What originally started as the Trans-Pacific Strategic Economic Partnership Agreement in 2005 among Singapore, Brunei, New Zealand and Chile — known as the Pacific Four (P4) Agreement — has evolved into what is now called the Trans-Pacific Partnership (TPP), potentially one of the most influential Free Trade Agreements in the last decade. While the TPP requires every country participating to eliminate all tariff lines by 2015, its main objective is to eliminate many non-tariff trade barriers, such as incompatible biotech and food and feed sanitation regulations.
The TPP is uniquely designed to allow additional countries across the Asia-Pacific region to join in negotiations. Since the original P4 was established, five countries formally committed to the TPP: the United States, Australia, Peru, Vietnam and Malaysia; while other new nations continue to express interest in joining.
As the scope of the agreement grows, so does the opportunity for the United States to create domestic jobs by increasing exports to a region that represents more than 40% of global trade.
Trade policy experts Gina Tumbarello, manager of international trade, American Feed Industry Association (AFIA), Floyd Gaibler, director of trade policy, U.S. Grains Council (USGC) and Gary C. Martin, president and CEO, North American Export Grain Association (NAEGA), weigh in on who could potentially be among our newest trade partners and provide a timeline of the agreement’s previous and ongoing developments.
Feed & Grain: What is the significance of the Trans-Pacific Partnership in regard to its influence on the future of trade policy development?
Gina Tumbarello, AFIA: The TPP is anticipated to be a “next-generation” agreement, setting the standard for future Free Trade Agreements. It will address new and emerging trade issues and is expected to include provisions on cross-cutting issues not included in previous trade agreements.
One such provision is making regulatory systems of TPP countries more compatible, allowing companies to work more smoothly in TPP markets.
Gary Martin, NAEGA: This is quite a large regional trade agreement, and it’s significant because it is being negotiated on the heels of the global economy’s frustration with the Doha Development Agreement. The TPP is poised to emerge as standard-setting, at least in the Asia Pacific region.
Floyd Gaibler, USGC: The significance of this agreement is that the original went beyond other traditional agreements by covering broader cross-cutting issues dealing with trade constraints along the global supply and production chain. The TPP requires regulatory coherence among the participating nine nations, which will result in more seamless and consistent trade between the countries.
Another unique quality of the original P4 agreement is that it was designed to easily allow future participants to come on board. The real importance of this is that it’s viewed as the beginning of an Asia regional economic agreement that would ultimately launch what’s been termed a “Free Trade of the Asia Pacific Region,” an approach trade policy experts have long advocated to the western hemisphere.
F&G: What is the likelihood that other nations will join the TPP?
Gaibler, USGC: Canada, Mexico and Japan formally expressed interest in joining the TPP at the November 2011 negotiation meeting. Each of these three countries has been undergoing consultations with all of the nine current members and it’s [the USGC’s] belief that all three will probably join at some juncture.
Tumbarello, AFIA: Negotiations between the TPP countries and Japan, Canada and Mexico have been ongoing. As it stands, it is believed that the United States, New Zealand and Australia are the only TPP countries not yet ready to commit to adding new trading partners to the negotiations. The other six TPP countries have completed their consultation process with the three [interested] countries and appear to be open to having them join the talks in the near term.