UPDATE: As of November 5, the full text of the Agreement is now online.
Frustration with the snail pace of multilateral trade negotiations has compelled many countries to shift their focus to pursuing bilateral and regional trade agreements. The most notable of these is so-called “mega regional trade agreements” like the Trans-Pacific Partnership (TPP) Agreement which was finally agreed to on October 5, 2015. Agreements like the TPP are considered mega regional trade agreements not just because of the multi-regional scope but in their ambitiousness.
The Ministers released a Joint Statement confirming the successful conclusion of the agreement and noting that:
“In addition to liberalizing trade and investment between us, the agreement addresses the challenges our stakeholders face in the 21st century, while taking into account the diversity of our levels of development. We expect this historic agreement to promote economic growth, support higher-paying jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and to promote transparency, good governance, and strong labor and environmental protections.”
While some argue regional trade agreements pose a threat to the multilateral system, there is much merit to the school of thought that they can be used as a stepping stone for developing multilateral rules on difficult areas. Additionally as per WTO rules, the TPP will have to be notified to the WTO and will be subject to its provisions and procedures, including review by WTO members.
According to the Summary of the TPP released on the USTR’s site, the framers of the TPP argue it is a 21st century agreement due to five main factors: comprehensive market access, regional approach to commitments, addressing new trade challenges, inclusive trade and a platform for regional integration.
The agreement is contentious particularly in the US and Canada which are currently in the midst of election campaigns. The TPP has received objection from a myriad of civil society groups due to portions of the text leaked by Wikileaks and the secrecy of the negotiations. Among the major objections being made include the potential impact on workers’ rights, environment regulation and the perceived threat investor protections may have on Governments’ policy space and regulatory flexibility.
The official text of the TPP has not yet been released, neither has the US Congress ratified the Agreement as yet. However, we do know that the TPP will be significantly WTO-plus in much of its scope and provisions. The devil is in the details and until an official text is released, a lot of the objections are just conjecture and speculation.
Here are some general facts:
- The Agreement creates a free trade zone comprising 12 Pacific-Rim ( Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam), spanning four continents: North America, South America, Australia and Asia
- The TPP has 30 chapters and was negotiated as a single undertaking encompassing a wide array of issues, including market access for goods,services, labour, intellectual property, technical barriers to trade and textiles, inter alia.
- The Agreement plans to be a modern 21st trade agreement, which provides modern rules for current trade realities. As such, it includes rules on new and emerging trade issues like e-commerce, the environment, telecommunications, financial services, investment, government procurement, state-owned enterprises,small and medium sized enterprises, and competition law.
- The agreement was initially to be completed in 2012 but delays arose due to disagreements around contentious issues.
- There were 19 rounds of formal negotiation rounds followed by TPP Ministers’ meetings and Officials’ meetings.
- The TPP will comprise 40% of global GDP and encompass a population of about 800 million people.
Like everyone in the trade world, I look forward with bated breath to the public release of the official text!
Alicia Nicholls, B.Sc., M.Sc. is an international trade and development consultant with a keen interest in sustainable development, international law and international relations.