We are TPP enthusiasts! The benefits of TPP as it was originally agreed in 2016 were expected to be substantial for New Zealand. Now, the retooled TPP, the ‘Comprehensive and Progressive TPP’, or CPTPP, once finally ratified, also looks set to offer significant benefits for New Zealand exporters and households, and will mean that New Zealand has had a hand in crafting the future trade rules for the most dynamic region in the global economy.
So, what is TPP?
Trans-Pacific Partnership – a.k.a. TPP – is an agreement which was signed by twelve Asia-Pacific economies on 4 February 2016. The agreement was aimed at bringing down barriers to trade and investment in the region. TPP established a new set of rules which would make the way that New Zealanders (and the other TPP members) traded with each other simpler and fairer, and would mean that it was easier and cheaper to do business with each other.
New Zealand was one of the original visionaries for the TPP agreement, along with Brunei, Chile and Singapore. Australia, Canada, Japan, Mexico, Peru, the United States, Vietnam and Malaysia all subsequently joined the negotiations and signed the agreement. Both New Zealand and Japan subsequently ratified the TPP and other member economies had approval processes in train.
On 24 January 2017, however, newly-elected United States President Donald Trump signed an Executive Order withdrawing the United States from TPP, confirming a campaign commitment he had made.
What’s happening now with TPP?
After an intensive process of engagement among the remaining eleven TPP members throughout 2016 and 2017, Ministers and Leaders representing the eleven member economies met in Da Nang, Viet Nam, in November 2017 on the sidelines of the annual APEC Economic Leaders’ Meeting. Ministers were able to agree the core elements of a revised TPP agreement, now renamed as the ‘Comprehensive and Progressive Trans Pacific Partnership’, or CPTTP.
Ministers agreed to suspend a number of the most controversial parts of the original TPP. They also agreed that there should be no change to the goods market access outcomes contained in the original TPP. New entry-into-force provisions (requiring that only six member economies ratify before the agreement enters into force), and new rules around withdrawals and accessions of new members were also included. (Potential new members that had expressed an interest in joining the original TPP include Thailand, the Philippines, South Korea and other members of APEC.) Four technical issues require further work and discussion before the CPTPP can be finalised. Discussions are ongoing to that end. Member economies are aiming to have the completed Agreement signed within the next few months.
The revised agreement satisfies the five conditions that the Labour-led Government had laid out for a revised TPP. Like all free trade agreements, once the CPTPP has been concluded, the Foreign Affairs, Defence and Trade Select Committee will scrutinise the agreement and Parliament will consider the necessary legislative changes needed to give effect to the agreement.
How can I find out more about TPP and CPTPP?
MFAT’s website is a great guide to all things TPP/CPTPP. Check out the details of the original agreement here. The MFAT website is also likely to include the text of the finalised CPTPP in due course. In the meanwhile, the core elements agreed by CPTPP Ministers in Da Nang, Viet Nam, in November 2017 can be found here, and the provisions that Ministers agreed to suspend from the original agreement, along with the four specific items that need to be finalised before signature can take place, can be found here.
What’s in TPP for New Zealand ?
What’s in it for the Asia Pacific region?
How can we evaluate the benefits of TPP
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Should we be concerned about TPP and investor state dispute settlement?
What does the New Zealand Government think about the “new” TPP (CPTPP)?
What does the NZIBF think about CPTPP?
What did the 11 CPTPP Ministers agree in Viet Nam in November 2017?
Which provisions of the original TPP have Ministers agreed to suspend in the CPTPP?