After expressing their wish to join the Trans-Pacific Partnership (TPP) in November last year, Canada, Japan and Mexico conducted extensive behind-the-scenes lobbying for the favored invitations to be included in the current negotiations for this expanding Asia-Pacific free-trade pact.
The TPP is a regional agreement aimed at achieving liberalizing trade relations between pact members, as well as agreement on other common regulatory issues.
At the recent June G20 summit in Los Cabos, Mexico, US President Barack Obama — on behalf of all nine current TPP members — extended invitations to Mexico and Canada to join the 13th round of TPP talks to take place in San Diego, California, the following month.
Having given the invitations, Obama notified the US Congress as it has a statutory 90-day period to review any prospective international trade agreements. After the US and all the other TPP members have reviewed these new members, Canada and Mexico will join the 14th round of TPP negotiations in September this year.
Japan’s request to join the TPP pact appears to still be under consideration. However, there are reports of considerable domestic opposition from various economic sectors — such as agriculture including beef, fisheries, cars, insurance and others — that would be affected by the removal of protective regulations.
The Trans-Pacific Partnership began as an economic agreement for freer trade and to harmonize regulatory regimes between four members of APEC forum — namely New Zealand, Brunei, Chile and Singapore — in 2005. This so-called P4 agreement was expanded to nine members with the inclusion of the US, Australia, Peru, Malaysia and Vietnam three years later, and renamed.
Designed to accept new partners and to enhance free trade throughout the Asia-Pacific region, the TPP membership is open to any APEC member country prepared to liberalize its trading and regulatory policies.
As a growing regional free trade zone, the TPP would help regulate members’ access into other members’ markets and ensure fewer obstacles to global supply chains for components necessary for manufacture and export of automobiles, electronics, IT components, and many others.
Many observers around the Pacific Rim see the TPP as a gateway to greater economic opportunities for the regional countries and their business communities within a projected 11-country trade market of 685 million people, with a gross domestic product of over US$20 trillion, and which conducts nearly 30 percent of the world’s trade.
This 11-member TPP grouping would be a substantially larger trading group than the 27-nation EU.
And, with the possible inclusion of Japan in 2013 and South Korea some time after that, the TPP could become the most significant FTA area in the world – as well as both an economic compliment and counter-weight to mainland China’s dynamic economic powerhouse. South Korea recently signed a bilateral free trade agreement with the US.
The Canadian and Mexican economies are already integrated into the US economy through the 1994 North American Free Trade Agreement that increased the various production supply chain links between the three countries. This has led to the US being the number 1 export market for both Canada and Mexico.
However, as Canadian Prime Minister Steven Harper recently stated, acquiring TPP membership was the crucial next step towards “opening new markets and creating new business opportunities leading to jobs, growth and long-term prosperity.”