After more than five years of negotiations, trade ministers representing Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam, yesterday signed the Trans-Pacific Partnership Agreement (TPP) in Auckland, New Zealand.
The California Chamber of Commerce supports the TPP trade agreement process as an important vehicle for economic integration throughout the Pacific. This regional agreement sets a high standard that will enhance the competitive of the countries that are a part of it, helping facilitate trade and promoting investment between participants in the agreement, increasing their economic growth and development.
According to U.S. trade officials, this signing ceremony kicks off the next phase of intense talks between Congress and the White House. All 12 countries now will be able to begin their respective domestic ratification processes and will have up to two years to complete that before the TPP agreement enters into force.
The representative signatories comprise nearly 40 percent of global GDP, a market of more than 800 million people, and around one third of world trade.
“TPP will bolster our leadership abroad and support good jobs here at home,” said U.S. President Barack Obama. “I’ll continue working with Democrats and Republicans in Congress to enact it into law as soon as possible so our 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.”
TPP Impact– New Estimates
In January 2016, the Peterson Institute for International Economics released a report updating their projections of the effects of the TPP initially made in 2012. Using a comprehensive, quantitative model, the report concludes that the deal will meet its objectives of establishing new, market-oriented rules in the dynamic environment of international commerce, and that it will reduce trade barriers among member nations. Numerically, the findings reveal that both GDP and exports will grow significantly, and that delaying implementation even one year would potentially cause a $77 billion loss. (Peterson Institute for International Economics)
The new estimates suggest that the TPP will increase annual real incomes in the United States by $131 billion, or 0.5 percent of GDP, and annual exports by $357 billion, or 9.1 percent of exports, over baseline projections by 2030, when the agreement is nearly fully implemented. Annual income gains by 2030 will be $492 billion for the world. While the United States will be the largest beneficiary of the TPP in absolute terms, the agreement will generate substantial gains for Japan, Malaysia, and Vietnam as well, and solid benefits for other members.
According to The Hill, while the signing of the deal is a significant step, there is not a hard and fast deadline on when the White House will send Congress the implementing bill.
For more information, visit www.calchamber.com/TPP
Staff Contact: Susanne T. Stirling