In a recent article in, The Japan Times, the author discusses the need for Japanese farmers to produce cheaper rice. With the signing of the new TPP deal, Japan will see an influx of international products flood their domestic markets. This is especially true in their agricultural sections. The Japanese government is teaming up with local farmers to produce cheaper and more cost effective rice, in an effort to be more competitive in overseas markets. In what ways can Japanese farmers produce a cheaper product? Will this approach work? How may this strategy affect the quality of the rice?
An article in Financial Post (April 26, 2016) titled “Which Canadian agricultural companies stand to reap big rewards from the TPP trade deal” (http://business.financialpost.com/investing/which-canadian-agricultural-companies-stand-to-reap-big-rewards-from-the-tpp-trade-deal) discusses the Canadian economic sectors that will and will not benefit from the TPP, as well as analyzes the agricultural companies that are expected to gain the most from this commercial deal. 65% of the current agricultural exports are destined to TPP members, meaning that the reduction of tariffs associated with this deal is expected to increase additional demand from these trading partners. On the other hand, the TPP is expected to have a negative impact on sectors such as textiles apparel, chemicals and metal products. The National Bank Financial has reviewed the companies in the agriculture space and has concluded that the ones that should gain the most from the TPP include AGT Food and Ingredients Inc. (AGT), Input Capital Corp., Cervus Equipment Corporation and Rocky Mountain Dealership Inc. Will the benefits of the agricultural sector outweigh the tradeoffs that this commercial deal will represent to the Canadian economy?
The article “TPP Procurement: Mexico’s Commitments” (http://trade.djaghe.com/) provides an excellent summary of Mexico’s procurement plans under the new Trans-Pacific Partnership agreement. The article divides these plans into five main segments which are thresholds, coverage of entities, coverage of goods and services, traditional measures, and permanent measures.
- Thresholds: Mexico has decided to mirror the procurement thresholds utilized under NAFTA, a few of which are $79507 for goods and services, as well as $10,335,931 for construction services.
- Coverage of Entities: Similar to the Thresholds section, Mexico has agreed to use the same coverages as are used under NAFTA. Additionally, as in NAFTA, Mexico will not cover any sub-central entities.
- Coverages of Goods and Services: Contrary to Coverage of Entities and Thresholds, Mexico will not follow their pre-arranged coverages of goods and services established under NAFTA, in which, as of 2005, utilizes a negative list of excluded services. Like most parties within the TPP, Mexico plans to use a positive list for goods purchased, while continuing to exclude the same services that are excluded under NAFTA.
- Transitional Measures: Mexico has stated they will utilize the same transitional measures that were applicable to NAFTA between 1994 and 2002. These transitional measures, however, do not apply to Canada, Japan and the US.
- Permanent Measures: Following after Transitional Measures, Mexico plans to mimic the permanent measures used under NAFTA that favor its domestic industry.
While more in-depth information is available in the article listed above, as well as through other sources, this provides a great overview of Mexico’s strategic plan within the TPP, as well as the similarities and differences from NAFTA.
In a recent article in the, Japan Times, the topic of a delayed approval by Japan’s legislature is explored. Due to the recent earthquakes in Kyushu, the Japanese Legislature has pushed back discussion on the TPP to deal with the current national crisis. Because the legislature is not planning to extend the the legislative session, this will delay the TPP approval discussions until parliament is reconvened. Both of Japan’s majority parties will meet to discuss the best solution going forward, with respect to the TPP talks. How might this delay affect the current structure of the deal? How will this impact other TPP members?
An article in The Diplomat (April 20, 2016) titled “The TPP: A Win for Vietnam’s Workers” (http://thediplomat.com/2016/04/the-tpp-a-win-for-vietnams-workers/) describes the relevance that the TPP commercial deal represents for Vietnam’s workers and community. Vietnam has refused to commit to labor requirements until now. The TPP is the first agreement that subjects Vietnam to important labor commitments such as freedom of association, minimum work conditions, and collective bargaining. The TPP parties are required to comply with the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, giving the chance to Vietnam’s workers to finally organize unions independent from the Vietnam’s General Confederation of Labor (VGCL). In this way, it is expected that the TPP will push for a better civil society in Vietnam. What tradeoffs may these actions have on the overall Vietnam’s economy? Will more freedom be translated into more productivity in the country?
South Korea, one of Asia’s strongest countries, was not included in the TPP deal. South Korea has expressed interest in joining the Trans-Pacific Partnership, but until now has not been allowed access. However, as expressed in the recent article “South Korea, Mexico Agree to Restart Free Trade Discussions” (http://www.livingstonintl.com/international-regulatory-updates/south-korea-mexico-agree-to-restart-free-trade-discussions/) there have been recent talks of a trade deal between South Korea and Mexico. President Park Geun-hye visited Mexico in early April, and “hinted at an interest in developing an agreement with her country’s top Latin American trade partner. President Park was also quoted saying “I think it’s meaningful for South Korea and Mexico to sign a free trade agreement to expand trade investment and strengthen economic cooperation.” The logic behind her suggesting is that while Mexico is part of the TPP, the 12-nation trade agreement is still a long way away from being implemented. As stated in the article “with the status of the agreement gummed up in the U.S. Congress and no clear path in sight for the TPP, the Mexican government seems to have decided that a deal with South Korea is worth pursuing.” Once the TPP is implemented, Mexico will have access to various Asian markets, and a free trade agreement with South Korea may not be necessary. How will these trade negotiations affect South Korea’s chances of being admitted into the TPP? Will Mexico receive push-back from other TPP members for these recent negotiation talks? Will this delay the TPP adoption even further? In the case of South Korea, Mexico, and the other TPP members, only time will tell.