Trans-Pacific partnership: free trade agreement would dwarf NAFTA.

Author:Weddle, Aaron
Position:SPECIAL SECTION: World Trade
 
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At this point in time, it is unclear how the TPP will ultimately affect Alaska, but WTCAK will keep Alaskans up to date as negotiations unfold. Some of Alaska's top trade partners will likely be impacted by the TPP.

The Trans-Pacific Partnership is an Asia-Pacific regional free trade agreement currently under negotiation between the United States and about a dozen countries surrounding the Pacific Ocean. If completed, this trade bloc would dwarf NAFTA in value of U.S. international trade. For Alaskans, this could be an important development because Alaska typically does about 70 percent of its annual overseas exports to Asia.

The TPP is designed to liberalize trade and investment among its partner nations, which currently consist of: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam. It is anticipated that additional Asia-Pacific nations will join in once the agreement is finalized.

Japan and China

Two principal Asian economies are not part of TPP negotiations: Japan and China.

Japan is undergoing strong domestic political debate on whether to join the TPP. The greatest opposition concerns protection of its heavily subsidized-and politically influential--agricultural sector. In the past, this tension has led Japan to require agricultural exceptions in its free trade agreements. Former Prime Minister Yoshihiko Noda was in favor of joining the TPP and had hoped to finalize Japan's negotiations by the end of 2012. Japan was on track to join TPP negotiations but, in part because of the economic effects of the March 2011 earthquake, decided to delay membership. Japan recently held elections in which Noda's Democratic Party of Japan lost power to the Liberal Democratic Party headed by Prime Minister Shinszo Abe. It remains to be seen whether Abe will have the domestic political support needed to move forward with joining the TPP. His support may rest on whether he can negotiate tariff exceptions to protect Japan's agricultural sector. Japan is also negotiating a trilateral free trade agreement with China and South Korea; however, the escalating tensions with China over disputed Senkaku islands may shift Japanese political support toward a U.S. led trade agreement and away from one involving China.

China has thus far not been included in TPP negotiations. There are a number of reasons for China's exclusion but several are worth noting here. China is concerned that some provisions of the...

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