Introduction: The Trans-Pacific Partnership
The Trans-Pacific Partnership (TPP) is a soon-to-be formed trade bloc between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S., and Vietnam that has taken over 10 years of talks to help shape. As a group, these countries have a total combined annual GDP of nearly $28 trillion that represents 40% of the global GDP and one-third of world trade. Most experts believe that the trade agreement will be completed by the end of this summer. Most of the agreement has been kept under secrecy; however two chapters regarding intellectual property and environmental regulations have been published by Wiki Leaks.
After failed trade deals such as the WTO’s Doha Round, the TPP was written in a format that would allow easy adoption by additional Asian nations. The TPP also serves as a potential template to other initiatives underway, like the Transatlantic Trade and Investment Partnership. According to U.S. proponents of the agreement, the TPP will help to support domestically produced exports, enforce fundamental labor rights, and promote protection of the environment. By accomplishing these goals, the pact will increase job opportunities in the service industry not only in the United States, but also in other member countries.
There is also the opportunity for massive economic growth for member countries within the Southeast Asian region, but it will require a great deal of changing already existing trade frameworks. Singapore, for example, has experienced rapid economic growth in the last half-century due to protectionist policies and high tariffs reducing foreign competition. Vietnam and Malaysia too have some of the world’s highest tariff and non-tariff barriers against foreign businesses, so it seems strange that these countries would want to change their policies now. However, according to a study by Peterson Institute, Vietnam could potentially gain the most under the TPP framework. According to DFDL partner Jack Sheehan, “the TPP will allow Vietnam to export apparel to the U.S. at a 0% tariff rate, which will make Vietnamese exports even more competitive.
To learn about some of the expected controversies associated with the TPP, please read our recently posted blog!
Featured Resources
"The Trans-Pacific Partnership (TPP)"
Executive Briefing: The proposed Trans-Pacific Partnership (TPP) is receiving increasing attention in the United States, especially from the business community. Many U.S. businesses support it while others in the U.S. and around the world oppose it. Therefore, it is important to understand what the TPP is designed to do and the reasons for conflicting opinions.
globalEDGE Trade Bloc Insights
The Trade Bloc Insights section of globalEDGE provides in-depth analyses and resources organized by major global trade blocs. Discover statistics and resources to inform you about trade agreements and their economic impact. Read through a detailed history of each trade bloc, a key dates timeline, and a list of member countries for each trade agreement.
Categories: Regional Trade Agreements
Featured Academy
Regionalization and Trading Blocs
The Regionalization and Trading Blocs module provides one with information on: what globalization means, its impact on business, and the forces that are driving it; the advantages and disadvantages of globalization, as well as who is in favor of globalization and who opposes the movement; what the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) are, how they work, and what their history is; the history and purpose of some of the world's largest and most influential Regional Agreements: NAFTA, MERCOSUR, ASEAN, and the EU; and the basic premises of the Free Trade Area of the Americas (FTAA) that is currently under negotiation in North, South, and Latin America. A case study on Quebec’s language laws is also provided.
Doing Business in Southeast Asia
The Southeast Asia module provides one with insight into: the benefits of doing business here and the region’s hot industries; the functions of the Association of Southeast Asian Nations (ASEAN) and its impact on international business; the diversity of Southeast Asian cultures and the impact of foreign civilizations on their development; common business practices; the basic logistics environment, including the characteristics of local distribution; and the obstacles for these countries to achieve economic integration and grow their economies. A case study on the economic integration challenges ASEAN has faced is also incorporated into this module.
globalEDGE Business Beat
globalEDGE Business Beat: Tunga Kiyak
Tomas Hult speaks with Tunga Kiyak, Managing Director of theAcademy of International Business. The interview focused on CORE™ - a Diagnostic Tool created by the International Business Center, at Michigan State University, to assess “organizational readiness” and “product readiness” in an export scenario. CORE™ is a self-assessment tool that will allow you to determine your company's readiness to expand its operations internationally, and ascertain its ability to export a particular product.
globalEDGE Business Beat: Doug Barry
Tomas Hult speaks with Doug Barry, Deputy Director, Global Knowledge Center, International Trade Administration, U.S. Department of Commerce. The interview focused on ITA’s Guide to Exporting, now in its 11th edition, and the long-standing key source for U.S companies on exporting and international trade.
