What is the Trans-Pacific Partnership Agreement?
The Trans-Pacific Partnership (TPP) Agreement is a regional trade agreement that the United States is negotiating with 11 other Asia-Pacific countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam). The goal of the ongoing negotiations is to produce a comprehensive and high-standard agreement that supports economic growth and jobs and addresses 21st century trade issues. Another aim is to expand the TPP over time to include additional Asia-Pacific countries and eventually cover a region that represents more than half of global output and over 40 percent of world trade. The United States joined the negotiations in 2010, and the negotiating countries are striving to complete the negotiations. The Office of the United States Trade Representative is leading the negotiations for the United States and has been consulting with Congress and private sector stakeholders on issues at all stages of the negotiations.
Why is the TPP Agreement Important for the United States?
The TPP negotiations are the cornerstone of U.S. economic policy in the Asia Pacific. The regional TPP agreement will expand trade and investment with the six TPP countries that are existing bilateral U.S. free trade agreement (FTA) partners and open new markets in the five countries that are not current FTA partners, including Japan, the world’s third-largest economy. By setting reciprocal, enforceable trade rules generally and establishing disciplines in key new areas of interest to the United States, a high-standard TPP agreement will promote U.S. innovation and economic growth and support American jobs.
What Issues will the TPP Agreement Address?
The TPP agreement is expected to address the types of issues that the United States has included in its past FTAs, such as market access for goods and services, the protection of intellectual property, strong investment protections including investor-state dispute settlement, and government procurement. It is also expected to establish disciplines in such new areas as competition with state-owned enterprises (SOEs), the protection of cross-border data flows, emerging issues related to intellectual property rights, and regulatory cooperation. The TPP countries have agreed to use the U.S. approach of negotiating services, financial services and investment commitments on a “negative list” basis (i.e., all commitments are binding on a TPP country unless it explicitly excludes itself from a commitment), which should lead to substantially increased market access opportunities for the United States.
How Important are the TPP Countries for U.S. Exports and Jobs?
With a combined population of 486 million and generating roughly 15 percent of global trade, the other 11 TPP countries are critical markets for U.S. goods and services exports. Every state stands to benefit from increasing commercial engagement with these countries, as does the overall U.S. economy. For example:
- In 2013, the United States exported about $700 billion in goods and $178 billion in services to the current TPP countries. Combined, the TPP countries represent the largest market for U.S. goods and services exports in the world. Forty-four percent of U.S. goods exports went to TPP countries in 2013.
- In 2013, trade – exports and imports of goods and services – with TPP countries supported an estimated 15.3 million American jobs.
- The United States exported about $612.1 billion worth of goods and $127.3 billion worth of services in 2013 to the six TPP countries that are current FTA partners – Australia, Canada, Chile, Mexico, Peru and Singapore.
- The TPP will open new markets for the United States with five countries that are not current FTA partners – Brunei, Japan, Malaysia, New Zealand and Vietnam. The United States exported $87.0 billion in goods and $51.1 billion in services in 2013 to these “new FTA” TPP countries.
- Companies headquartered in TPP countries have invested more than $660 billion in the United States and employ more than 1.6 million Americans.
For more detailed information on the TPP and the issues being negotiated, visit USTR’s TPP website at: http://www.ustr.gov/tpp.