The leaders of Australia, Brunei, Chile, Malaysia, New Zealand, Peru,Singapore, Vietnam and the US on Nov. 12 announced the broad outlines oftheir Trans-Pacific Partnership (TPP) agreement, according to theVietnamese Ministry of Industry and Trade.
TPP will work toenhance trade and investment among the TPP partner countries, promoteinnovations, economic growth and development, and support the creationand retention of jobs.
Below is the full text of the TPP agreement’s broad framework:
Key Features
Inreporting to Leaders on the achievement of the broad outlines of anagreement, the Trade Ministers identified five defining features thatwill make TPP a landmark, 21st-century trade agreement, setting a newstandard for global trade and incorporating next-generation issues thatwill boost the competitiveness of TPP countries in the global economy.
* Comprehensive market access: to eliminate tariffs and otherbarriers to goods and services trade and investment, so as to create newopportunities for our workers and businesses and immediate benefits forour consumers.
* Fully regional agreement: to facilitate thedevelopment of production and supply chains among TPP members,supporting our goal of creating jobs, raising living standards,improving welfare and promoting sustainable growth in our countries.
* Cross-cutting trade issues: to build on work being done in APEC andother fora by incorporating in TPP four new, cross-cutting issues.These are:
- Regulatory coherence. Commitments will promote tradebetween the countries by making trade among them more seamless andefficient.
- Competitiveness and Business Facilitation. Commitmentswill enhance the domestic and regional competitiveness of each TPPcountry’s economy and promote economic integration and jobs in theregion, including through the development of regional production andsupply chains.
- Small- and Medium-Sized Enterprises. Commitmentswill address concerns small- and medium-sized enterprises have raisedabout the difficulty in understanding and using trade agreements,encouraging small- and medium-sized enterprises to tradeinternationally.
- Development. Comprehensive and robust marketliberalization, improvements in trade and investment enhancingdisciplines, and other commitments, including a mechanism to help allTPP countries to effectively implement the Agreement and fully realizeits benefits, will serve to strengthen institutions important foreconomic development and governance and thereby contribute significantlyto advancing TPP countries’ respective economic development priorities.
* New trade challenges: to promote trade and investment in innovativeproducts and services, including related to the digital economy andgreen technologies, and to ensure a competitive business environmentacross the TPP region.
* Living agreement: to enable the updating ofthe agreement as appropriate to address trade issues that emerge in thefuture as well as new issues that arise with the expansion of theagreement to include new countries.
Scope
• The agreement isbeing negotiated as a single undertaking that covers all key trade andtrade-related areas. In addition to updating traditional approaches toissues covered by previous free trade agreements (FTAs), the TPPincludes new and emerging trade issues and cross-cutting issues.
•More than twenty negotiating groups have met over nine rounds to developthe legal texts of the agreement and the specific market accesscommitments the TPP countries will make to open their markets to eachothers’ goods, services, and government procurement.
• All of thenine countries also have agreed to adopt high standards in order toensure that the benefits and obligations of the agreement are fullyshared. They also have agreed on the need to appropriately addresssensitivities and the unique challenges faced by developing countrymembers, including through trade capacity building, technicalassistance, and staging of commitments as appropriate.
• A set ofnew, cross-cutting commitments are intended to reduce costs, enable thedevelopment of a more seamless trade flows and trade networks betweenTPP members, encourage the participation of small- and medium-sizedenterprises in international trade, and promote economic growth andhigher living standards.
• The negotiating teams have proposed newcommitments on cross-cutting issues in traditional chapters and alsohave made substantial progress toward agreement on separate, stand-alonecommitments to address these issues.
Legal Texts
• Thenegotiating groups have developed consolidated legal text in virtuallyall negotiating groups. In some areas, text is almost complete; inothers, further work is needed to finalize text on specific issues. Thetexts contain brackets to indicate where differences remain.
• Thelegal texts will cover all aspects of commercial relations among theTPP countries. The following are the issues under negotiation and asummary of progress.
* Competition. The competition text willpromote a competitive business environment, protect consumers, andensure a level playing field for TPP companies. Negotiators have madesignificant progress on the text, which includes commitments on theestablishment and maintenance of competition laws and authorities,procedural fairness in competition law enforcement, transparency,consumer protection, private rights of action and technical cooperation.
* Cooperation and Capacity Building. The TPP countries agree thatcapacity building and other forms of cooperation are critical bothduring the negotiations and post-conclusion to support TPP countries’ability to implement and take advantage of the agreement. Theyrecognize that capacity building activities can be an effective tool inhelping to address specific needs of developing countries in meeting thehigh standards the TPP countries have agreed to seek. In this spirit,several cooperation and capacity building activities have already beenimplemented in response to specific requests and additional activitiesare being planned to assist developing countries in achieving theobjectives of the agreement. The TPP countries also are discussingspecific text that will establish a demand-driven and flexibleinstitutional mechanism to effectively facilitate and cooperation andcapacity building assistance after the TPP is implemented.
* Cross-Border Services. TPP countries have agreed on most of the coreelements of the cross-border services text. This consensus provides thebasis for securing fair, open, and transparent markets for servicestrade, including services supplied electronically and by small- andmedium-sized enterprises, while preserving the right of governments toregulate in the public interest.
* Customs. TPP negotiators havereached agreement on key elements of the customs text as well as on thefundamental importance of establishing customs procedures that arepredictable, transparent and that expedite and facilitate trade, whichwill help link TPP firms into regional production and supply chains.The text will ensure that goods are released from customs control asquickly as possible, while preserving the ability of customs authoritiesto strictly enforce customs laws and regulations. TPP countries alsohave agreed on the importance of close cooperation between authoritiesto ensure the effective implementation and operation of the agreement aswell as other customs matters.
* E-Commerce. The e-commerce textwill enhance the viability of the digital economy by ensuring thatimpediments to both consumer and businesses embracing this medium oftrade are addressed. Negotiators have made encouraging progress,including on provisions addressing customs duties in the digitalenvironment, authentication of electronic transactions, and consumerprotection. Additional proposals on information flows and treatment ofdigital products are under discussion.
* Environment. A meaningfuloutcome on environment will ensure that the agreement appropriatelyaddresses important trade and environment challenges and enhances themutual supportiveness of trade and environment. The TPP countries sharethe view that the environment text should include effective provisionson trade-related issues that would help to reinforce environmentalprotection and are discussing an effective institutional arrangement tooversee implementation and a specific cooperation framework foraddressing capacity building needs. They also are discussing proposalson new issues, such as marine fisheries and other conservation issues,biodiversity, invasive alien species, climate change, and environmentalgoods and services.
* Financial Services. The text related toinvestment in financial institutions and cross-border trade in financialservices will improve transparency, non-discrimination, fair treatmentof new financial services, and investment protections and an effectivedispute settlement remedy for those protections. These commitments willcreate market-opening opportunities, benefit businesses and consumersof financial products, and at the same time protect the right offinancial regulators to take action to ensure the integrity andstability of financial markets, including in the event of a financialcrisis.
* Government Procurement. The text of the GovernmentProcurement Chapter will ensure that procurement covered under thechapter is conducted in a fair, transparent, and non-discriminatorymanner. The TPP negotiators have agreed on the basic principles andprocedures for conducting procurement under the chapter, and aredeveloping the specific obligations. The TPP partners are seekingcomparable coverage of procurement by all the countries, whilerecognizing the need to facilitate the opening of the procurementmarkets of developing countries through the use of transitionalmeasures.
* Intellectual Property. TPP countries have agreed toreinforce and develop existing World Trade Organization Agreement onTrade-Related Aspects of Intellectual Property (TRIPS) rights andobligations to ensure an effective and balanced approach to intellectualproperty rights among the TPP countries. Proposals are underdiscussion on many forms of intellectual property, including trademarks,geographical indications, copyright and related rights, patents, tradesecrets, data required for the approval of certain regulated products,as well as intellectual property enforcement and genetic resources andtraditional knowledge. TPP countries have agreed to reflect in the texta shared commitment to the Doha Declaration on TRIPS and Public Health.
* Investment. The investment text will provide substantive legalprotections for investors and investments of each TPP country in theother TPP countries, including ongoing negotiations on provisions toensure non-discrimination, a minimum standard of treatment, rules onexpropriation, and prohibitions on specified performance requirementsthat distort trade and investment. The investment text will includeprovisions for expeditious, fair, and transparent investor-State disputesettlement subject to appropriate safeguards, with discussionscontinuing on scope and coverage. The investment text will protect therights of the TPP countries to regulate in the public interest.
* Labor. TPP countries are discussing elements for a labor chapter thatinclude commitments on labor rights protection and mechanisms to ensurecooperation, coordination, and dialogue on labor issues of mutualconcern. They agree on the importance of coordination to address thechallenges of the 21st-century workforce through bilateral and regionalcooperation on workplace practices to enhance workers’ well-being andemployability, and to promote human capital development andhigh-performance workplaces.
* Legal Issues. TPP countries have madesubstantial progress on provisions concerning the administration of theagreement, including clear and effective rules for resolving disputesand are discussing some of the specific issues relating to the process.TPP countries also have made progress on exceptions from agreementobligations and on disciplines addressing transparency in thedevelopment of laws, regulations, and other rules. In addition, theyare discussing proposals related to good governance and to proceduralfairness issues in specific areas.
* Market Access for Goods. TheTPP countries have agreed to establish principles and obligationsrelated to trade in goods for all TPP countries that ensure that themarket access that they provide to each other is ambitious, balanced,and transparent. The text on trade in goods addresses tariffelimination among the partners, including significant commitments beyondthe partners’ current WTO obligations, as well as elimination ofnon-tariff measures that can serve as trade barriers. The TPP partnersare considering proposals related to import and export licensing andremanufactured goods. Additional provisions related to agriculturalexport competition and food security also are under discussion.
Amongthe market access issues under discussion are textiles and apparel, onwhich the TPP countries agree on the importance of strong commitments.Proposals have been made on a series of related disciplines, such ascustoms cooperation and enforcement procedures, rules of origin and aspecial safeguard.
* Rules of Origin. TPP countries have agreed toseek a common set of rules of origin to determine whether a productoriginates in the TPP region. They also have agreed that TPP rules oforigin will be objective, transparent and predictable and are discussingapproaches regarding the ability to cumulate or use materials fromwithin the free trade area in order to make a claim that a product isoriginating. In addition, the TPP countries are discussing theproposals for a system for verification of preference claims that issimple, efficient and effective.
* Sanitary and PhytosanitaryStandards (SPS). To enhance animal and plant health and food safety andfacilitate trade among the TPP countries, the nine countries haveagreed to reinforce and build upon existing rights and obligations underthe World Trade Organization Agreement on the Application of Sanitaryand Phytosanitary Measures. The SPS text will contain a series of newcommitments on science, transparency, regionalization, cooperation, andequivalence. In addition, negotiators have agreed to consider a seriesof new bilateral and multilateral cooperative proposals, includingimport checks and verification.
* Technical Barriers to Trade (TBT).The TBT text will reinforce and build upon existing rights andobligations under the World Trade Organization Agreement on TechnicalBarriers, which will facilitate trade among the TPP countries and helpour regulators protect health, safety, and the environment and achieveother legitimate policy objectives. The text will include commitmentson compliance periods, conformity assessment procedures, internationalstandards, institutional mechanisms, and transparency. The TPPcountries also are discussing disciplines on conformity assessmentprocedures, regulatory cooperation, trade facilitation, transparency,and other issues, as well as proposals that have been tabled coveringspecific sectors.
* Telecommunications. The telecommunications textwill promote competitive access for telecommunications providers in TPPmarkets, which will benefit consumers and help businesses in TPP marketsbecome more competitive. In addition to broad agreement on the needfor reasonable network access for suppliers through interconnection andaccess to physical facilities, TPP countries are close to consensus on abroad range of provisions enhancing the transparency of the regulatoryprocess, and ensuring rights of appeal of decisions. Additionalproposals have been put forward on choice of technology and addressingthe high cost of international mobile roaming.
* Temporary Entry.TPP countries have substantially concluded the general provisions of thechapter, which are designed to promote transparency and efficiency inthe processing of applications for temporary entry, and ongoingtechnical cooperation between TPP authorities. Specific obligationsrelated to individual categories of business person are underdiscussion.
* Trade Remedies. TPP countries have agreed to affirmtheir WTO rights and obligations and are considering new proposals,including obligations that would build upon these existing rights andobligations in the areas of transparency and procedural due process.Proposals also have been put forward relating to a transitional regionalsafeguard mechanism.
Tariff Schedules and Other Market-Opening Packages
•The TPP tariff schedule will cover all goods, representing some 11,000tariff lines. The nine countries also are developing common TPP rulesof origin, and are weighing proposals now for how to do this mosteffectively and simply.
• Services and investment packages willcover all service sectors. To ensure the high-standard outcome the ninecountries are seeking, the TPP countries are negotiating on a “negativelist” basis, which presumes comprehensive coverage but allows countriesto negotiate specific exceptions to commitments in specific servicesectors.
• Government procurement packages are being negotiatedwith each country seeking to broaden coverage to ensure the maximumaccess to each others’ government procurement markets, while recognizingeach others’ sensitivities.
Next Steps
• Leaders of the nineTPP countries have instructed negotiators to meet in early December, andat that time to schedule additional negotiating rounds./.