TPP Entry into force: two years, three scenarios

As the data in the table shows, both the U.S. (60.3%) and Japan (17.7%) must ratify for the TPP to enter into force, since the required 85% can’t be reached without both of them. Two of the three “5%” countries,  Canada (6.6%), Australia (5.6%), and Mexico (4.5%), must ratify, for the same reason. And at least two of the other TPP countries “1%” countries must also ratify to reach the required six TPP governments and 85% of the combined GDP in 2013.

TPP Chapter 30, “Final Provisions” explains the “Entry into Force” provisions, in article 30.5, as follows:

“1. This Agreement shall enter into force 60 days after the date on which all original signatories have notified the Depositary in writing of the completion of their applicable legal procedures.

“2. In the event that not all original signatories have notified the Depositary in writing of the completion of their applicable legal procedures within a period of two years [04/02/2018] of the date of the signature [04/02/2016] of this Agreement, it shall enter into force 60 days after [01’06/2018] the expiry of this period if at least six of the original signatories, which together account for at least 85 per cent of the combined gross domestic product of the original signatories in 2013, have notified the Depositary in writing of the completion of their applicable legal procedures within this period.

“3. In the event that this Agreement does not enter into force under paragraph 1 or 2, it shall enter into force 60 days after the date on which at least six of the original signatories, which together account for at least 85 per cent of the combined gross domestic product of the original signatories in 2013, have notified the Depositary in writing of the completion of their applicable legal procedures.”

TPP Ratification 85%So, in summary, the TPP will enter into force (1) 60 days after all 12 original TPP governments have completed their “applicable legal procedures,” and notified the “Depository;” (2) if all 12 haven’t notified within two years after signing [Feb 4, 2016], then the TPP will enter into force two years and 60 days after [Jun 1, 2018] signing, if at least six TPP governments, accounting for 85% of the combined GDP of the 12 original signatories, have notified; or (3) if neither of the preceding are applicable, the the TPP will enter into force 60 days after at least six TPP governments, accounting for 85% of the combined GDP of the 12 original signatories, have notified. As the data in the table shows, both the U.S. and Japan must ratify for the TPP to enter into force, since the required 85% can’t be reached without both of them. Two of the three “5%” countries,  Canada, Australia, and Mexico, must ratify, for the same reason. And at least two of the other TPP countries “1%” countries must also ratify to reach the required six TPP governments and 85% of the combined GDP in 2013.

The “applicable legal procedures” for the Unites States are in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, informally called “Trade Promotion Authority 2015,” which explains when and under what conditions the U.S. will apply the TPP agreement to “other Parties,” that is the TPP member countries, including Vietnam.

SourceTPP, Chapter 30, Final Provisions

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About the author  ⁄ AmCham Vietnam

AmCham is an independent association of companies with the objective of promoting trade and investment between Vietnam and the U.S. With two chapters, one in Ho Chi Minh City and one in Hanoi, our membership of 700 companies and 1,500 representatives is unified by a commitment to promote trade and investment between Vietnam and the United States.

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