What is the Trans-Pacific Partnership?
Five years in the making, the Trans-Pacific Partnership (TPP) is a trade agreement between the United States, Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam, Chile, Brunei, Singapore, and New Zealand. The twelve countries in this agreement comprise roughly 40 percent of global G.D.P. and one-third of world trade.
The purpose of the agreement, according to the Office of the U.S. Trade Representative, is to “enhance trade and investment among the TPP partner countries, promote innovation, economic growth and development, and support the creation and retention of jobs.” The agreement could create a new single market for goods and services between these countries, similar to what exists between European countries.
What exactly is a trade agreement?
A trade agreement is a treaty between two or more countries that reduces or eliminates barriers to free trade, such as taxes, tariffs, quotas, or trade restrictions. Three of the most common types of trade agreements the U.S. is involved with are Free Trade Agreements (FTAs), Trade and Investment Framework Agreement (TIFAs), and Bilateral Investment Treaties (BITs).
The United States has FTAs in effect with 20 countries. These tend to be expansions or additions to other agreements, such as World Trade Organization (WTO) agreement. TIFAs provide frameworks for governments to discuss and resolve trade and investment issues at an early stage while BITs help protect private investment, develop market-oriented policies in partner countries, and promote U.S. exports.
Which goods and services are affected?