Trans-Pacific Partnership Primer Published May 20, 2013 Updated August 5, 2013 National Journal Presentation Credits Producer: Jenna Fugate Director: Jessica Guzik

The Trans-Pacific Partnership is a Free Trade Agreement Subject to Ongoing Negotiations Updated August 5, 2013 Free Trade Agreements Free trade agreements (FTAs) are arrangements between nations that reduce trade barriers like tariffs and import quotas Trans-Pacific Partnership The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement that aims to liberalize trade of most goods and services and go beyond trade commitments currently established by the World Trade Organization (WTO); the TPP could potentially eliminate tariff and non-tariff barriers to trade and investment among the countries involved and could serve as a template for a future trade pact 2 Source: International Trade Administration.

Countries Currently Participating in TPP Negotiating country Has expressed interest in negotiating Non-negotiating country Analysis The TPP is currently being negotiated among the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam Japan joined the most recent round of negotiations in Malaysia on July 23 Potential future members include Taiwan, the Philippines, Laos, Colombia, Thailand, and Costa Rica There have been 18 rounds of negotiations; each year, more countries join 3 Source: International Trade Administration. Updated August 5, 2013

New Negotiations Take Place as More Countries Join TPP Trans-Pacific Strategic Economic Partnership (P4) initiated as a free trade agreement among Brunei, Chile, New Zealand, and Singapore, aiming to make economies of the Asia- Pacific region more liberal January U.S. agrees to enter talks with P4 about liberalizing trade in financial services September U.S. announces it will begin negotiations with P4 countries to join the TPP November Australia, Peru, Vietnam announce they are joining TPP negotiations October Malaysia announces it will join TPP negotiations November South Korea expresses interest in joining TPP negotiations June Canada and Mexico announce they will join TPP negotiations April Japan announces pending entry into negotiations March Round 1, Melbourne, Australia June Round 2, San Francisco, USA October Round 3, Brunei December Round 4, Auckland, New Zealand February Round 5, Santiago, Chile March Round 6, Singapor e September Round 8, Chicago, USA June Round 7, Ho Chi Minh City, Vietnam October Round 9, Lima, Peru December Round 10, Kuala Lumpur, Malaysia March Round11, Melbourne, Australia May Round 12, Dallas, USA July Round 13, San Diego, USA September Round 14, Leesburg, Virginia, USA December Round 15, Auckland, New Zealand March Round 16, Singapore May Round 17, Lima, Peru New Countries Entering NegotiationsRounds of Negotiations 4 July Round 18, Kota Kinabalu, Malaysia Source: International Trade Administration; Office of the U.S. Trade Representative; Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, Updated August 5, 2013

U.S. Seeks Increased IP Protection, Better Market Access in TPP Negotiations Analysis Among confirmed TPP members, U.S. is negotiating for market access to goods, services, and agriculture with countries with which it does not currently have FTAs: Japan, Malaysia, Vietnam, New Zealand, and Brunei The U.S. is seeking increased intellectual property rights protection, such as requiring criminal penalties for importing counterfeit labeling and packaging, whether done willfully or not, and requiring criminal penalties for pirating video in movie theaters Japan Malaysia Brunei U.S. Imports (In Billions)U.S. Exports (In Billions) $3.4$3.2 $25.9 $12.9 $146.4 $ Trade Concerns The U.S. dairy sector wants protection from New Zealand’s dairy exporters Vietnam New Zealand Brunei $4.6$20.3 $0.1$0.2 Certain U.S. footwear manufacturers have argued for maintaining high tariffs on imported footwear, while Vietnam is pressing for lower tariffs to gain greater access to the U.S. market Trans-Pacific Partnership Countries With Whom U.S Does Not Have Existing FTAs TPP Member 5 Source: International Trade Administration; Office of the U.S. Trade Representative, Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, Updated August 5, 2013

Opponents Concerned That TPP Involvement Compromises U.S. Trade Member countries at varied levels of economic development may not be able to meet U.S. trade standards, forcing the U.S. to make concessions Increased intellectual property rights protection may weaken ability of the U.S. to obtain generic medicines, compromising Americans’ access to affordable medicine Focus on the TPP and other regional/bilateral free trade agreements may divert necessary attention and resources from multilateral WTO initiatives Free trade agreements may complicate commerce, with different rules and standards for different FTAs that companies must take into account when conducting international trade The TPP could impact current U.S. trade policies; for example, there is a question of whether the TPP could preclude the U.S. from negotiating bilateral FTAs, such as an FTA with the EU Sen. Bernie Sanders (I-Vt.) Rep. Henry Waxman (D-Calif.) Rep. Sander Levin (D-Mich.) Rep. John Conyers (D-Mich.) Rep. Jim McDermott (D-Wash.) Rep. John Lewis (D-Ga.) Rep. John Conyers (D-N.Y.) Rep. Earl Blumenauer (D-Ore.) Rep. Lloyd Doggett (D-Tex.) Have expressed concerns about the effect TPP requirements would have on U.S. access to generic medicine: Concerns with U.S. TPP Involvement = 6 Source: International Trade Administration; Office of the U.S. Trade Representative; Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, Updated August 5, 2013

Supporters Believe Successful Negotiations Could Set Positive Precedent The TPP provides the U.S. an opportunity to negotiate a comprehensive and high-standard FTA and protect its trade interests Successful negotiation and implementation of new trade rules proposed in the TPP could set precedent for future WTO negotiations Trade might be further liberalized if other countries in the region consider joining the TPP based on the success of the negotiations (as was the case with Canada and Mexico recently) The TPP could bolster economic policy reforms, particularly for countries such as Vietnam (the WTO is critical of Vietnamese labor rights and intellectual property rights standards), by enforcing higher policy standards and liberalizing trade President Barack Obama Obama supports TPP negotiations as the leading trade policy initiative of the Obama administration, and part of the administration’s “pivot” to Asia Potential Benefits of U.S. TPP Involvement = 7 Source: International Trade Administration; Office of the U.S. Trade Representative, Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, Updated August 5, 2013

TPP Could Have Large-Scale Impact on U.S. Trade Analysis The TPP could have a significant impact on U.S. trade because potential TPP members account for 62% of U.S. trade; confirmed TPP members account for 34% of U.S. trade Certain industries that export to TPP countries will be impacted; the major U.S. merchandise exports to TPP countries are machinery (e.g., computers, turbines, and agricultural equipment), electrical machinery (e.g., integrated circuits, semiconductors, and cell phones), autos, and refined petroleum products U.S. World and TPP Goods Trade (In billions of U.S. dollars) Other Countries Other APEC* China Japan Canada & Mexico Australia, Chile, Peru & Singapore Brunei, Malaysia, New Zealand, & Vietnam Total U.S. Trade (100%) Potential TPP (62%) Current TPP (34%) $ $ $ $ $ $ $ $ $ B B B B B B B B B *China, Hong Kong, Indonesia, South Korea, Papua New Guinea, Peru, The Philippines, Russia, Taipei, and Thailand 8 Source: International Trade Administration; Office of the U.S. Trade Representative; Ian F. Fergusson, William H. Cooper, Remy Jurenas, and Brock R. Williams, “The Trans-Pacific Partnership Negotiations and Issues for Congress,” Congressional Research Service, April 15, Updated August 5, 2013