TPP in the Spotlight as February Signing Date Approaches
The international debate on the potential merits and pitfalls of the Trans-Pacific Partnership (TPP) Agreement has ramped up in recent weeks, ahead of the pact’s scheduled signing by the participating countries in New Zealand on 4 February.
The English legal “scrub” of the 12-country agreement has now been completed, officials say, with New Zealand releasing the legally verified version of the Trans-Pacific Partnership text on 26 January. An earlier version of the text – prior to the completion the legal scrub – was released in early November. (See Bridges Weekly, 12 November 2015)
As depositary of the agreement, New Zealand will also be releasing the French and Spanish verified versions, once those legal scrubs have been completed.
Meanwhile, leaders from many TPP nations have been ramping up their efforts to build support for the pact, ahead of the start of the two-year ratification window.
“The TPP is much more than a trade deal. The prosperity of the world, the security of the world has been founded on the peace and order in the Asia Pacific, which has been delivered underwritten by the United States and its allies, including Australia,” said Australian Prime Minister Malcolm Turnbull in a joint press briefing with US President Barack Obama last week in Washington.
Obama expressed similar sentiments in his remarks to reporters on 19 January. The US President, who is in the final year of his term, is hoping to win over domestic lawmakers for what is slated to be a difficult ratification vote, particularly given that 2016 is an election year in the US – both for the presidency and for various legislators – and also given the often polarising nature of the trade debate in the North American country.
Obama already urged domestic lawmakers earlier this month during his final “State of the Union” address to ratify the trade deal, warning that failure to do so would lead to other major trading partners – namely China – to “set the rules” in the Asia-Pacific region. (See Bridges Weekly, 14 January 2016)
New Zealand Prime Minister John Key, whose country is hosting the deal’s signing, told reporters last week that he expects the public in his country to ultimately back the deal.
“This is a free-trade deal that gives us access to 800 million middle-income consumers. Its economic benefits are about two-and-a-half times the size of the China FTA,” he said on Monday, in comments reported by the New Zealand Herald, adding that it could help make his country’s businesses more competitive when interacting with those in larger trading partners such as the US and Japan.
Under the terms of the TPP, once the deal is signed participating countries will have two years to completive their domestic ratification procedures. Should all 12 do so within this time, the deal will enter into force 60 days after the window closes.
Otherwise, the TPP outlines alternative scenarios for bringing the pact into force, which depend on the number of economies that have ratified and how much of the group’s GDP they cover. (See Bridges Weekly, 12 November 2015)
TPP participants include Australia, Brunei Darussalam, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore, the US, and Vietnam – a group that makes up nearly 40 percent of global GDP.
Canada confirms signing plans
Canada, which recently saw a major change in government with the election of Prime Minister Justin Trudeau and his Liberal Party, has now confirmed that it will be signing the agreement, while stopping short of outright endorsing it. The TPP negotiations on Canada’s behalf had been conducted by Trudeau’s predecessor, Stephen Harper of the Conservative Party.
“For Parliament to fully evaluate the merits of the TPP and for consultations to continue, Canada needs to stay at the table with the other TPP countries,” said Canadian Trade Minister Chrystia Freeland in an open letter to Canadians on 25 January.
“Just as it is too soon to endorse the TPP, it is also too soon to close the door,” said Freeland, noting that signing the pact is merely a technical step that will allow for the upcoming parliamentary debate, as well as preserving Canada’s status as a full member of the trade pact, “with all of the rights and powers that go with it.”
Canada was one of the latest countries to join the TPP talks, becoming a participant in 2012, along with Mexico. (See Bridges Weekly, 20 June 2012) Japan became the final country to join the existing group, doing so in 2013.
Over the past several weeks, different organisations and government ministries have released studies attempting to quantify the TPP’s potential benefits and costs, which is expected to further fuel the trade debate.
While some reports, such as those from the World Bank, the Peterson Institute for International Economics, and the New Zealand government have highlighted the positive gains from the agreement, while acknowledging also that there will be some adjustment costs that will need to be dealt with, others such as Tufts University’s Global Development And Environment Institute have been more negative in their assessments.
The US International Trade Commission (US ITC), an independent federal agency, is currently preparing its own report on the TPP’s likely impact, as directed by the US Trade Promotion Authority legislation renewed last year. (See Bridges Weekly, 2 July 2015) USTR Froman formally requested the investigation in November; public hearings began earlier this month.
ICTSD reporting; “TPP ‘great for NZ’ claims John Key,” NEW ZEALAND HERALD, 26 January 2016; “TPP will put Malaysia on par with Singapore: Minister,” CHANNEL NEWS ASIA, 26 January 2016; ‘Landmark’ Pacific Rim deal could boost U.S. exports,” WASHINGTON POST, 25 January 2016.