U.S. Goods and services balances with TPP Countries, 2001 - 2011

TPP Trans-Pacific Partnership Negotiations: Issues for the U.S. Congress

U.S. Goods and services balances with TPP Countries, 2001 - 2011Summary

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. . Services are an important component of U.S. international trade, as indicated by the chart on the left.

U.S. negotiators and others describe and envision the TPP as a “comprehensive and high-standard” FTA, presumably because they hope it will liberalize trade in nearly all goods and services and include commitments beyond those currently established in the World Trade Organization (WTO). The broad outline of an agreement was announced on the sidelines of the Asia-Pacific Economic Cooperation (APEC) ministerial in November 2011 in Honolulu, HI.

If concluded as envisioned, the TPP potentially could eliminate tariff and non-tariff barriers to trade and investment among the parties and could serve as a template for a future trade pact among APEC members and potentially other countries. Congress has a direct interest in the negotiations, both through influencing U.S. negotiating positions with the executive branch, and by passing legislation to implement any resulting agreement.

The 16th round of negotiations will take place in Singapore, between March 4 and 13, 2013. Three negotiating rounds are scheduled this year prior to the October 2013 APEC summit in Indonesia, the current target for reaching an agreement. For this deadline to be achieved, outstanding negotiating positions may need to be tabled soon in order for political decisions to be made. The negotiating dynamic itself is complex: decisions on key market access issues such as dairy, sugar, and textiles and apparel may be dependent on the outcome of controversial rules negotiations such as intellectual property rights or state-owned enterprises.

Canada and Mexico participated for the first time in the 15th round of negotiations in Auckland, New Zealand in December 2012, after joining the talks in June 2012. Japan and the TPP partners are conducting bilateral consultations on its possible entrance as well. In addition, Thailand formally expressed its interest in joining the negotiations during President Obama’s trip to the country in November 2012.

The TPP originally grew out of an FTA among Brunei, Chile, New Zealand, and Singapore, which came into force in 2006. Fifteen rounds of negotiations have occurred since the beginning of formal talks in 2010. In addition to negotiations on new trade rules among all the parties, the talks include U.S. market access negotiations—seeking removal of quotas and tariffs on traded products—with New Zealand, Brunei, Malaysia, and Vietnam as well as market access negotiations among other parties. The United States has FTAs in force with Chile, Singapore, Australia, Peru, and with North American Free Trade Agreement (NAFTA) partners Canada and Mexico, although new disciplines may be negotiated in the course of the talks covering issues beyond those in the existing FTAs.

The TPP serves several strategic goals in U.S. trade policy. First, it is the leading trade policy initiative of the Obama Administration, and is a manifestation of the Administration’s “pivot” to Asia. It provides both a new set of trade negotiations following the implementation of the bilateral FTAs with Colombia, Panama, and South Korea and an alternative venue to the stalled Doha Development Round of multilateral trade negotiations under the WTO. If concluded, it may serve to shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. FTA partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy—possibly providing impetus to future multilateral liberalization under the WTO.

The 11 countries that make up the TPP negotiating partners include advanced industrialized, middle income, and developing economies. While new market access opportunities exist among the participants with whom the United States presently does not have FTAs, the greater value of the agreement to the United States may be setting a trade policy template covering issues it deems important and which can be adopted throughout the Asia-Pacific region, and possibly beyond.

Twenty-nine chapters in the agreement are under discussion. Aside from market access negotiations in goods, services, and agriculture, negotiations are being conducted on intellectual property rights, services, government procurement, investment, rules of origin, competition, labor, and environmental standards and other disciplines. In many cases, the rules being negotiated are more rigorous than comparable rules found in the WTO’s Uruguay Round Agreement. Some topics, such as state-owned enterprises, regulatory coherence, and supply chain competitiveness, break new ground in FTA negotiations.

As the negotiations proceed, a number of issues important to Congress are emerging. One is whether the United States can balance its vision of creating a “comprehensive and high standard” agreement with a large and expanding group of countries, while not insisting on terms that other countries will reject. Related to this may be what concessions the United States is willing to make to achieve a “comprehensive and high-standard” agreement overall. Another issue is how Congress will consider the TPP, if concluded. The present negotiations are not being conducted under the auspices of formal trade promotion authority (TPA)—the latest TPA expired on July 1, 2007—although the Administration informally is following the procedures of the former TPA. If TPP implementing legislation is brought to Congress, TPA may need to be considered if the legislation is not to be subject to potentially debilitating amendments or rejection. Finally, Congress may seek to weigh in on the addition of new members to the negotiations, before or after the negotiations conclude.

Read more …

Trans-Pacific Partnership Negotiations: Issues for the U.S. Congress, Congressional Research Service, Jan 24, 2013

Trans-Pacific Partnership Countries: Comparative Trade and Economic Analysis, Congressional Research Service, Jan 29, 2013

Understanding the Trans-Pacific Partnership, Jeffrey Shott, et. al., Dec 2012
slide presentation  | video  | Sticking Points in the TPP Negotiations

The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment, Peter Petri, et. al., Dec 2012
slide presentation #1   | slide presentation #2 (benefits to Vietnam, U.S., China)video

Panel Discussion and Q&A: Fred Bergsten, Jeffrey Schott, Peter Petri, Dec 19, 2012 video

Coming soon  …

Mar 4-13, 2013. The 16th round of the Trans-Pacific Partnership (TPP) negotiations will take place at the Grand Copthorne Waterfront Hotel in Singapore from March 4-13, 2013.  Registration is now open for TPP stakeholders interested in participating in stakeholder events.

The TPP Stakeholder Programme will take place on Mar 6. The organizers will accommodate stakeholders that wish to make presentations. With this, stakeholders now have an expanded range of options for engaging negotiators and other stakeholders. Those who wish to, can make presentations and/or request tables to display TPP-relevant collaterals, both on a first-come-first-served basis. Stakeholders who do not wish to make presentations, are still welcome to register and enjoy the same opportunity to engage negotiators and other stakeholders.

Posted: Feb 24, 2013