Trans-Pacific Partnership update: negotiations on track for reducing barriers.
Author | Salov, Alex |
Position | SPECIAL SECTION: International Trade |
The Trans-Pacific Partnership (TPP) is a regional free trade agreement (FTA) between the United States and eleven countries around the Pacific Ocean basin. The purpose of the TPP is to expand trade of nearly all goods and services within the region by reducing the existing barriers. The TPP is currently at an advanced stage of negotiations, and optimistic participants indicate that the agreement can be in place by mid-2015. For Alaska this trade agreement can be important because 70 percent of state exports are heading to the Asia Pacific region annually.
Geopolitical Aspects
The TPP began in 2005 as a small regional preferential trade agreement between Brunei, Chile, New Zealand, and Singapore called the Trans-Pacific Strategic Economic Partnership. One of the goals of the original agreement was to create a successful model that could potentially attract new members from the Asia Pacific region. In 2008, the United States entered the negotiations, followed by Australia, Peru, and Vietnam. Malaysia, Canada, Mexico, and most recently Japan all became TPP negotiation participants in subsequent years.
By press time, TPP officials last met in Washington, DC in December 2014. Collectively, the twelve negotiating countries represent around 40 percent of the world's GDP (2013) and 25 percent of overall world trade. The President's Office of the Trade Representative announced that "the TPP countries will be by far the largest export market for the United States."
From the US perspective, the TPP has more geopolitical aspects to it than economic outcomes. Bilateral FTAs between the United States and Australia, Canada, Chile, South Korea (not a part of TPP), Mexico, Peru, and Singapore already exist. Therefore there is no expectation of a dramatic increase of US exports to the region. TPP is often portrayed as a part of America's "Pivot to Asia" and a tool to prevent further economic expansion of China.
On the other hand, ASEAN-China FTA is frequently being criticized as an attempt to establish Chinese dominance and to reduce the US presence in the region. The 21st century's international economies are highly interconnected and some analysts argue that regional trade blocks potentially harm the excluded countries. Currently, there are forty-seven existing bilateral trade agreements in the Asia Pacific region besides trade blocks.
Two Trade Tracks
Peterson Institute for International Economics (Washington, DC) divides the trade cooperation efforts in...
To continue reading
Request your trialCOPYRIGHT GALE, Cengage Learning. All rights reserved.