ECA

New Dynamic Export Magazine out now: All systems go for landmark TPP11 trade deal

22.10.2018 Tim Michael

It’s been more than a decade in the making. And it’s been the subject of heated debate between supporters and opponents since it was first mooted. But finally, the TPP-11 or Comprehensive and Progressive Agreement for Trans Pacific Partnership as it is more formally known, is now set in stone.

Legislation to eliminate more than 98 per cent of tariffs for 11 countries has passed through both houses of the Australian Parliament.

Recent independent modelling shows Australia could see $15.6 billion in net annual benefits to national income by 2030 because of the deal, says Trade Minister Simon Birmingham, which he describes it as “the world’s most significant trade agreement in more than two decades.”

The TPP-11 will open markets for Australian farmers, manufacturers and businesses across the Americas and Asia, the Minister says.

It delivers reductions in Japan’s tariffs on Australian beef, preferential treatment for products made using Australian wool, better access for wine exporters and clear investment regimes for mining and resources.

The pact includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – countries with a combined GDP of more than A$13.8 trillion.

So why the negativity?

The Labor Opposition while supporting the Bill, has indicated it will negotiate key changes if it wins government.

And several Senate crossbenchers expressed concern that the agreement may not be in Australia’s best interests.

After years of painstaking negotiation by the Obama administration, US President Trump sent shockwaves through the global trade community when he decided to pull out the deal.

As a result, the TPP now covers 13% of the world’s economy rather than 30%.

Other detractors include Nobel Memorial Prize-winning economist Paul Krugman who says “there isn’t a compelling case for this deal, from either a global or a national point of view.”

And Former US Secretary of Labor, Robert Reich, now a political commentator and professor contends the TPP is a “Trojan horse in a global race to the bottom.”

In 2016-17, nearly one quarter of Australia’s total exports, worth nearly $88 billion, went to TPP-11 countries. This will continue to grow as tariffs tumble under the TPP-11.

So what’s not to like? I guess the proof will be in the pudding.

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