Exploring new trade frontiers: Viewing the Trans-Pacific Partnership Agreement through an Agriculture Lens
The Trans-Pacific Partnership (TPP) trade agreement brings together 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam. The deal spans three continents across the Pacific with members at diverse levels of current economic development. Together, TPP members account for 40 percent of global trade.
The TPP trade agreement will be one of the most consequential trade agreements in twenty years, on par with the North American Free Trade Agreement (NAFTA) or China’s entry to the World Trade Organization (WTO).
Assessing the economic significance of the TPP is difficult. The agreement was completed in October 2015. The texts were released in November 2015 and the legally scrubbed texts and schedules were made public in late January 2016.
The 30 chapters in the legal texts run to 622 pages and the various schedules add more than 5,000 pages. Many TPP parties also signed more than 100 bilateral side letters. Totaling up the economic impact of an agreement of this magnitude, with overlapping and interlocking commitments is not easy. The start date is unclear, since ratification procedures are not finished yet.
Once the TPP has been fully implemented, nearly all of the tariffs will be at zero for all of the TPP members moving goods between markets in the agreement.
Provisions of the TPP apply even to sensitive items like agriculture. The TPP could dramatically reconfigure supply chains in food and processed food items in ways that past trade agreements did not.
The deep and broad commitments in the TPP sets up some interesting new dynamics. It is likely to exacerbate tensions in the global trading system that fall most acutely on the smallest, poorest states as companies increasingly “vote with their feet” and shift production, sales and services into TPP member markets and leave behind non-member markets in the region.