It’s a big deal!

TPP is a big deal – a seriously big deal.

It’s a big deal in terms of its economic coverage, with a combined GDP across the 11 participants of almost $US21 trillion and $US4.4 trillion of goods and services exports.

It’s a big deal in terms of the potential welfare gains too.  By 2025, New Zealand alone could be better off to the tune of $NZ2.1 billion just from the trade liberalization benefits and our exports are expect to rise by almost $NZ4 billion.

And it’s a big deal in terms of the impact this agreement might have in enticing other nations to join, particularly those from APEC and specifically Japan, Korea, Russia and China.

Two papers released recently by US think tanks make some interesting observations.  The Wilson Centre paper “Negotiations for a Trans-Pacific Partnership Agreement” notes there is significant benefit for the US in the elimination of trade barriers with 4 new countries – New Zealand, Brunei, Malaysia and Vietnam.  The authors were also enthusiastic about the prospect of Japan joining the talks.  They note it is the best opportunity at the moment for developing trade rules for the 21^st century and endorse the point made above about the momentum TPP generates for an APEC wide free trade area.

The Petersen Institute released “Understanding the Trans-Pacific Partnership” last month.  It is available on line and seeks to address a lack of understanding of the progress being made and the complexity of the issues being dealt with in the TPP negotiations.  The authors look at some of the sticking points in the negotiations discussing agriculture, IP, services and investment, capital controls, environment and labour.