Member-States of Trans-Pacific Partnership Account For 40% of the Global GDP

On 5 October 2015, negotiations were over on establishment of the Trans-Pacific Trade Partnership (TTP) which numbers 12 states of the Pacific Region, including the world’s largest economies, such as the US, Canada, Japan and Australia.

The agreement united the countries which produce about 40% of the global GDP. The partnership’s main goal is to speed up economic growth, promote competition, create new jobs, stimulate investment activities and simplify conditions of exit by representatives of the private sector of the member-states of the agreement to international markets.
It was declared that the agreement’s objectives were as follows: reduction of trade barriers related with tariffs, identification of the general approaches to regulation of intellectual property rights, compliance with environmental and labor standards and settlement of investment disputes.
Actually, the TTP has become an expansion of the Agreement on the Tran-Pacific Strategic Economic Partnership which was signed by Brunei, Chile, Singapore and New Zealand in 2006. The negotiation process on conclusion of the agreement started as early as 2012, however, it dragged till June 2015 due to issues related to regulation of the agricultural sector, intellectual property rights and trade in services.
According to the outputs of the research of the CEPR, a US-based analytical center for economic and political issues, the partnership will contribute to growth of 0.13% on average in GDP of the member-states by 2025. Such sectors of the economy of the member-states as agriculture, the automotive industry and the pharmaceutical industry will become more open. For example, in the long-term prospect the export of pork fr om Japan will increase by 150% due to a reduction of customs duties from 39% to 9%, while the Canadian motor market becomes more attractive to other member-states due to reduction of non-tariff barriers. The agreement will lim it the pressure of state corporations on the private sector of the member-states as regards trade and investments.
Undoubtedly, the new economic partnership has political frameworks, too. So, a key political goal of the agreement is opposition to China in the global trade system and circumvention of the existing agreements on economic cooperation in the region with China’s participation, such as the Agreement on the Asia-Pacific Economic Cooperation. In addition to the above, the position of China in the region is complicated due to the protracted negotiations on establishment of the Regional Comprehensive Economic Partnership (RCEP) in which the world’s 16 leading economies, including such member-states of the TTP as Australia and Japan are going to participate.
Yuri Zaitsev, Senior Researcher