Trans-Pacific Partnership Agreement TPP is a pact aimed to deepen economic ties among the twelve countries and fostering trade to boost growth. Members had also hoped to foster a closer relationship on economic policies and regulation. The agreement was designed so that it could eventually create a new single market, something like that of the EU. These twelve countries that have signed the pact contributed nearly forty percent of the world’s Gross Domestic Product GDP. China has yet to play a decisive role in it.
Participating Nations of TPP-
The Trans-Pacific Partnership was the product of years of negotiations that culminated in 2015 with the endorsement of the 12 nations’ trade chiefs. It is the largest and the most comprehensive trade agreement ever negotiated.
Former President Barack Obama treated trade deals as a priority during his tenure, and this particular deal would have bolstered America’s position in the Asia-Pacific region, where China is growing in influence. In spite of its influential presence, its influence on the geopolitical scenario of the world is still not discussed comprehensively. For Obama, TPP is a triumph of several years of international negotiations. All the 12 nations needed to ratify it in a proper way. All the involved nations should discuss the potential impact of the policies and provisions of TPP.
Why is TPP Beneficial?
- The TPP boosts exports and economic growth.
- This should create more jobs and prosperity for the 12 countries involved.
- TPP would remove foreign tariffs (taxes) and other trade barriers.
- Will set strong and enforceable rules for free and fair trade as well as rules governing e-commerce.
- It increases exports by $305 billion per year by 2025.
- Exporters will benefit from the removal of duties on more types of goods than previous trade agreements provided for.
- It would benefit the machinery, auto, plastics and agriculture industries.
- Regulatory cohesion among TPP nations will help to ease the risks and costs of doing business abroad for small businesses.
- Reduced costs, quicker payment, better cash flow and greater certainty in doing business in TPP markets.
At a time when growth is failing to meet expectations almost everywhere, the TPP seems like a good move. Virtually all economists agree that this shift toward freer trade greatly benefited the world’s citizens and enhanced global growth.
The far-reaching deal, which excludes China, aims to dismantle tariff and non-tariff barriers to trade and investment between the participant countries. It also foresees streamlining regulations, and the implementation of common standards for the protection of foreign investment and intellectual property, among other things. China is not a TPP members but still, it is going to focus on broad Asia-Pacific trade integration through this pact.