TPP-induced charms and challenges

Being the most advanced in all areas, the US is deemed to benefit the most from the pact, and this stirs fears in Thailand, which is poised to become the 12th country at the negotiation table.

US President Barack Obama announced in November 2009 his country’s intention to participate in the TTP negotiations to conclude an ambitious, next-generation, Asia-Pacific trade agreement that reflects US priorities and values.

Through this agreement, the US is seeking to boost its economic growth and support the creation and retention of high-quality jobs at home by increasing exports to a region that includes some of the world’s most robust economies and that represents more than 40 per cent of global trade.

The Obama administration has been working in partnership with the US Congress and consulting closely with stakeholders around that country to ensure the TPP addresses the issues that US businesses and workers are facing now, and may confront in the future.

It was reported that the TPP was a key element of the Obama administration’s strategy to make US engagement in the Asia-Pacific region a top priority. As a group, TPP countries are the fourth-largest goods and services export market of America. US exports to the broader Asia-Pacific region totalled $775 billion (Bt23.8 trillion) in 2010, a 25.5-per-cent increase over 2009 and equal to 61 per cent of total US goods exports to the world.

US exports of agricultural products to the region totalled $83 billion in 2010 and accounted for 72 per cent of its total agricultural exports to the world. US private-services exports totalled $177 billion in 2009. America’s small and medium-sized enterprises alone exported $171 billion to the Asia-Pacific region in 2009.

"The TPP will boost our economies, lowering barriers to trade and investment, increasing exports, and creating more jobs for our people, which is my No 1 priority," Obama said at a TPP meeting in Hawaii in November last year. "Along with our trade agreements with South Korea, Panama and Colombia, the TPP will also help achieve my goal of doubling US exports, which support millions of American jobs."

The TPP enlists 20 main issues that range from market access for physical goods to complicated electronic financial transactions (see box).

Members have so far completed 14 rounds of negotiations and the 15th round will be held in Auckland, New Zealand, from December 3-12.

According to Office of the United States Trade Representative, the negotiating groups have developed consolidated legal text in virtually all negotiating groups. In some areas, text is almost complete; in others, further work is needed to finalise text on specific issues. The texts contain brackets to indicate where differences remain.

The following issues are under negotiation:

l Competition. This text will promote a competitive business environment, protect consumers, and ensure a level playing field for TPP companies. Negotiators have made significant progress on the text, which includes commitments on the establishment and maintenance of competition laws and authorities, procedural fairness in competition-law enforcement, transparency, consumer protection, private rights of action and technical cooperation.

l Cross-border services. TPP countries have agreed on most core elements of the cross-border services text. This consensus provides the basis for securing fair, open, and transparent markets for services trade, including services supplied electronically and by SMEs, while preserving the right of governments to regulate in the public interest.

l E-commerce. The e-commerce text will enhance the viability of the digital economy by ensuring that impediments to both consumers and businesses embracing this medium of trade are addressed. Negotiators have made encouraging progress, including on provisions addressing customs duties in the digital environment, authentication of electronic transactions, and consumer protection. Additional proposals on information flows and treatment of digital products are under discussion.

l Environment. A meaningful outcome on environmental protection will ensure the agreement addresses important trade and environmental challenges and enhances mutual supportiveness of trade and the environment. The TPP countries share the view that the environment text should include effective provisions on trade-related issues that would help to reinforce environmental protection and are discussing an effective institutional arrangement for implementation and a specific cooperation framework for addressing capacity building needs. They are also discussing proposals on new issues, such as marine fisheries and other conservation issues, biodiversity, invasive alien species, climate change, and environmental goods and services.

l Financial services. The text related to investment in financial institutions and cross-border trade in financial services will improve transparency, non-discrimination, fair treatment of new financial services, and investment protections and an effective dispute settlement remedy for those protections. These commitments will create market-opening opportunities, benefit businesses and consumers of financial products, and at the same time protect the right of financial regulators to take action to ensure the integrity and stability of financial markets, including in the event of a financial crisis.

l Government procurement. The text of this chapter will ensure that procurement covered under this is conducted in a fair, transparent and non-discriminatory manner. TPP negotiators have agreed on the basic principles and procedures for conducting procurement, and are developing the specific obligations. TPP partners want comparable coverage of procurement by all the countries, while recognising the need to facilitate the opening of the procurement markets of developing countries through the use of transitional measures.

l Intellectual property. TPP countries have agreed to reinforce and develop existing World Trade Organisation (WTO) Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) rights and obligations to ensure an effective and balanced approach to intellectual property rights among TPP countries. Proposals are under discussion on many forms of intellectual property, including trademarks, geographical indications, copyright and related rights, patents, trade secrets, data required for the approval of certain regulated products, as well as intellectual-property enforcement and genetic resources and traditional knowledge. TPP countries have agreed to reflect in the text a shared commitment to the Doha Declaration on TRIPS and Public Health.

l Investment. This text will provide substantive legal protections for investors and investments of each TPP country in other TPP states, including ongoing negotiations on provisions to ensure non-discrimination, a minimum standard of treatment, rules on expropriation, and prohibitions on specified performance requirements that distort trade and investment. The investment text will include provisions for expeditious, fair and transparent investor-state dispute settlement subject to appropriate safeguards, with discussions continuing on scope and coverage. The investment text will protect the rights of the TPP countries to regulate in the public interest.

l Labour. TPP countries are discussing a labour chapter that includes commitments on labour-rights protection and mechanisms to ensure cooperation, coordination and dialogue on labour issues of mutual concern. They agree on the importance of coordination to address the challenges of the 21st-century workforce through bilateral and regional cooperation on workplace practices to enhance workers’ well-being and employability, and to promote human capital development and high-performance workplaces.

l Telecommunications. This text will promote competitive access for telecom providers in TPP markets, which will benefit consumers and help businesses in TPP markets be more competitive. In addition to broad agreement on the need for reasonable network access for suppliers via inter-connection and access to physical facilities, TPP countries are close to consensus on a broad range of provisions to enhance transparency of the regulatory process, and ensure rights of appeal of decisions. Extra proposals have been put forward on choice of technology and addressing the high cost of international mobile roaming.

l Temporary entry. TPP countries have substantially concluded the general provisions of the chapter, which are designed to promote transparency and efficiency in the processing of applications for temporary entry, and ongoing technical cooperation between TPP authorities. Specific obligations related to individual categories of business person are under discussion.

l Trade remedies. TPP countries have agreed to affirm their WTO rights and obligations and are considering new proposals, including obligations that would build upon these existing rights and obligations in transparency and procedural due process. Proposals also have been put forward relating to a transitional regional safeguard mechanism.