-Pacific Strategic Economic Partnership" is to tear down trade barriers among participants within a decade. Under the agreement, tariffs on all trade products are to be eliminated within 12 years, with tariffs on 90 percent of trade in goods among the parties eliminated immediately. Source: New Zealand Ministry of Foreign Affairs and Trade: Trans-Pacific Partnership Booklet.
Strategic importance of Asia-Pacific marketplaces
The Asia-Pacific region is a key driver of global economic growth, representing nearly 60 percent of global GDP and roughly 50 percent of international trade. The average GDP growth rate in the rapidly growing and dynamic countries in this region was 5.3 percent in 2007, compared with the world average of 3.8 percent. Since 1990, Asia-Pacific goods trade has increased by 300 percent, while global investment in the region has increased by over 400 percent.
US participation in TPP
In February 2008, the United States announced that it would enter into negotiations with the TPP on financial services and investment issues only. However, the United States also indicated that it would begin domestic consultations exploring the possibility of full and comprehensive participation in the TPP agreement.
In September 2008, US Trade Representative Susan Schwab (pictured) announced that the United States would be entering into negotiations to join the full TPP. The US decision to join the negotiations could in time be seen as a step toward the stalled initiative within the 21-member Asia-Pacific Economic Cooperation (APEC) forum to forge a Free Trade Agreement of the Asia Pacific.
Referring to the TPP, Schwab stated:
"This high-standard regional agreement will enhance the competitiveness of the countries that are part of it and help promote and facilitate trade and investment among them, increasing their economic growth and development.
"While the United States is the first additional country to seek to join the four original members of the (agreement), we are confident that other countries in the region will ultimately embrace the benefits of participation," she said.
Press release: United States Trade Representative Statement.
Following the US announcement, Australia, Peru and Vietnam indicated that they will join the negotiations scheduled to begin in March 2009 in Singapore. 74 Fed. Reg. 15, pp 4480-4482, 01/26/09.
Congressman Jim McCrery, Ranking Member, Committee on Ways and Means and Congressman Wally Herger, Ranking Member Committee on Ways and Means, Trade Subcommittee offered the following comments on the announcement that USTR will launch negotiations to join the Trans-Pacific Strategic Economic Partnership:
Congressman McCrery stated, "We applaud Ambassador Schwab for taking this important step to advance the U.S. trade agenda. This negotiation represents an important opportunity to work with other countries in the Asia-Pacific region to open markets to U.S. exports. This agreement can be a launching pad for increased exports not only to Chile, Singapore, New Zealand, and Brunei, but also to other countries who may join the regional economic partnership. The Trans-Pacific region accounts for nearly 60 percent of world GDP and almost half of all global trade. During this time of economic uncertainty, rapidly growing U.S. exports have accounted for the majority of America�s economic growth. The United States should be taking every opportunity to open markets to American-made goods and services to help sustain this growth." Press release: Ways and Means Committee.
US Corporate Support
US Businesses and Trade Associations have voiced strong support for the Trans-Pacific Agreement.
Myron Brilliant, vice-president for Asia at the US Chamber of Commerce wholeheartedly supported the announcement, stated:
"We hope this agreement will boost opportunities for American companies. The Asia-Pacific nations have negotiated over 150 preferential trade agreements between themselves and their trading partners. Unfortunately, most of these don't include the United States. Today we are sending an important message that we will not be missing in action, which is particularly important to our companies in light of the current financial markets."
US Chamber of Commerce
National Association of Manufacturers
National Foreign Trade Council
Emergency Committee for American Trade