Author: Matisse Barbaro

TOPICS DEALT BY THE TRANS-PACIFIC PARTNERSHIP AGREEMENT

On October 5 2015, Mexico and other 11 countries in the Pacific-Asia regional concluded the negotiations of the Trans-Pacific Partnership Agreement ((TPP), for more information, see the Overview of the Trans-Pacific Partnership Agreement). The free-trade agreement (FTA) fixes common standards and it lowers custom-duties between the 12 economies of the Pacific Ocean. The overall objective is to improve the standard of living, to shrink poverty, to promote a more transparent governmental policy and a sustainable economy.

On October 12 2015, the Secretary of Economy published the Executive summary of the Trans-Atlantic Partnership Agreement, which explains the main features, the objectives and the topics of every chapter of the FTA. Not only the TPP recalls some of the World Trade Organization (WTO) Agreements dispositions -such as the national treatment principle, the most-favored nation obligation, and some of the general exceptions included into the General Agreement on Tariffs and Trade (GATT), the Agreement on Trade-related aspects of Intellectual Property Rights (TRIPS) etc.-, but also it completes them by deepening some topics (such as intellectual property, environment, foreign investment etc.). The TPP is divided into 30 chapters, where each one deals with a specific trade-related or cross-trade subject, namely:

  1. Initial Provisions and General Definitions:relationship between the TPP and other international trade agreements between the Member States; general terms definitions.
  2. Trade in Goods:elimination and reduction of tariff barriers and non-tariff barriers.
  3. Textiles and Apparel: tariffs-barrier elimination, specific rules of origin; commitment of custom cooperation.
  4. Rules of origin:definition of “original” goods in order to enjoy the TPP benefits.
  5. Custom Administration and Trade Facilitation:rules to enhance the facilitation of trade, improve transparency in customs procedures, and ensure integrity in customs administration.
  6. Sanitary and Phytosanitary(SPS) Measurestransparent rules, non-discriminatory rules based on science, reaffirming the right to protect human, animal or plant life or health.
  7. Technical Barriers to Trade (TBT)transparent, non-discriminatory rules for developing technical regulations, standards and conformity assessment procedures, while preserving TPP Parties’ ability to fulfill legitimate objectives.
  8. Trade Remediespromotion of transparency and due process in trade remedy proceedings, without affecting the TPP Parties’ rights and obligations under the WTO.
  9. Investmentnon-discriminatory investment policies and protections that assure basic rule of law protections, while protecting the ability of Parties’ governments to achieve legitimate public policy objectives.
  10. Cross-Border Trade in Servicestrade liberalization following the WTO core obligations (such as, the national treatment, the most-favored nation obligation etc.) and other international trade agreements.
  11. Financial Servicescross-border and investment market access opportunities, ensuring the ability to regulate financial markets and institutions and to take emergency measures in the event of crisis.
  12. Temporary Entry for Business Persons: reasonable fees, divulgation of information etc.
  13. Telecommunicationsensuring efficient and reliable telecommunications networks.
  14. Electronic Commerceensuring free flow of the global information and data that drive the Internet and the digital economy, subject to legitimate public policy objectives.
  15. Government Procurement: national treatment obligation and non-discrimination.
  16. Competition Policyprohibition of anticompetitive business conduct, fraudulent and deceptive commercial activities that harm consumers.
  17. State-Owned Enterprises (SOEs) and Designated Monopolies:ensuring that commercial purchases and sales are made on the basis of commercial considerations.
  18. Intellectual Property: making it easier for businesses to search, register, and protect IP rights in new markets; pharmaceutical-related provisions that facilitate both the development of life-saving medicines and of generic medicines.
  19. Labor:promotion of labor rights under the International Labor Organization 1998 Declaration.
  20. Environment:protection and conversation of the environment by addressing environmental challenges, such as pollution, illegal wildlife trafficking, etc.
  21. Cooperation and Capacity Building:in order to help the least-developed Parties that must address particular challenges.
  22. Competitiveness and Business Facilitation:creation of mechanisms to improve the competitiveness of the States Parties.
  23. Development:improvement of the standard of living thanks to economic and commercial integration.
  24. Small- and Medium-Sized Enterprisespromoting the participation of small and medium enterprises into trade in order to enjoy the TPP’s benefits.
  25. Regulatory Coherenceensuring an open, fair, and predictable regulatory environment; encouragement of widely-accepted good regulatory practices.
  26. Transparency and Anti-Corruption: strengthening good governance and combating the corrosive effects bribery and corruption can have on the economies of the States Parties.
  27. Administrative and Institutional Provisionsestablishment the Trans-Pacific Partnership Commission in order to oversee the TPP implementation.
  28. Dispute settlement: rapid resolution of disputes through cooperation and consultation.
  29. Exceptions: flexibility that guaranties the full right of the States Parties to regulate their own public interests. It includes some of the general exceptions of the WTO agreements (such as Art. XX of the GATT 1994).
  30. Final Dispositions: defining the way the TPP will enter into force, the way in which it can be amended, the rules that establish the process for other States or separate customs territories to join the TPP in the future, the way to withdraw from the agreement etc.

This article was meant to give a short overview of the specific subject of each chapter of the TPP. Further, we will submit a more specific analysis of every chapter of the TPP Agreement.

Overview of Trans-Pacific Partnership agreement

Mexico and 11 others  countries, namely the United States (USA), Canada, Chile, Peru, Japan (with which Mexico undertakes Free Trade Agreements, (FTA)), Malaysia, Singapore, New Zealand, Australia, Vietnam and Brunei (with which Mexico does not undertake FTA yet) concluded last Monday, October 5 2015, the negotiations of the Trans-Pacific Partnership (TPP), which is a landmark agreement setting a new standard for global trade for future generations. Such agreement is relevant to Mexico since it will increase new trade opportunities, economic growth and it will contribute to the overall goal of transforming North America into the most competitive region of the world.

The TPP agreement fixes common standards and it lowers custom-duties between the 12 economies of the Pacific Ocean. Moreover, it creates a free-trade zone in the Pacific-Asia region, which covers 40% of the world economy.

The TPP’s defining features describe as follow:

First, it gives comprehensive market access: the TPP will eliminate or reduce tariff and non-tariff barrier across substantially all trade.

Second, it is a regional approach to commitments: the TPP will develop key supply chains and seamless trade, including opening domestic market.

Third, it will address new trade: the TPP promotes innovation, productivity, and competitiveness of new issues, such as the digital era economy.

Fourth, it provides inclusive trade: the TPP includes new elements to ensure that economies at all levels of development can benefit from trade, including trade capacity building.

Lastly, it functions as a platform for regional integration of the Pacific-Asia economies.

The TPP negotiations began in 2008 and they have been controversial due to the secret negotiations undertaken during the past 5 years, as well as due to relevant differences in the automotive industry, agriculture, intellectual property and pharmaceutical products legislation.

Even though an agreement has been reached, the TPP will enter into force only once that the Congress of every Member State will have given its consensus. Nevertheless, this seems to be a mere formality prior its imminent entry into force.

As soon as the treaty becomes public, we will provide a further analysis of the TPP application.