Obama signs Trans-Pacific Partnership

Trans-Pacific Partnership trade deal signed

By the Business Standard

The Trans-Pacific Partnership (TPP), on of the world’s biggest multinational trade deals, was signed by 12 member nations on Thursday in New Zealand, but the massive trade pact will still require years of tough negotiations before it becomes a reality.

The TPP, a deal which will cover 40 per cent of the world economy, has already taken five years of negotiations to reach Thursday’s signing stage.

The signing is “an important step” but the agreement “is still just a piece of paper, or rather over 16,000 pieces of paper until it actually comes into force,” said New Zealand Prime Minister John Key at the ceremony in Auckland.

The TPP will now undergo a two-year ratification period in which at least six countries – that account for 85 per cent of the combined gross domestic production of the 12 TPP nations – must approve the final text for the deal to be implemented.

The 12 nations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

Given their size, both the US and Japan would need to ratify the deal, which will set common standards on issues ranging from workers’ rights to intellectual property protection in 12 Pacific nations.

Opposition from many US Democrats and some Republicans could mean a vote on the TPP is unlikely before President Barack Obama, a supporter of the TPP, leaves office early in 2017.

Hailing the signing of one of the biggest multinational trade deals in history, Obama said the TPP would bolster US leadership abroad and give it an advantage over other leading economies like China. “TPP will bolster our leadership abroad and support good jobs here at home,” he said.

“Right now, the rules of global trade too often undermine our values and put our workers and businesses at a disadvantage. TPP will change that. It eliminates more than 18,000 taxes that various countries put on Made in America products,” Obama said.

“It promotes a free and open internet and prevents unfair laws that restrict the free flow of data and information.

It includes the strongest labour standards and environmental commitments in history – and, unlike in past agreements, these standards are fully enforceable,” he said. “TPP allows America – and not countries like China – to write the rules of the road in the 21st century, which is especially important in a region as dynamic as the Asia-Pacific.”

Obama asked lawmakers to enact the deal into law as soon as possible so that the American economy can immediately start benefiting from the tens of billions of dollars in new export opportunities.

“We should get TPP done this year and give more American workers the shot at success they deserve and help more American businesses compete and win around the world,” Obama said.

US Trade Representative Michael Froman has said the current administration is doing everything in its power to move the deal and on Thursday told reporters he was confident the deal would get the necessary support in Congress.

In Japan, the resignation of Economics Minister Akira Amari – Japan’s main TPP negotiator – may make it more difficult to sell the deal in Japan.

There is widespread grassroots opposition to the TPP in many countries. Opponents have criticised the secrecy surrounding TPP talks, raised concerns about reduced access to things like affordable medicines, and a clause which allows foreign investors the right to sue if they feel their profits have been impacted by a law or policy in the host country.

In New Zealand on Thursday more than 1,000 protesters caused traffic disruptions in and around Auckland and police said a large number of police have been deployed.

Chile’s Foreign Minister Heraldo Munoz predicted “robust democratic discussion” in his South American nation.

Australian Trade Minister Andrew Robb said the agreement would be tabled next week in parliament. Opposition to the deal in Australia has been building, but Robb was confident it would be approved, despite the government not control the Senate.

Canada’s new government signed the deal on Thursday, but Trade Minister Chrystia Freeland has said “signing does not equal ratifying.”

She emphasised that the government committed itself to a wide-ranging consultation on the TPP during its election campaign and that process was currently underway.

Secretary of the Economy for Mexico, Illdefonso Guajardo, said the TPP would be voted on before the end of 2016, while Malaysia said the deal had already been approved, although some legislative changes were still needed.

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