Trans-Pacific Partnership (TPP) Negotiations Concluded


Posted By: Selerant RSA

 

Trans-Pacific Partnership (TPP) agreement was finally signed on October 5, 2015, after several years of negotiations. This crucial deal sees Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam, as protagonists, representing some of the world’s most robust economies and covering more than 40 percent of global trade.

TPP will see reduction or even deletion of burden tariffs and quotas and will greatly affect agricultural and food sectors.

Reactions are controversial, as usual for big changes like this one. Many governments are welcoming the agreement as a significant step forward to protect intellectual property, cultivate the digital economy, and combat trade and investment protectionism.

One of the most vocal ones is the US, with an official note from President Barack Obama applauding the agreement as a thing “that reflects America’s values and gives our workers the fair shot at success they deserve”.

For now, China is excluded from the deal. Consequently, challenging China’s raising economic power can also be considered as a political implication of the TPP agreement.

Another context under which TPP agreement can also be perceived are the ongoing negotiations between the EU and the US, under the Transatlantic Trade and Investment Partnership (TTIP). The negotiations have so far proven to be difficult and controversial, especially as perceived by the public and when food safety is concerned

The food industry has so far not been an enthusiastic supporter of the TPP final result. This is particularly true for the dairy industry. An example being New Zealand’s dairy sector that would have wished for more efforts in eliminating trade burdens. The agreement will reduce duties and expand quotas, however there will be no duty abolishment for dairy products. That would have been beneficial for New Zealand as a major global exporter of dairy products. New Zealand Prime Minister has officially commented on the TPP: “We’re disappointed there wasn’t an agreement to eliminate all dairy tariffs, but overall it’s a very good deal for New Zealand”.

Others dairy stakeholders, like Dairy Farmers of Canada, have expressed concerns over the simplification of benefits the new rules are supposed to bring to the free-movement of dairy goods. TPP will bring to Canada more opportunities to export its milk, but at the same time more dairy products will be imported (as a result of the increase of quotas for dairy products), likely reducing the milk price.