Thailand could benefit from TPP

New Zealand has suggested that Thailand should consider joining TPP during the public scrutiny process by member states, saying that the partnership will be world’s largest trade agreement. NZ’s ambassador to Thailand said that since Thailand was a strong trading nation and heavily reliant on exports, which accounts for 70% of its GDP, joining TPP would increase trade opportunity and ensure the country’s future growth.

Thailand is moving forward to membership of Regional Comprehensive Economic Partnership (RCEP) which has 16 countries – 10 Asean members, but RCEP can’t compensate for non partnership in TPP, whose market size and larger GDP is much larger.

Thailand should consider joining every trade agreement possible as it is important to benefit from the different angles offered by each pact, and it would help open up opportunity for the Kingdom to increase market access to all. Following the TPP’s implementation, the combined trade of its member economies will double.

For instance, New Zealand has strengths in service businesses such as education and IT, and cooperation under the TPP should help promote those sectors’ growth into other markets while other service businesses will need more investment from other countries to help develop their growth. Meanwhile in regard to bilateral trade between Thailand and New Zealand, Levermore said that almost 10 years from the implementation of their free-trade agreement, he expected there would be a revision of the FTA to promote more trade and investment growth on both sides as well as leveraging closer cooperation in many sectors.

New Zealand’s special agricultural trade envoy, Mike Petersen, said that under the bilateral FTA he expected that Thailand and New Zealand would tighten their cooperation in many sectors, particularly in agriculture as New Zealand has high expertise in the industry. Since New Zealand has high expertise in five key agricultural sectors – dairy products, beef, sheep, farming and wine – the country foresees closer cooperation with Thailand as well as more trade and investment for both sides.

New Zealand could also help transfer technology and know-how in quality agricultural production and improve capacity for Thai farmers which would in turn increase consumer satisfaction according to Petersen. Bilateral trade amounted to about Bhat 60 billion last year.

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Canada and Mexico seek concession on auto rules in TPP

Canada and Mexico are looking for a compromise on auto-sector rules in TPP as they try to bridge the gap with Japan. Seeking these changes would boost their domestic content requirement for the most sophisticated of car parts. The TPP deal would eclipse the North American free-trade agreement in importance and reduce the level of domestically made auto parts in vehicles sold in Canada but also boost the access granted to Japan.

Canada and Mexico were very disappointed in the Maui meeting where Japan and US struck a deal to lower domestic content. In Atlanta, the Japanese agreed to raise it to 35% from 30 of the parts to be made locally under TPP. The United States and Japan are the biggest players in the TPP.

Sources familiar with the TPP talks say Ottawa has secured the removal of tariffs of as high as 5 per cent that other TPP countries currently apply to Canadian aerospace goods, such as engine aircraft parts shipped to Australia or aircraft seats sold to New Zealand. Canada has also obtained a commitment by other TPP countries to strike tariffs, again as much as 5 per cent of which is slapped onto Canadian manufactured goods such as medical, surgical or laboratory machinery.

Canada is at the center of two major obstacles that have delayed the final agreement including dairy and most importantly autos. An agreement will almost certainly expose the Canadian auto-parts sector, which employs 80,000 people, to far more foreign competition and erode the preferential position that the industry enjoys under NAFTA.

It will also open up Canada’s dairy industry, currently protected by high tariffs, to significantly more foreign imports. Canadian beef, pork and canola producers are big winners in the final TPP deal because the agreement as drafted has significantly lower barriers to selling products in Japan.

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TPP will ‘advance human rights’

A State department official told that TPP will greatly aid the efforts to advance human rights in the Asia-Pacific region. The TPP will contain new labor and environmental standards, protects the IP of multinational companies and prioritizes “transparency and anticorruption” and also contains “enforceable standards” with regards to human rights.

Brunei, a part of TPP, last year began to implement a new legal code based on Sharia law that punishes those convicted of homosexuality by stoning to death. Malaysia also has history of conviction based on freedom of people like former Deputy Prime Minister Anwar Ibrahim’s conviction under country’s anti sodomy law.

Jerame Davis, executive director of Pride at Work, said that it is inexcusable giving countries access to the markets without ensuring most basic human right protections for the citizens. Davis also argued against TPP because it would increase cost of antiretroviral drugs to treat HIV and make less available to these countries. Neela Ghoshal, senior LGBT researcher for Human Rights Watch told that there is no evidence that TPP includes any mechanism for promoting LGBTI rights in countries like Malaysia and Brunei. Also, the impacts of increasing the drug prices would affect these people who are poor and HIV-positive.

The Human Rights Campaign and the National Centre for Transgender Equality earlier in 2015 urged the White House to require Brunei to address their Human Rights violations ahead of the TPP negotiations. The State Department has criticised Brunei over its new penal code. Former Deputy Defence Secretary told during his speech that they will continue to take global leadership in defending and promoting human rights of LGBTI persons in TPP partner countries and around the world.

Investor State Dispute Settlement in TPP

The Investor-State Dispute Settlement (ISDS) provisions of the TPP have become a subject of controversy in Washington and other world capitals, with some fearing that ISDS could derail the agreement. The TPP has finally been agreed upon but no draft has been publicly shown. The expectation is that ISDS provisions of the TPP will include protections commonly found in investment agreement, including national treatment protections against discrimination, the customary international law minimum standard of treatment, which includes fair and equitable treatment and full protection and security and the freedom to appoint senior management positions regardless of nationality.

Some experts are anticipating innovations in the ISDS chapter of TPP as the U.S. will try to continue to build on reforms and come up with more innovations:

  • Transparency requirements favoring open proceedings and disclosure of filings and arbitral awards
  • Provisions allowing the non-disputing TPP States to make submissions to a tribunal
  • Expedited review of frivolous claims and a mechanism for awarding costs
  • Recognition of the rights of States to regulate in the public interest, including with respect to health, safety and environmental protection
  • New ethics guidelines for arbitrators.

Jeremy Sharpe, partner in Shearman & Sterling, said that the TPP promises both investors and States with new and efficient dispute-settlement procedures that play to Shearman & Sterling’s strenghts handling must-win arbitrations for their clients.

In many states, ISDS will involve complex domestic political battles. Even after it has been agreed by the 12 countries, it still needs to be passed by the lawmakers of those countries. The TPP is also a focal point in Canadian and US election campaigns. Some controversies in Japan and protests in New Zealand have been a part of TPP, and we expect acrimonious debate on many provisions of the agreement.

IP rights chapter of TPP stunts freedom of expression

Wikileaks has released what it claims the full Intellectual Property chapter of the TPP deal which was signed on Monday. This chapter gives the signatory countries greater power to stop embarrassing information going public. This treaty gives ability to curtail legal proceedings of information which is important to party’s economic interests, international relations or national security.

Evan Greer, internet activist director, says that the text of TPP’s IP chapter confirms warnings that this deal poses a threat to global freedom of expression and basic access to things like medicine and information. The rules state that every country has the authority to immediately give the name and address of anyone importing detained goods to whoever owns the Intellectual Property.

TPP is now facing a rough ride through Congress where President Obama’s opponents on the right argue the agreement does not do enough for business while opponents on the left argue it does too much. Obama has pedged to make TPP public but only after the legislation has passed.

Concerns have also been raised over the effect it could have on the cost of medicines – by extending the intellectual property rights of certain branded drugs, delays in the development of cheaper, ‘generic’ versions of these drugs could ensue, potentially leading to poorer people having to wait much longer than the wealthy to get access to the newest medicines.

How TPP impacts agriculture?

The U.S. Trade Representative’s office said that the agreement would eliminate or significantly reduce tariffs on U.S. products and deter non-science based sanitary and phytosanitary barriers that have put American Agriculture at a disadvantage in TPP countries in the past.

President Obama said that TPP will enable sale of more products for agriculture. Currently over 18.000 taxes and tariffs on American products will fall and most of them even to zero. The US exports of agricultural exports to the TPP countries totaled $63 billion in 2014, 42% of the total agricultural products.

Vilsack said that agriculture is going to be a big winner with TPP, and overall it is estimated that US exports could increase to $130 billion making agriculture 9% of total exports. TPP will eliminate import taxes as high as 40% on U.S. poultry, 35% on soybeans and 40% on fruit exports. USDA has done an excellent job of compiling commodity benefits at For state-by-state benefits, visit

The American Soybean Association said that the agreement will eliminate tariffs and other market access barriers and substantially increase access in remaining markets. They are optimistic that soybean products will fare well in the TPP agreement. In Japan, tariffs on soybean which is 13.2 yen/kg currently are eliminated within 6 years, 34% in Vietnam eliminated in 11 years and in Malaysia the 10% tariffs will be eliminated immediately.

Also, other products like corn and wheat will have duty free exports in the TPP countries like Vietnam, Malaysia and Japan in few years.

No increased medicine costs under TPP Agreement

New Zealand will not face increased medicine costs as a result of TPP deal. New Zealand and Australia won’t change their existing policy on biologics as a result of the agreement which has created some negative feedback from American pharmaceutical companies.

New Zealand’s trade minister Groser said that New Zealand will not pay any more for medicines and the cost of subsidy will not go up by a large extent. It will roughly cost $4.5 million in the 1st year to setup the software to provide additional info. And after that $2.5m a year will be the operating costs. Prime Minister John Key was very happy with the deal as he thinks it would give their exporters better access to more that 800 million people with expected financial benefits of NZ$4.7 billion annually.

Fonterra was disappointed by limited gains for dairy in TPPA as several countries refused to remove all blocks to free trade for NZ’s dairy and beef exports. He said TPP was a small but significant step for the sector, and the dairy deal was a long game that would eventually lead to elimination of tariffs on cheese exported to Japan.

Finally, the negotiators agreed on a minimum period of data protection for next-generation biologic drugs of at least 5 years after a deadlock over rights for drug manufacturers. The US had sought 12 years of protection to encourage pharma companies to invest in expensive biological treatments.The outcome is a two-track system with an 8 year protection for biologics and status quo for all other drugs.

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