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.

Japan and Peru seek early implementation of TPP.

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According to Retuers, Japan and Peru’s foreign ministers are working on an early implementation of the Trans-Pacific Partnership to promote free trade between the two countries. Currently there are 11 members to the TPP. While an agreement has been reached between the parties, the implementation is not yet effective until enough countries ratify the agreement.

Japan has already ratified the pact, but 5 more countries need to ratify before the TPP will take effect.

One main reason for the Japan, Peru efforts may be due the year 2019 marking the 120th anniversary of Japanese immigration to Peru.

If you have any TPP questions or other trade, import, or customs questions, contact David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

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.

Trump claims Harley Davidson using tariffs as an excuse to close US plant and move to Thailand.

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Back in April 27th of this year, I wrote on my blog post here that I suspected Harley Davidson was using international trade, tariffs and the US withdraw of the TPP as excuses for two unpopular moves by the company: (1) closing a Missouri factory and (2) moving production to Thailand.

As Harley Davidson is a foreign entity in Thailand, it is not easy for Harley Davidson to just decide to open a factory in Thailand overnight, here’s why you can’t just open a factory overnight –

It takes time and planning, sometimes years of planning – corruption and lack of transparency in government and state agencies, high tariffs on imports (ad valorem tariffs from 50-80% according to export.gov), changes in Thailand’s legal frame work increasing rule of law and consumer protection, higher insurance premiums and a lengthy patent registration process (export.gov claims the patent process may take several years). This doesn’t include the time to find the space, building or retrofiting an existing factory, hiring and training a local work force, working out the logistics to get supplies to the assembly line and then all the permitting, registration and other red tape needed.

Today, July 26, 2018, U.S. President Donald Trump accused Harley-Davidson of using trade tensions as an excuse to move production overseas:

<blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced &amp; unfair trade is, but we will fix it…..</p>&mdash; Donald J. Trump (@realDonaldTrump) <a href=”https://twitter.com/realDonaldTrump/status/1011568906992017408?ref_src=twsrc%5Etfw”>June 26, 2018</a></blockquote>
<script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>

Reuters reported that the plan for the Thailand-made motorcycles would be shipped to the EU to avoid any potential tariffs on US goods. It is estimated the tariffs could cost anywhere from $90 to $100 million per year. The Reuters article also mentioned the move would not result in retail or wholesale price increases in the EU.

Check back for more updates as they become available.

Japan passes law to ratify Trans-Pacific Partnership trade deal.

As reported by the Kyodo News – the Japanese government enacted a law to ratify the TPP free trade deal. As you are aware, Japan and 10 other nations (Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) continued negotiations with the free trade deal after the United States withdrew. The TPP deal requires at least 6 member countries to ratify the pact before it takes effect.

More TPP updates as they become available. If you have any trade or customs questions, please feel free to contact David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

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.

Does President Trump want the US to become the 12th TPP member?

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According to a Daily Caller website article published today, President Trump asked Ambassador Robert Lighthizer and National Economic Council director Larry Kudlow to look into rejoining the trans-pacific partnership. The Daily Caller cites Senators Ben Sasse and Pat Roberts as the source of the news.

Sasse noted that Trump “deputized” Kudlow to “go get it done” and explore the possibility of rejoining TPP as the 12th party now that the other 11 nations have struck a deal. “It might be easier for us to join now, as opposed to long process,” he elaborated.

No other details are mentioned in the article but updates will be posted they are available.

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.

Final version of the Trans-Pacific Partnership trade deal released.

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According to February 20th Reuters article, the remaining 11 members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have finalized the trade pact set to be signed in Chile on March 8th. After signing, the trade deal provisions will take effect at the end of 2018 or the first half of 2019.

Reports indicate the final version removes or changed 20 provisions regarding intellectual property that were originally included by the United States. Also known as “TPP-11”, the remaining parties believe the trade pact will benefit all members economically across all job sectors. The 11 member countries are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Check back here for more updates. If you have any trade or customs law questions, contact David Hsu at 832-896-6288 or dhsu@givensjohnston.com.