In the article “Peru’s New Leader Champions Trade in the Trump Era” (https://www.ft.com/content/2e2af8ee-b293-11e6-a37c-f4a01f1b0fa1) , an overview is given of Peru’s trade strategy now that the TPP will most likely be stopped. Per the article, Peru’s president Pedro Pablo Kuczynski believes that it is “fundamental that world trade grows again and that protectionism be defeated”. Currently Peru’s top trading partners are China and the US. Although Kuczuynski confirms that Peru’s relationship with the US remains strong, he is “seeking to deepened ties with Beijing”. Additionally, the day after Trump vowed to scrap the TPP, Peru hosted the Chinese president Xi Jinping. Although Kuczynski hasn’t totally given up on the TPP, he stated that Peru is “considering the merits of a rival Chinese initiative, the Regional Comprehensive Economic Partnership”, which is essentially a new TPP reformed to exclude the US. How many countries would wish to participate in such an agreement? Would the US discourage such an agreement? Only time will tell.
If you have been following the Trans-Pacific Partnership you will know that it was signed on February 4, 2016 and is now pending ratification before taking effect. After years of negotiation, what happens now? One of the major concerns moving forward is corruption; how to avoid corruption, and how to respond if it takes place. The article “Anti-corruption Measures In The TPP Agreement” (http://www.livingstonintl.com/global-perspectives/anti-corruption-measures-in-the-tpp-agreement/ contains a great summary of the measures both past and present that will assist in this endeavor.
“Confidence in the rule of law is critical for trade and investment to flourish. Corruption, in particular, is an insidious impairment to effective commercial activity and cannot be tolerated as a cost of doing business.” To help combat this potential enemy, the TPP will employ both past and present policies. Among the past policies to be utilized are the:
- 1977 U.S. Foreign Corrupt Practices Act (FCPA)
- 1999 Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials
- 2003 United Nations (UN) Convention Against Corruption
To support these previously instilled practices, the entire 26th chapter of the TPP, titled “Transparency and Anti-Corruption” is dedicated to this same movement. This chapter specifically addresses topics such as:
- Requiring the publication of laws, regulations, procedures and administrative rulings
- Guaranteeing due process
- Promoting rules against conflicts of interest
It is the hope that the TPP will provide benefits to all countries involved, but its success is dependent on maintain honesty and consistency among all parties involved. As stated in the article, “… the framework for anti-corruption is already in place within the TPP. When ratified and enacted, it will be up to the Parties to eliminate corruption as a trade barrier.”
With the global market as prominent as it is, any major global trading agreement is something to research and understand. The TPP, or Trans-Pacific Partnership, is one of the bigger agreements made in recent history, and one of the major players in this agreement is Peru. What part does Peru play and what are some of the benefits they will get from being a member of this agreement? The article “The TPP will give Peru direct access to markets such as Australia and New Zealand” (http://www.amcham.org.pe/publicaciones/articulos.php?art=3) touches on these questions and dives into their respective answers. Three of the main takeaways with respect to Peru are shown below:
- “Peru will see its exports increase by $3.2 billion by 2025, once the TPP is finalized.
- Peru will now have access to Australia, New Zealand, Malaysia, and Vietnam and their corresponding markets.
- “Many of the benefits will be seen in non-traditional sectors, such as agricultural exports”
With the TPP being such a talking point, especially now during the Presidential debates, it will be interesting to monitor the progress of this agreement, and how Peru actually benefits from being part of this free trade agreement. Will the benefits be the same as this article predicts? Only time will tell.
An article in EconoMonitor (March 21, 2016) titled “TTIP & TPP – A Threat to Latin America?” (http://www.economonitor.com/blog/2016/03/ttip-tpp-a-threat-to-latin-america/) analyzes the impact that the new regional mega-deals will have on different Latin American economies. For years, most Latin American countries have supported their economies on exporting commodities and natural resources. To face the risk that commodities’ prices are variable, these countries have implemented import-substitution industrialization policies, which mean high tariffs to protect domestic industry and discourage imports. With the TPP, it is expected that Peru takes the most advantage of this deal since the agreement could lead to a 2.4% increase in real income. On the other hand Chile and Mexico already have deep trade agreements with most of the TPP members, preventing them from expecting a relevant impact in their economies thanks to the latest commercial deal. Mercosur countries, which are not involved in the TPP agreement, such as Brazil and Venezuela are currently facing economic crisis that need them to reevaluate their access to international markets and enhance their integration in global value chains. Will the TPP members allow any Mercosur country to join the deal in the coming years? How can Chile and Mexico leverage their current position as members of the TPP deal?
The recent trade deal reached between 12 Pacific countries, including the U.S. and Japan, was described as the ‘largest regional trade accord’ in history, in an article by the New York Times. The agreement is hailed as an important first step after two years of intense negotiations. The deal is set to open new markets, protect workers, and preserve the environment. While these 12 countries have an agreed upon deal in place, the next step will be for the agreement to make its way through each participant’s respective legal system. How might the current deal change as it is vetted through the respective country’s political processes? What are some benefits to the new TPP? What are some of the downsides to the new TPP?
According to the article, http://www.bbc.com/news/business-34444799, the Trans-Pacific Partnership (TPP), the biggest trade deal in decades, was struck on Monday after five years of bitter and tense negotiations. The TPP cuts trade tariffs and sets common standards in trade for 12 Pacific Rim countries and covers about 40% of the world economy. However, although negotiations have been finalized, the deal is yet to be ratified by law makers in all 12 countries.
For President Obama, the TPP trade deal is a major victory. He stated: “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.” In opposition, however, US Senator and US Democratic presidential candidate hopeful Bernie Sanders argues that Wall Street and big business have “won again,” stating that the TPP deal will cost US jobs and hurt consumers.
Additionally, China was not involved in the TPP agreement, however the Obama administration is hoping that it will be forced to accept the majority of the standards outlined by the TPP. He was quoted: “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.”
Furthermore, the final round of TPP negotiations were delayed over how long pharmaceutical companies should be permitted to maintain a monopoly on their drugs. The US wanted twelve years of protection, while Australia and New Zealand argued for five. A compromise was reached, however the definitive protection period has yet to be confirmed.
Finally, the auto industry as well as the agriculture industry were also areas of intense negotiations. In regards to the auto industry, countries agonized over how much of a vehicle must be manufactured within a TPP country in order to qualify for duty-free status. Agriculture was another sticking point, as countries such as New Zealand wanted more access to markets in Canada, Mexico, Japan, and the US; Canada wanted to keep access to its dairy and poultry markets strictly limited, however.
Of the various discussions circulating about the TPP, there has been little regarding the environmental impact of this agreement. According to the following article, (http://www.sierraclub.org/lay-of-the-land/2015/09/four-reasons-not-trust-tpp-save-endangered-animals) the TPP will not protect nature in any way. Negotiators claim the TPP will “help protect endangered wildlife like rhinos and elephants.” Author Ben Beachy gives fours clear reasons to not believe this statement. His first claim is deals similar to the TPP that have been signed in the past did not live up to their promises. For instance, years ago President Clinton guaranteed NAFTA (North American Free Trade Agreement) would help protect the environment; however, it turned out to be a catalyst for fossil-fuel agribusiness expansion. There was a deal signed between the U.S. and Peru in 2007 which was said to help promote legal timber trade, yet illegal trade of timber increased.
Beachy goes on to make claims stating that the TPP’s environmental terms aren’t nearly as strict as they should be, its provisions are a major threat to endangered species, and there are alternative solutions to counteract the TPP’s danger toward animal and their habitat, but nothing is being done to limit its power. If the TPP get’s signed this year, it will be interesting to see if it will have a negative impact, and if so, how much of a negative impact it will have on animals’ environment.