Ian F. Fergusson, Coordinator
Specialist in International Trade and Finance
William H. Cooper
Specialist in International Trade and Finance
Remy Jurenas
Specialist in Agricultural Policy
Brock R. Williams
Analyst in International Trade and Finance
The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. U.S. negotiators and others describe and envision the TPP as a “comprehensive and high-standard” FTA, presumably because they hope it will liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO). The broad outline of an agreement was announced on the sidelines of the Asia-Pacific Economic Cooperation (APEC) ministerial in November 2011 in Honolulu, Hawaii. If implemented, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries. Congress has a direct interest in the negotiations, both through influencing U.S. negotiating positions with the executive branch, and by passing legislation to implement any resulting agreement. The next round of negotiations will take place in Auckland, New Zealand between December 3-11, 2012.
In Hawaii, the leaders of Canada, Japan, and Mexico also announced that they would seek consultations with partner countries with a view towards joining the negotiations. Canada and Mexico subsequently were welcomed to join the negotiations in June 2012 and became formal members in October 2012. Japan and the TPP partners are conducting bilateral consultations on its possible entrance as well. In addition, Thailand formally expressed its interest in joining the negotiations during President Obama’s trip to the country in November 2012.
The TPP originally grew out of an FTA among Brunei, Chile, New Zealand, and Singapore, which came into force in 2006. Thirteen rounds of negotiations have occurred since the beginning of formal talks in 2010. In addition to negotiations on new trade rules among all the parties, the talks include U.S. market access negotiations—seeking removal of quotas and tariffs on traded products—with New Zealand, Brunei, Malaysia, and Vietnam as well as market access negotiations among other parties. The United States has FTAs in force with Chile, Singapore, Australia, Peru, and with North American Free Trade Agreement (NAFTA) partners Canada and Mexico, although new disciplines may be negotiated in the course of the talks covering issues beyond those in the existing FTAs.
The TPP serves several strategic goals in U.S. trade policy. First, it is the leading trade policy initiative of the Obama Administration, and is a manifestation of the Administration’s “pivot” to Asia. It provides both a new set of trade negotiations following the conclusion of the bilateral FTAs with Columbia, Panama, and South Korea and an alternative venue to the stalled Doha Development Round of multilateral trade negotiations under the WTO. If concluded, it may serve to shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. FTA partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy—possibly providing impetus to future multilateral liberalization under the WTO.
The eleven countries that make up the TPP negotiating partners include advanced industrialized, middle income, and developing economies. While new market access opportunities exist among the participants with which the United States presently does not have FTAs, the greater value of the agreement to the United States may be setting a trade policy template covering issues it deems important and which can be adopted throughout the Asia-Pacific region, and possibly beyond.
Date of Report: November 21, 2012
Number of Pages: 59
Order Number: R42694
Price: $29.95
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