Pacific Trade Deal Finalized

One of the largest trade deals for many a year has been agreed between Pacific nations at governmental level, however, before it comes into force it may have a tricky passage through some parliaments. The Trans-Pacific Partnership (TPP) has been agreed by the governments of twelve Pacific nations and includes Japan, Australia, New Zealand, USA and Canada. It is estimated that the bloc would be responsible for approximately 40% of global trade, so it is a big deal indeed. The total population of the bloc is some 800 million people and the other signatories are: Malaysia, Singapore, Brunei, Mexico, Chile and Peru.

The aim of TPP (as with the majority of trade deals) is to remove barriers to trade, it hopes to create a single market like the EU and to deepen and strengthen ties between its members. Proponents claim it will lead to a slashing of trade tariffs increase trade and boost growth. In principal all goods and services are within the scope of the accord, but some tariffs will be gradually phased out whilst certain services could be exempt altogether in limited areas.

President Obama hailed the new agreement: “This partnership levels the playing field for our farmers, ranchers, and manufacturers by eliminating more than 18,000 taxes that various countries put on our products. When more than 95% of our potential customers live outside our borders, we can’t let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment.”

China is not a member of TPP but may find itself forced to adopt some of its policies to streamline trade with its members.

However, in common with a similar deal being negotiated with the EU, the deal has vocal critics. A major objection is that negotiations were held in camera and that the deal is overly favorable to large multinational corporations, giving them the possibility to take action at a tribunal if a policy decision taken at state level has a detrimental impact on their business. It is likely to face a bumpy ride going through Congress and the Senate in the US.