TPP at a Glance

The article publishes by the Wall Street Journal on 30th April 2015 (http://blogs.wsj.com/briefly/2015/04/30/trans-pacific-partnership-at-a-glance/) summarizes the TPP deal and all its pros and cons.

It talks about the ten major things about the TPP. They are as follows:

  1. Japan and US are the main economies of this deal: The other nations are included to represent 40 % of the GDP
  2. China is not included : The US wants to write its own rules for trade domestically so that China will not impose its own system.
  3. Tariffs and Quotas would be reduced: US is hoping Japan will open up its highly restricted agricultural markets in exchange for the U.S. cutting tariffs on cars and auto parts.
  4. Lots of Rules and some controversial : Officials are looking to goose trade and foreign investment in other ways, including through strong intellectual property protections on everything.
  5. Cannot shake the US economy: U.S. exports, especially agriculture, will become more competitive, and other key industries such as high-tech services and finance could get a boost.
  6. Could boost US output by 0.4% : Prediction has estimated a lift to GDP of 0.4% by 2025.
  7. Fast track needed to get it passed
  8. Auto Industry is upset:  Some worry about U.S. tariffs on Japanese cars and parts disappearing, but most are insisting that the agreement include a mechanism to prevent Japan and other countries from manipulating their currencies.
  9. Unions are upset: Unions say the deal will give companies opportunity to outsource jobs and production to countries such as Vietnam that have lower wages and standards.
  10. No one knows when it will be completed.

For more information, Go through the link for the article provided.

Canadian Leader Harper says auto industry won’t like all TPP reforms

The article published by CBC on 18th September  (http://www.cbc.ca/news/canada/windsor/trans-pacific-partnership-harper-says-auto-industry-won-t-like-it-all-1.3233779) states that According to Leader Stephen Harper, the Canadian auto industry may not be happy with all the elements of the TPP.

The TPP will allow Japanese companies to export cars to North America with substantially less North American content than currently required. Canada and Mexico are angry that the United States wants to let Japan export cars to North America with substantial content from non-TPP nations. This could make Canadian and Mexican autos too expensive.

Harper doesn’t want to shut his global supply chains for auto industry and wants to get the best deal as possible for the auto industry.

Negotiations are going to occur at the end of this month, and we will learn more about this issue after the next round of negotiations.

Will the Canadian Auto industry make compromises for opening their auto industry to the world? Or, will they refuse this deal?

Thailand to join the TPP?

The article published in the Diplomat ( http://thediplomat.com/2015/09/does-thailand-really-want-to-join-the-tpp/ ) on 16th September 2015 talks about the idea of Thailand joining the TPP. Thailand’s Deputy Prime Minister Somkid Jatusripitak wants to weigh the advantages and disadvantages of TPP.

The U.S officials have believed that Thailand will eventually sign the TPP and that this news is nothing new.

Thailand have expressed its unequivocal intention under former Prime minister Yingluck Shinawatra back in 2012. Although Thailand could eventually join the TPP, it should focus on the ongoing Regional Comprehensive Economic Partnership (RCEP). Thailand needs to carefully wok their way towards TPP analyzing all the pros and cons. Thailand would still benefit immensely in an overall sense in spite of these sector-specific challenges. Studies predict that Thailand would have the second-largest percentage gains among potential members with a TPP agreement, with incomes rising by 7.6 percent – second only to Vietnam.

Will Thailand go ahead with the TPP or is it just another dead end agreement between the TPP and the government? Will the civilians benefit from TPP?

Is Indonesia ready to join the TPP

In August 2015, Indonesia’s Coordinating Minister Sofyan Djalil confirmed that Indonesia is open to join the Trans-Pacific-Partnership trade agreement. He said that many in Asia didn’t believe that President Obama will get the mandate and also very optimistic that TPP is very close to reality

http://thediplomat.com/2015/08/is-indonesia-really-open-to-joining-the-tpp/

Indonesia is seeking to improve its international trade and weak exports and standstill economic growth. Seeing its neighbours like Malaysia and Vietnam joining the TPP has triggered Indonesia to take a step towards TPP. It seems that they will gain significant export advantages under the agreement at Indonesia’s expense and even more if Thailand and Philippines join the agreement. According to Peterson Institute for International Economic, Indonesia can really gain around 20% export rise and income gains of 2.5% by 2025.

But still it is unclear whether their interest in TPP will translate into any action before the agreement is signed. Indonesia is mainly focusing on agreements which will definitely give them gains with low effort in Regional Comprehensive Economic Partnership(RCEP)- a free trade agreement between ASEAN, Australia, China, India, Japan, South Korea and New Zealand and also with European Union.

Some experts say that TPP is a high standard so Indonesia might prefer to pursue it in the future rather than now. However, they argue that the country should focus on boosting its competitiveness by opening up and undertaking restructuring in areas like IP, environmental protection, and labor reforms, which means that they are serious about TPP. So will Indonesia join the TPP in the near future?

TPP to get resolved by this month’s end

The article by Nikkei (http://asia.nikkei.com/Politics-Economy/International-Relations/TPP-nations-to-tackle-sticking-points-at-month-s-end) on 18th September talks about the meeting between the ministers regarding the TPP and how they will resolve all the disagreements before this month’s end which will resolve issues in the areas of dairy products, automobiles, intellectual property for pharmaceuticals, and other areas where national interests are at stake.

Dairy rules are not clear yet since July’s meeting in Hawaii. New Zealand wants to expand its dairy products, but Japan and Canada don’t have the ability to accept imported dairy products.

Japan disagrees with Mexico and Canada over auto parts despite their talks with the United States. Japan wants tariffs removed on autos, but Mexico and others seek to restrict duty-free imports to vehicles and parts made over 50% from components originating in TPP nations.

The U.S. is pushing for as lengthy a time frame as possible, giving drug companies the ability to profit longer from proprietary medicines. Australia and others seek a shorter period to enable the rapid development of cheaper generics.

Time is running out for the nations, and they need to come to an agreement as soon as possible for the TPP to get started with. They will need deadlines in order to make progress with their talks.

Why the TPP main game is rebooting trade for the E-commerce age

While likely to hinge on to old-style trade questions such as tariffs and quotas, the main game is freeing up the flow of data across borders according to John Garnaut, Fairfax Media’s Asia Pacific editor.

Data is actually where the cutting edge of protectionism is these days.

This importance of data security and freedom of data being exchanged came into the limelight when huge companies such as Google, Facebook and eBay began packing up or being evicted from the Chinese market place.

“China has restricted market access with a number of digital service companies including Google and eBay, and that’s one of the reasons why Alibaba and Baidu have become dominant players,” says author Stephen Ezell, at The Information Technology and Innovation Foundation, an industry body that has had a hand in shaping data chapters of the TPP.

China will not be a founding member of the TPP, but it forms a large part of the backdrop. It is the stand-out example of how political security and industry protectionism can tilt the playing field in the absence of enforceable global norms, but it’s certainly not on its own.

More about this could be accessed from the Sydney Morning Herald article: http://www.smh.com.au/business/world-business/why-the-tpp-main-game-is-rebooting-trade-for-the-ecommerce-age-20150728-gimfkd.html

Mexico and the TPP

The article “Mexico Invited to Trans-Pacific Partnership Agreement Negotiations” (http://www.economia.gob.mx/news-and-events/press-room/headlines/8214-boletin-136-12en) explains why Mexico was welcomed into the agreement and how Mexico will influence the TPP. The article summarizes that Mexico will “contribute to the goal of creating a 21st Century agreement which will drive growth and economic development and promote innovation, benefiting our consumers and supporting the generation and retention of jobs, raising living standards and reducing poverty in participating countries in the Asia-Pacific region”. Likewise, the article reviews the effect that the TPP can have for Mexico which the article states are twofold. It states, “Entry to the TPP gives Mexico a great opportunity to continue to diversify its exports and markets”. Over the past six years the growths of exports from Mexico to Asia have passed 20%, and the TPP would only bolster this growth. Will the growth of exports from Mexico affect the ability of other countries to likewise see growth in their exported products? How would the supply chain industry be affected by such growth in exported products?