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

pexels-photo-674048.jpeg

Credit: Pexels (free stock photos)

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?

pexels-photo-906982.jpeg

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.

pexels-photo-326410.jpeg

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.