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News: Update On The Trans-Pacific Partnership

Author:Mr Cody Mcfarlane
Profession:Harris Gomez Group

The controversial and long-gestating Trans-Pacific Partnership (TPP) is now moving ahead, with 11 countries—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam—agreeing on 23 January 2018 as to the final terms of the agreement that is to be officially signed by these countries in March in Chile.

What is it?

The TPP is a free-trade agreement designed to make exportation and investment both cheaper and simpler. It aims to do this by cutting tariffs and creating common laws and regulations between member countries.

Notably, the agreement was originally set to include the United States, in which case it would have comprised about 40% of the world market. However, Donald Trump campaigned strongly on the idea of a nationalist, closed "America First" policy, saying that he would withdraw the country if elected—which he did by executive order on his third day in office. While initially there was much confusion as to whether the agreement would (or even could) continue without the US, the remaining 11 countries persisted with negotiations and spent much of 2017 salvaging the TPP. These countries have made some modifications to the original agreement that have ultimately made it stronger and more beneficial, such as a redaction of some of the onerous intellectual property and patent protections pushed by the US. While the US' absence is unfortunate (signalling the country's withdrawal from the Asia-Pacific region and the world in general) and results in a very different dynamic, the TPP is still a very big deal for businesses.

What are the benefits?

The TPP is expected to lower a lot of the barriers to trade and investment. This will allow competitive players to enter into new markets, hire workers at better wages, and lower prices while also opening up the range and quality of goods and services.

For the member countries, the key selling point is that the TPP will mean increased trade and exportation, which in turn will create new jobs. While it is true that there are some negative factors to the agreement (most notably, the possibility that certain medicines will see price increases because of the patent protection clauses), the economic factors and benefits are generally seen to outweigh any adverse consequences.

Some other benefits include:

Reduces regulatory complexity. Regulatory cohesion among TPP nations will help to ease the risks and costs of doing business abroad for small businesses. Easing customs...

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