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.