• Industry: Government & Public Sector
  • Date: 11/5/2013

Case study: The Trans-Pacific Partnership 

The Trans-Pacific Partnership (TPP) is a trade agreement currently under negotiation between 11 countries on both sides of the Pacific (Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam are currently members, with Japan having recently received approval to join negotiations).

The TPP represents the largest 'regional' trade agreement currently under negotiation, though it is not the only one currently in progress — member countries are also involved in the Pacific Regional Comprehensive Economic Partnership, the Pacific Alliance, and agreements with the European Union.1 If Japan and South Korea were to join, as some predict, member countries would represent 40 percent of world GDP and about 27 percent of current world exports.2 It is a demographically and economically diverse group of countries, with GDP per capita at purchasing power parity ranging from US$3,000 in Vietnam to US$60,000 in Singapore. 3

The 29 chapters under the TPP negotiation would liberalize trade and goods and services as well as investment well beyond what has been achieved in other previous trade agreements.4 In addition to tariffs on goods, the agreement would cover services and investment, and traditionally domestic policy areas such as government procurement, intellectual property, agriculture, environmental issues and telecommunications.5 Regulation of patent protection for pharmaceuticals for example, see interests in stronger patent protection balanced against interests in access to more affordable generic pharmaceuticals to manage healthcare costs.6

The TPP is an ambitious agreement whose impact could have even larger influences on the shape of economic interconnectedness over time. It involves a clear effort to expand the international trade rulebook, and it is open-ended with a goal of expanding membership over time.7 If, as expected, the TPP launches further growth to a larger trade agreement with broader coverage through the region, it is expected to increase world trade by 12 percent by 2025. 8 The results could be more significant if the groundwork leads to a renewed investment in the WTO framework.

1Anonymous. 16 March 2013. "The Other Conclave". The Economist. Accessed 3 May 2013.

2Jeffrey Schott, Barbara Kotschwar and Julia Muir. January 2013. Understanding the Trans-Pacific Partnership. Policy Analyses in International Economics 99. Peterson Institute of International Economics.

3Brock. R. Williams. 29 January 2013. "Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis". Congressional Research Service (US). Washington, DC.

4Schott et. al, 2013.

5 Office of the United States Trade Representative. USTR Fact Sheet on Trans-Pacific Partnership Agreement Outline.

6 Schott et. al, 2013.

7 C.L.Lim, Deborah Elms and Patrick Low. 2012. "What is high quality, twenty-first century anyway?" in The Trans-Pacific Partnership: A Quest for a Twenty-first century Agreement. Cambridge, Cambridge UP.

8Peter A. Petri. and Michael G. Plummer, The Trans-Pacific Partnership and Asia-Pacific Integration: Policy Implications (June 15, 2012). Peterson Institute for International Economics Policy Brief.


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