Peru and the TPP

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:

  1. “Peru will see its exports increase by $3.2 billion by 2025, once the TPP is finalized.
  2. Peru will now have access to Australia, New Zealand, Malaysia, and Vietnam and their corresponding markets.
  3. “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.

Mexico Reaping Rewards from the TPP

In the article “American Jobs Leaving for Mexico – Ford Motors Just Showed Us What the TPP Will Do to the US Economy” (http://www.dcclothesline.com/2016/02/11/american-jobs-leaving-for-mexico-ford-motors-just-showed-us-what-the-tpp-will-do-to-the-us-economy/) , a recent announcement from Ford Motors is discussed due to the TPP, as well as other future actions that TPP may cause. Per the article Ford Motor Company recently announced plans to manufacture 500,000 vehicles at a new facility in Mexico. This announcement comes at the heels of a similar announcement by General Motors, who announced a $5 billion investment to double its productions capacity in Mexico by the year 2018. Is this caused directly by the TPP? “While the TPP has been touted by politicians as an extraordinary benefit to the US, Mexico’s labor costs will instead help that country’s economy reap the rewards, already evidencing the enormous trade deal’s similarities to NAFTA(the North American Free Trade Agreement), which many have come to view as a disaster for the US”. According to the article, Ford’s announcement comes after negotiations by the United Auto Workers union for more expensive labor contracts. Incidentally, hourly rates in the US are already around five times greater than those in Mexico, and are expected to expand further in the future. Will this trend continue with other auto manufacturing companies? Will it extend to other manufacturing industries as well?

New Zealand and the TPP

In the article “TPP – What You Need To Know” (http://www.radionz.co.nz/news/top/295574/tpp-what-you-need-to-know) , a brief overview of the TPP and its potential benefits to New Zealand are given. What is the TPP agreement again? Per the article it is set as a “set of trade and investment negotiations among 12 Asia-Pacific countries to cut tariffs, improve access to markets, and set common ground on labor and environmental standards and intellectual property protections. Specific to New Zealand, what are the biggest benefits? Citing the article, “agricultural tariffs either disappear of fall sharply, particularly in the heavily protected but lucrative US and Japanese markets”. It is estimated that the elimination of tariffs will save exporters $274 million a year once TPP has been adopted and implemented. With such great financial benefits, what are the possible downsides of the agreement? Some people theorize that the TPP will result in higher prices for medicine, recordings, books, and “other products affected by longer copyright periods”. Likewise, critics say that the TPP will benefit the large corporation, not the consumer. Which is correct? Which will benefit New Zealand more as a whole?

Mexico, Renewable Energy, and the TPP

With the emergence of the Trans-Pacific Partnership, or TPP, there has been both criticism and applause at the new reform and its current endeavors. The article, “The Future of Renewable Energy to TPP Countries” (https://www.commerce.gov/news/blog/2016/01/future-renewable-energy-tpp-countries) highlights one of the potential positive results from adopting the TPP. As stated in the article, “The renewable energy industry remains one of the most dynamic, fast-changing and transformative sectors of the global economy”. Per the article, it is estimated that 60% of “new generating capacity installed” over the next 25 years will be attributed to renewables. This estimation, if proven correct, could result in major economic successes for the TPP-participating countries, one of which is Mexico. While energy reforms make “projecting renewable energy exports to Mexico” difficult, it is potentially the most lucrative future prospect for US renewable energy exports. Currently, wind projects play a major role in the clean energy buildup within Mexico, they lack the full wind supply chain. Due to this, US suppliers are “well positioned to participate in this future growth”. Would it be more beneficial for Mexico to form export agreements with the US, or construct their own wind supply chain? Will labor rights end up playing an issue within this partnership?

New Zealand and the Meat Industry

The article “TPP to Deliver Removal of Tariffs” is an article specific to New Zealand, the meat industry, and the effects TPP has on both. As stated in the article, “in 2014, New Zealand exports of beef, sheep meat, and co-products to TPP countries total $2.4 billion USD. This equated to over one third of New Zealand’s total exports worldwide”. Tariff costs for exports to the TPP countries totaled $94.3 million. It is estimated that through the TPP, an” estimated $72 million in tariff costs” will be saved once fully implemented and operational. Specific to New Zealand, there are three main highlights. The first is the “removal of all tariffs on sheep meat in TPP countries within eight years or less when the agreement enters the force”. The second main requisite is the “removal of all tariffs on beef in TPP countries, except Japan, within 11 years or less from when the agreement enters into force”. Last is the “reduction of Japanese tariffs on beef from 38.5% to 9% over 16 years”. These changes obtained through the TPP will “secure market access and the red meat sector’s competitiveness not only into North Asia but will further integrate New Zealand into the Asia-Pacific regional supply chains”. Are there any potential side effects? Are any other countries in the TPP hurt by the adoption of the TPP?

Mexico, the TPP, and the Footwear Industry

In the article “TPP Will Allow Mexico to Increase Exports” (http://www.worldfootwear.com/news.asp?id=1321&TPP_will_allow_Mexico_to_increase_exports), the relationship between the TPP, Mexico, and the footwear industry are explored. According to Javier Plascencia, the president of the CICEG (Chamber of Footwear Industry of the State of Guanajuato), the TPP will “allow our manufacturing sector in Mexico to increase its exports, mainly to the nations with which we did not have a free trade agreement previously signed”. According to Plascencia, the TPP provides Mexico with the opportunity to be the footwear production center for many of the TPP members. According to statistics presented by the Ministry of Economy of the Federal Government, the TPP will “create an additional 30% of international trade for Mexico within the next five years, which represents around 150 billion USD”. For this to occur, Plascencia proposed a few key factors, the first of which is the adoption of a “more aggressive industrial policy …by the federal government to strengthen Mexican businesses and provide a more effective international trade promotion”. Additionally, Plascencia explains that “Mexican authorities must work with the private sector so the overall Mexican trade balance maintains its equilibrium and the businesses make the most out of the TPP”. What are the implications for Mexico if it does become a footwear industry leader? Will there be any potential side effects?

The TPP, Mexico, and the US

The article “Trans-Pacific Partnership: Mexico’s Last Chance?” (http://nationalinterest.org/feature/trans-pacific-partnership-mexicos-last-chance-13516) review’s Mexico’s “middle-income” economic status, and how the TPP is poised to bring Mexico to new heights. Throughout the global economy, many countries are struggling to grow. As stated, “China is slowing, Europe rebounds in fits and starts”. Mexico is in need of a “catalyst” to bridge the gap from “middle-income” status to economic powerhouse. The catalyst is the TPP. To start, the TPP was a chance to “renegotiate the North American Free Trade Agreement” without actually reopening it. This is very important as, for Mexico, the economic link between the United States and Mexico is one of the most important factors in the TPP agreement. As about 70% of its exports head to the United States, Mexico is in need of joining the TPP to share and continue this export market. Likewise, Mexico could potentially be a viable option for outsourced manufacturing from the United States. Mexico’s “ability to deepen its position in global supply chains and manufacturing gives it a unique ability to gain share in a global economy with few real growth areas”. If all goes according to plan, Mexico may be ready to emerge from its “middle-income” status and become one of the world’s major players.