New TPP Signed, CPTPP
Will the Revised TPP Affect the United States?
The Trans-Pacific Partnership, also known as the Comprehensive and Progessive Agreement for Trans-Pacific Partnership or CPTPP, went into effect on December 31, 2018 after being ratified between the remaining 11 nations. The United States pulled out of the deal in January 2017. The remaining countries included in the free trade pact are Australia, Canada, Japan, Mexico, New Zealand, Singapore and Vietnam. Four other countries, Brunei, Chili, Malaysia and Peru, are expected to sign-on soon.
According to UPI News Online, “Trump said joining the deal wouldn’t have been good for the United States because it increases the trade deficit and sends jobs overseas. The final CPTPP agreement retains all but 22 of the more than 1,000 provisions in the original TPP, led by former President Barack Obama.
One concern and outcome of the new CPTPP is its effect on trade between the United States and Japan. According to UPI News Online, “Under the new deal, Japanese tariffs on Australian beef will be cut 27.5 percent, making U.S. beef less competitive…..Japanese wheat imports from Canada and Australia will also fall in price (about 7 percent) under the CPTPP, putting more pressure on American farmers. U.S. Wheat Associates President Vince Peterson said the price disadvantage could be as high as $14 per metric ton, and the industry faces an ‘imminent collapse’ in Japan.”
However, The United States Trade Representative is already on top of that relationship. On December 21, 2018, the USTR released its negotiating objectives for a possible trade agreement between the United States and Japan.
Some objectives include, but are not limited to:
- Improve the U.S. trade balance and reduce the trade deficit with Japan.
- Secure comprehensive market access for industrial and agricultural goods in Japan by reducing and/or eliminating duties and strengthen disciplines to address non-tariff barriers that constrain U.S. exports.
- Increase transparency in import and export licensing procedures.
- Secure commitments with respect to greater regulatory compatibility to facilitate U.S. exports in key goods sectors, including pharmaceuticals, medical devices, cosmetics, information and communication technology equipment, motor vehicles, and chemicals, and reduce burdens associated with unnecessary differences in regulation, including through regulatory cooperation where appropriate.
- Provide for enforceable and robust Sanitary and Phytosanitary Measures commitments that build upon WTO rights and obligations
- Improve trade facilitation including to provide for automation of import, export, and transit processes, including through supply
chain integration; reduced import, export, and transit forms, documents, and formalities; enhanced harmonization of customs data requirements; and advance rulings regarding the treatment that will be provided to a good at the time of importation.
Other objectives included in the summary touch on technical barriers to trade (TBT), regulatory practices, administration, trade in services, digital trade and cross-border data flows, investment, intellectual property, pharmaceuticals and medical devices, competition policy, labor, state-owned enterprises/small- and medium- sized enterprises, environment, anti-corruption, trade remedies, government procurement, dispute settlement, general provisions, and currency. To read the full summary, click here.
Japan and the United States originally entered into trade talks in September 2018.