Trans-Pacific Partnership will come into force December 2018

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When the terms of the Trans-Pacific Partnership (TPP) was agreed to in March 2018, the largest free-trade agreement in Asia would become effective upon ratification by six out of the 11 participating countries.

On Tuesday October 30th, Australia became the sixth country to ratify the pact meaning tariff cuts will take place as early as December, almost 2 years after President Trump withdrew the US from talks. Brunei, Chile, Malaysia, Peru and Vietnam have yet to ratify the deal.

It is estimated the new TPP trade deal will remove tariffs on an estimated 95% of goods traded among the 11 member countries and a combined GDP of $10 trillion.

If you have any questions how the new TPP deal may impact your business, feel free to contact experienced trade attorney David Hsu at any time, 832.896.6288 or by email at dhsu@givensjohnston.com.

New Zealand to ratify CPTPP (TPP) in December or early January 2019.

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According to Radio New Zealand, the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) will be in force around December of 2018 after New Zealand plans to be the first of six countries to ratify the agreeement.

As of today, Japan, Mexico and Singapore have ratified the agreement with Australia, Chile and now New Zealand soon to ratify.

In addition to the 11 countries, Colombia, Thailand and South Korea along with Britain also expressed interest in joining the CPTPP.

Singapore ratifies trans-pacific trade deal.

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Channel News Asia reported last Thursday that Singapore ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Originally known as the Trans-Pacific Partnership, the name was changed after the Trump Administration withdrew US support for the TPP after some members would not agree to US terms regarding pharmaceuticals and intellectual property protections.

Since the new CPTPP was created, only 3 nations have ratified the agreement (with Mexico and Japan as the only two countries to ratify the agreement. However, last Thursday, Singapore became the third after signing the CPTPP.

Terms of the CPTPP agreement concluded in January 23rd of this year and signed on March 8th. There are still 8 more countries that need to sign in order to ratify the treaty. Once all countries sign, the CPTPP will be in force 60 days later.

Harley Davidson claims new factory in Thailand a result of US withdrawal from the TPP.

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According to a Bloomberg article published April 24, 2018, Harley Davidson motorcycle maker opted in on building a factory in Thailand after the Trump administration withdrew US participation in the Trans-Pacific Partnership (TPP). In the first publicized impact of the US withdrawal from TPP, Harley Davidson CEO Matt Levatich indicated the factory in Thailand was “necessary to access a very important market”.

Additionally, the impact of leaving the TPP was also felt locally for the 260 US jobs lost due to the closure of the Missouri plant amind slumping sales in the US.

As a counterpoint to the article – the article does specify that Harley Davidson has seen sales decreasing in 13 of the last 14 quarters. If accurate, the sales declines started long before the TPP was even discussed and long before the US withdrew from participating in the TPP.

It is further important to note that correlation does not mean causality as Harley Davidson sales in the Asia Pacific region were 32,258 in 2015; 32,889 in 2016 and decreased to 30,348 in 2017. Sales decline of Harley Davidson in Asia occurred well before the US withdrew from the TPP.

I believe the US withdraw from participation in the TPP was used by the CEO to justify two unpopular moves – the building of a factory in Thailand and a closure of the Missouri plant.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) signed on March 8th, 2018.

Last Thursday, the 11 countries participating in the as-formerly-known-as Trans-Pacific Partnership signed the Asia Pacific trade pact without the United States.

The revised agreement known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) aims to reduce tariffs between member countries. One main item left out of the CPTPP (but included in negotiations of the TPP) are the lack of intellectual property protection of pharmaceuticals favored by the United States.

According to the Peterson Institute for International Economics, the CPTPP will generate $147 billion in income, versus an estimated $492 billion in global income benefits under the original TPP.

 

Feel free to contact David Hsu for any questions related to CPTPP or how this trade pact may impact your business, 832.896.6288 or dhsu@givensjohnston.com.