TPP: a breakthrough, yes - but still far from a done deal
Don't break out the champagne just yet. The Trans-Pacific Partnership agreement hammered out on Monday has to be first ratified by the 12 countries' domestic legislatures.
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IN A DRAMATIC, last-minute breakthrough, trade ministers from a dozen countries in the Americas and Asia Pacific reached a deal on Monday to secure a Trans-Pacific Partnership (TPP) agreement. Should it be ratified by domestic legislatures, the landmark deal will represent the biggest regional free-trade agreement (FTA) in history, and be the largest trade deal struck since the 1994 completion of the Uruguay Round which created the World Trade Organization (WTO).
The deal is important not just because the 12 countries (the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) encompass around 40 per cent of world gross domestic product (GDP); in addition, the TPP has an important rules-setting component and US President Barack Obama has asserted that the treaty will enable Washington - rather than Beijing - to create the foundation stone for "21st century trade rules", including standards on trade, investment, data flows and intellectual property (IP).
As Mr Obama noted on Monday, "when more than 95 per cent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy. We should write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment."
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