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Trans Pacific Partnership May be Finalised by the end of 2012

The Trans Pacific Partnership (TPP) is the Australian Government’s highest trade policy priority for 2012. The agreement, which is currently being negotiated by ministers from Brunei, Chile, New Zealand, Singapore, Vietnam, Australia, Peru, the USA, and Malaysia, is intended to create a tariff-free Asia-Pacific, which would account for about 55 per cent of global GDP and 45 per cent of global trade. Japan, Mexico and Canada have also expressed an interest in joining the TPP negotiations.

The TPP could potentially result in new opportunities for Australian exporters through increased market access for the provision of goods and services. Australia currently trades about $120 billion AUD worth of goods and services with these trading partners. Source:

Australia has a number of bi-lateral and multilateral free trade agreements with many of the TPP countries including New Zealand, Chile, the USA, Singapore, and Brunei, Malaysia and Vietnam under AANZFTA. However, we note that importers often find that importing under one free trade agreement may be simpler administratively or may grant a more favourable duty rate than importing under another. For this reason, importers need to understand the rules of origin, regional value content requirements, administrative burden and other requirements of each FTA they may trade under to determine which FTA is the most appropriate for their purposes.

We may see the TPP come into force by the end of 2012. As the global balance of power seems to be shifting from Europe and North America towards Asia, the US, worried about its declining regional influence and the rise of China in the region, has proposed to finalize the Trans-Pacific Partnership agreement by the end of 2012. The agreement, which excludes China, would presumably help the US to restore their influence in the region.

Australia will be hosting the next round of negotiations in March 2012 in Melbourne.

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