Trans-Pacific Partnership PrimerPublished May 20, 2013Updated August 5, 2013National Journal Presentation CreditsProducer: Jenna FugateDirector: Jessica Guzik

The Trans-Pacific Partnership is a Free Trade Agreement Subject to Ongoing Negotiations

UpdatedAugust 5, 2013

Free trade agreements (FTAs) are arrangements between nations that reduce trade barriers like tariffs and import quotas

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement that aims to liberalize trade of most goods and services and go beyond trade commitments currently established by the World Trade Organization (WTO); the TPP could potentially eliminate tariff and non-tariff barriers to trade and investment among the countries involved and could serve as a template for a future trade pact

2Source: International Trade Administration.

Countries Currently Participating in TPP

Negotiating countryHas expressed interest in negotiatingNon-negotiating country

Analysis•The TPP is currently being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam•Japan joined the most recent round of negotiations in Malaysia on July 23•Potential future members include Taiwan, the Philippines, Laos, Colombia, Thailand, and Costa Rica•There have been 18 rounds of negotiations; each year, more countries join

3Source: International Trade Administration.

UpdatedAugust 5, 2013

New Negotiations Take Place as More Countries Join TPP

2005 2008 2010 2011 2012 2013

Trans-Pacific Strategic Economic

Partnership (P4) initiated as a free trade agreement among Brunei,

Chile, New Zealand, and Singapore, aiming to make

economies of the Asia-Pacific region

more liberal

JanuaryU.S. agrees to enter talks with P4 about liberalizing trade in financial services

SeptemberU.S. announces it will

begin negotiations with P4 countries to

join the TPP

NovemberAustralia, Peru,

Vietnam announce they are joining TPP

negotiations

OctoberMalaysia

announces it will join TPP

negotiations

NovemberSouth Korea

expresses interest in joining TPP negotiations

JuneCanada and

Mexico announce they will join TPP

negotiations

AprilJapan

announces pending entry

into negotiations

MarchRound 1,

Melbourne, Australia

JuneRound 2,

San Francisco,

USA

October

Round 3,

Brunei

DecemberRound 4, Auckland,

New Zealand

FebruaryRound 5, Santiago

, Chile

MarchRound

6, Singap

ore

September

Round 8, Chicago,

USA

JuneRound 7, Ho Chi

Minh City, Vietnam

OctoberRound 9,

Lima, Peru

DecemberRound 10,

Kuala Lumpur, Malaysia

MarchRound11, Melbourn

e, Australia

MayRound

12, Dallas,

USA

JulyRound 13,

San Diego, USA

September

Round 14, Leesburg, Virginia,

USA

DecemberRound 15, Auckland,

New Zealand

MarchRound

16, Singapo

re

MayRound

17, Lima, Peru

New Countries Entering Negotiations

Rounds of Negotiations

4

JulyRound

18, Kota Kinabalu

, Malaysia

Source: International Trade Administration; Office of the U.S. Trade Representative; Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, 2013.

UpdatedAugust 5, 2013

U.S. Seeks Increased IP Protection, Better Market Access in TPP Negotiations

Analysis•Among confirmed TPP members, U.S. is negotiating for market access to goods, services, and agriculture with countries with which it does not currently have FTAs: Japan, Malaysia, Vietnam, New Zealand, and Brunei•The U.S. is seeking increased intellectual property rights protection, such as requiring criminal penalties for importing counterfeit labeling and packaging, whether done willfully or not, and requiring criminal penalties for pirating video in movie theaters

Japan

Malaysia

Brunei

U.S. Imports (In Billions) U.S. Exports (In Billions)

$3.4

$3.2

$25.9

$12.9

$146.4

$70.0

0.1 0.2

Trade Concerns

The U.S. dairy sector wants protection from New Zealand’s dairy exporters

Vietnam

New ZealandBrunei

$4.6$20.3

$0.1

$0.2

Certain U.S. footwear manufacturers have argued for maintaining high tariffs on imported footwear, while Vietnam is pressing for lower tariffs to gain greater access to the U.S. market

Trans-Pacific Partnership Countries With Whom U.S Does Not Have Existing FTAs TPP Member

5Source: International Trade Administration; Office of the U.S. Trade Representative, Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, 2013.

UpdatedAugust 5, 2013

Opponents Concerned That TPP Involvement Compromises U.S. Trade

• Member countries at varied levels of economic development may not be able to meet U.S. trade standards, forcing the U.S. to make concessions

• Increased intellectual property rights protection may weaken ability of the U.S. to obtain generic medicines, compromising Americans’ access to affordable medicine

• Focus on the TPP and other regional/bilateral free trade agreements may divert necessary attention and resources from multilateral WTO initiatives

• Free trade agreements may complicate commerce, with different rules and standards for different FTAs that companies must take into account when conducting international trade

• The TPP could impact current U.S. trade policies; for example, there is a question of whether the TPP could preclude the U.S. from negotiating bilateral FTAs, such as an FTA with the EU

Sen. Bernie

Sanders(I-Vt.)

Rep. Henry

Waxman(D-Calif.)

Rep. Sander Levin

(D-Mich.)

Rep. John

Conyers(D-Mich.)

Rep. Jim McDermo

tt(D-Wash.)

Rep. John Lewis

(D-Ga.)

Rep. John

Conyers(D-N.Y.)

Rep. Earl Blumenau

er(D-Ore.)

Rep. Lloyd

Doggett(D-Tex.)

Have expressed concerns about the effect TPP requirements would have on

U.S. access to generic medicine:

Concerns with U.S. TPP Involvement

=

6Source: International Trade Administration; Office of the U.S. Trade Representative; Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, 2013.

UpdatedAugust 5, 2013

Supporters Believe Successful Negotiations Could Set Positive Precedent

• The TPP provides the U.S. an opportunity to negotiate a comprehensive and high-standard FTA and protect its trade interests

• Successful negotiation and implementation of new trade rules proposed in the TPP could set precedent for future WTO negotiations

• Trade might be further liberalized if other countries in the region consider joining the TPP based on the success of the negotiations (as was the case with Canada and Mexico recently)

• The TPP could bolster economic policy reforms, particularly for countries such as Vietnam (the WTO is critical of Vietnamese labor rights and intellectual property rights standards), by enforcing higher policy standards and liberalizing trade

President Barack Obama

Obama supports TPP negotiations as the leading trade policy initiative of the Obama administration, and part of the

administration’s “pivot” to Asia

Potential Benefits of U.S. TPP Involvement

=

7Source: International Trade Administration; Office of the U.S. Trade Representative, Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, 2013.

UpdatedAugust 5, 2013

TPP Could Have Large-Scale Impact on U.S. Trade

Analysis•The TPP could have a significant impact on U.S. trade because potential TPP members account for 62% of U.S. trade; confirmed TPP members account for 34% of U.S. trade• Certain industries that export to TPP countries will be impacted; the major U.S. merchandise exports to

TPP countries are machinery (e.g., computers, turbines, and agricultural equipment), electrical machinery (e.g., integrated circuits, semiconductors, and cell phones), autos, and refined petroleum products

U.S. World and TPP Goods Trade(In billions of U.S. dollars)

Other Countries

Other APEC*ChinaJapan

Canada & MexicoAustralia, Chile, Peru & Singapore

Brunei, Malaysia, New Zealand, & Vietnam

Total U.S. Trade(100%)

Potential TPP (62%)

Current TPP(34%)

$

$

$

$

$

$

$

$

$

B

B

B

B

B

B

B

B

B

*China, Hong Kong, Indonesia, South Korea, Papua New Guinea, Peru, The Philippines, Russia, Taipei, and Thailand

8Source: International Trade Administration; Office of the U.S. Trade Representative; Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, 2013.

UpdatedAugust 5, 2013