TPP Trade Deal: Who Stands to Gain, Suffer in Asia-Pacific

According to the article, (http://www.bloomberg.com/news/articles/2015-10-06/tpp-trade-deal-who-stands-to-benefit-suffer-in-asia-pacific), the TPP deal sealed Monday in Atlanta will bring various gains and losses to the countries involved, as follows:

  • Japan: Japanese car and auto-parts makers may be the biggest winners, as they gain cheaper access to the US, the industry’s largest export market. During negotiations, Japan was forced to reduce some of the protections granted to its rice farmers, creating a non-tariff import quota of 1% total consumption, while livestock farmers may be hit harder, as tariffs on beef will be cut from 38.5% to 9%.
  • Australia: The TPP deal will remove approximately $9 billion of import taxes from Australian trade, and they will gain access to the US sugar market. Additionally, the cut in the beef tariff will help Australian ranchers, and seafood and most horticulture products will see tariffs dropped as well. Furthermore, Australia and New Zealand successfully pressured the US to compromise on the amount of time that pharmaceutical companies will get to monopolize new biotech drugs, which could lead to cheaper drug prices and more competition.
  • New Zealand: Tariffs are due to be eliminated on 93% of New Zealand’s trade with its TPP partners, representing annual savings of approximately $259 million New Zealand dollars, with the Dairy industry seeing savings of approximately $102 million New Zealand dollars per year. Additionally, tariffs on beef exports will be completely eliminated, with the exception of Japan, where they will drop from 38.5% to 9%.
  • Vietnam: Vietnam will be among the biggest winners, with GDP being boosted approximately 11% and exports growing 28% in the next ten years. Reduced imports in the US and Japan will benefit the country’s apparel manufacturers and the fishing industry will benefit from elimination of import tax on shrimp, squid, and tuna. Eliminating import taxes on pharmaceutical products, however, will lead to tougher competition between domestic Vietnamese companies and foreign companies. The TPP will also increase patent protection, restricting Vietnamese companies’ access to new products as well as inhibit their ability to produce new drugs.
  • Malaysia: State-owned enterprises in Malaysia may suffer from the TPP deal, which calls for equal access to government procurement, however electronics, chemical products, palm oil, and rubber exporters are among beneficiaries.
  • China: Since China failed to join the TPP, they are likely to be among the biggest losers, and are now indicating some interest in joining the TPP in the future. In the meantime, Chinese exporters may lose some market share in the US, Japan, and Vietnam. To combat these losses, China will try to reach more free-trade deals with other countries, especially in Asia.

Stephen Harper says TPP deal ideal for Canadian Economy

Canada’s economy will be profited largely by significant drops in tariffs in the North American auto industry and by nudging Canada’s agricultural sectors towards greater international trade. Conservative leader Stephen Harper says the deal protects Canadian jobs and creates more for the future generations as it secures access to hundreds of new customers in the Asia-Pacific region.

Canadian officials have been briefing media over the possible opportunities for them from the TPP deal. For example, tariff rates on Canadian beef exports to Japan will be lowered to an astonishing 9% from 38% for the next 15 years. Also other tariffs on commodities like canola, fish and seafood, forestry and industrial goods will be eliminated or lowered across the TPP region in phase-in period of 5-15 years.

However, the deal means aspects of NAFTA changes to 60% of parts and vehicles sold tariff-free to be manufactured in North America. In order to qualify as tariff-free under TPP, 45% of net cost of the vehicle needs to originate in TPP countries. For auto-parts, 45% of core parts and priority parts and 40% of others parts need to originate in TPP countries. Canada granted new access for TPP countries for its agricultural sector.

With the implementation of TPP, two programs will be available to farmers that incur potential losses; a 15-year $2.4 billion income guarantee program and a 10-year $1.5 billion quota value guarantee program. A $450 million program to support improvements to Canadian dairy, poultry and egg processing facilities is also available. Cabinet has also approved a $15 million market development fund to help the supply-managed agriculture sector promote Canadian products, bringing the total price tag to $4.3 billion for the suite of transition assistance on offer.

So its all smiles for Canadian economy, but each country needs to ratify the final text, and in Canada it will take the form of a vote in Parliament.

Full report: http://www.cbc.ca/news/politics/canada-election-2015-tpp-agreement-atlanta-1.3254569

Pacific Trade Ministers Aim to Seal TPP Trade Pact

According to the article (http://news.yahoo.com/pacific-trade-ministers-aim-seal-tpp-trade-pact-050700679–finance.html), top trade representatives of 12 Pacific Rim countries are hoping to finalize the TPP agreement this week following the failed negotiations that occurred in Hawaii earlier this year.

A handful of issues hindered the talks in Hawaii, including US treatment of Japanese auto-parts, the length of patent protections for biologic drugs, and open markets for dairy products from major producers.

While prospects look good that the deal could be sealed this week, nothing is certain. Vocal public groups are raising objection to several issues under discussion, and there have been multiple demonstrations protesting the TPP in both Canada and New Zealand.

Nonetheless, if a deal is struck, it could become a model for an even larger agreement, the Transatlantic Trade and Investment Partnership (TTIP) that Washington is negotiating with the European Union.

Trans-Pacific Partnership: It’s Not Just About Chickens and Milk

This article (http://globalnews.ca/news/2244890/trans-pacific-partnership-its-not-just-about-chickens-and-milk/) outlines what the TPP is, why it matters, and what the federal parties are saying about it.

First, the TPP has been in the works for nearly a decade, and will touch on a variety of matters related to the economic policy of twelve countries on four continents. When it is signed, the TPP’s members will account for 40% of global GDP.

The TPP has been particularly contentious in Canada, one of its potential members, because it could mean an end of supply management in their dairy and poultry industries, which restricts the amount of milk, cheese, eggs, and poultry that farmers are permitted to produce. Although Canada has been repeatedly reassured that their supply management will survive, Canada is apprehensive to agree to the deal. However, there is evidence that if Canada does not relax its stance on the issue, they may be excluded from the TPP.

Additionally, the auto sector is bracing for possible changes that may come with the TPP. In particular, Japan has been pushing for more lenient rules to allow Japanese-made vehicles into North America duty-free, with fewer Canadian-made parts.

Furthermore, the TPP could give internet service providers new power to disable or block websites that violate copyright laws. It may also bring an end to rules that block cross-border transfers of data via the internet, or require sensitive personal data to be stored on servers within national borders.

Finally, signing the TPP will likely require multiple concessions from Canada, but conservatives argue that it will open up numerous foreign markets in which Canada had not previously been able to invest or export. The conservative party has relentlessly defended Canada’s participation in the deal, but could lose traction in its re-election campaign if the final TPP agreement hurts the dairy, poultry, or manufacturing industries.

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?

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.

U.S. seeking TPP ministerial meeting in late Sept

The article published on The Mainichi (http://mainichi.jp/english/english/newsselect/news/20150909p2g00m0bu024000c.html) shares that Japan and the United States will resume bilateral talks on auto trade issues under the 12-country Trans-Pacific Partnership trade initiative in Washington from Wednesday i.e. 09/16/2015. The moves follow a ministerial meeting of all 12 TPP countries in Hawaii in late July at which they failed to secure a broad agreement. Japan is also expected to hold working-level talks with Canada and Mexico as well. There could also be multilateral sessions among the four countries as reported by the foreign ministry.

Akira Amari, Japan’s minister in charge of TPP negotiations hopes that the next ministerial meeting be held by end of September and says that if the talks are delayed, they cannot reach a deal before general election in Canada slated for October.

Observers say that the meeting between US and Japan are unlikely before a summit meeting of the Asia Pacific Economic Cooperation forum in November, where the TPP chiefs gather.

Will here be a ministerial meeting at the end of September to continue talks or the deal will be halted till the Canadian general election ? Can Japan and US resolve the auto trade talks ?