|The current members include Canada, the United States, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Brunei, Singapore, Australia and New Zealand.
Once ratified by each country’s congress or parliament—which is likely to happen in early 2016—the accord will become the most significant, most economically-impactful trade deal in history. As many as 18,000 tariffs are expected to be eliminated. It will remove barriers to foreign investment, streamline customs procedures and create an international investor-state dispute settlement (ISDS) system, among much more.
The Peterson Institute for International Economics, a Washington, D.C.-based think tank, predicts that the resultant savings could boost the world economy by an incredible $223 billion by 2025.
Today, the 12 members control more than 25% of all global trade, representing close to $10 trillion but it’s estimated that once the TPP goes live, the trade percentage could climb to as high as 50%, according to CLSA.
The trade pact couldn’t have come at a better time. Global growth is slowing, and mounting tariffs threaten to suffocate trade. Even though the TPP’s full implementation is months and, in some cases, years away, it’s encouraging to know that positive change is on its way.
Having said that, no one knows the full details yet and it might be a while before we can see the official documents. When that time comes, we’ll analyze the deal to see which countries, industries and sectors stand to benefit the most.
The pact has already become the subject of criticism, targeted specifically at how it handles pharmaceuticals and intellectual property. but, all in all, the world has needed such an agreement for years now to bring unilateral trade liberalization into the 21st century.…
To be clear, the real winner in the formation of the TPP is the U.S., for whom the deal is as much about geopolitics as it is about trade. In a briefing this week, the National Bank of Canada writes that the TPP “would allow the United States to take the lead in setting the rules of commerce for about 40% of the global economy.”…
Not only is the Trans-Pacific Partnership great for global trade but it also promises to help bring fiscal and monetary policies into balance. The deal is a welcome and much-needed development from a fiscal perspective, one that we haven’t seen from world governments in more than a generation. Lately, everything’s been about monetary policy—specifically quantitative easing and currency manipulation—to stimulate growth. A reduction in taxes, tariffs and regulation also promotes growth.
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What the Influencers Are Saying
I’d like to end by sharing some compelling comments on the TPP by key policymakers, business leaders and economists. Their optimism should convince anyone that the TPP, once ratified, could end up being the best thing to happen to global trade in at least a generation….
Malaysia currently puts a 30 percent tax on American auto parts. Vietnam puts a tax of as much as 70 percent on every car American automakers sell in Vietnam. Under this agreement, all those foreign taxes will fall. Most of them will fall to zero so we are knocking down barriers that are currently preventing American businesses from selling in these countries and are preventing American workers from benefiting from those sales to the fastest-growing, most dynamic region in the world.
U.S. President Barack Obama
This agreement in my view is truly transformational. To have one set of rules for 12 destinations is going to turbo charge regional supply chains and global supply chains and reduce costs.
Australia Minister for Trade and Investment Andrew Robb
Free-trade agreements create new opportunities for American companies and their workers. I thank the United States Trade Representative and fellow trade negotiators for their commitment to finalizing this agreement. U.S. companies need to be able to compete and win in global markets to support well-paying jobs at home. It’s critical we provide our manufacturers and exporters with the best tools to compete on a level-playing field in markets worldwide.
Boeing President and CEO Dennis Muilenburg
In many parts of the world, food and agricultural products still face the legacy of high import barriers. We believe the Trans-Pacific Partnership will allow food to move more freely across borders from places of plenty to places of need, which benefits farmers and consumers around the world.
Cargill Chairman and CEO David MacLennan
Canada’s mining industry has been a strong advocate for liberalized trade and investment flows for many years. NAFTA, free trade agreements with Chile, Peru, Colombia and other countries in Latin America, Africa and Asia have all helped to increase Canadian exports and investment, supporting jobs for Canadians here and abroad. TPP, representing such a massive trade block, including critical emerging markets, is a trading partnership Canada must not risk being left out of.
Mining Association of Canada President and CEO Pierre Gratton
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Related Articles from the munKNEE Vault:
1. Here’s What the Trans Pacific Partnership (TPP) Trade Agreement Is All About
On October 4, the 12 trading partners in the Trans Pacific Partnership (TPP) – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam – reached agreement after tough negotiations lasting 7 years…an agreement impacting countries that account for 40% of global GDP and 26% of world trade. What kind of an agreement is TTP? Read on!