The Trans-Pacific Partnership
The Trans-Pacific Partnership (TPP) is a trade agreement among twelve Pacific Rim countries concerning a variety of matters of economic policy, which was reached on 5 October 2015 after 7 years of negotiations.
The agreement’s stated goal had been to “promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections.”
Among other things, the TPP Agreement contains measures to lower trade barriers such as tariffs, and establish an investor-state dispute settlement mechanism (but states can opt out from tobacco-related measures).
The United States government has considered the TPP as the companion agreement to the proposed Transatlantic Trade and Investment Partnership (TTIP), a broadly similar agreement between the United States and the European Union.
Historically, the TPP is an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4), which was signed by Brunei, Chile, New Zealand, and Singapore in 2005. Beginning in 2008, additional countries joined the discussion for a broader agreement: Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam, bringing the total number of participating countries in the negotiations to twelve.
TPP agreement includes the following features:
Comprehensive market access-The TPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services and covers the full spectrum of trade, including goods and services trade and investment, so as to create new opportunities and benefits for our businesses, workers, and consumers.
Regional approach to commitments-The TPP facilitates the development of production and supply chains, and seamless trade, enhancing efficiency and supporting our goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic markets.
Addressing new trade challenges-The TPP promotes innovation, productivity, and competitiveness by addressing new issues, including the development of the digital economy, and the role of state-owned enterprises in the global economy.
Inclusive trade-The TPP includes new elements that seek to ensure that economies at all levels of development and businesses of all sizes can benefit from trade. It includes commitments to help small- and medium-sized businesses understand the Agreement, take advantage of its opportunities, and bring their unique challenges to the attention of the TPP governments. It also includes specific commitments on development and trade capacity building, to ensure that all Parties are able to meet the commitments in the Agreement and take full advantage of its benefits.
Platform for regional integration-The TPP is intended as a platform for regional economic integration and designed to include additional economies across the Asia-Pacific region
The TPP reflects the high ambitions of the major countries in rule-making
With tariff reduction no more a major challenge, the major tasks for the TPP are rule harmonisation, achieving coherence and removal of non-tariff barriers.
TPP & India
TPP is bound to challenge India’s businesses in many ways, says our commerce ministry. First, they will erode existing preferences for Indian products in established traditional markets such as the US and the European Union (EU), benefiting the partners to these agreements. Second, they are likely to develop a rules architecture which will place greater burden of compliance on India’s manufacturing and services standards for access to the markets of the participating countries.
