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Agreement Reached On New Trans-Pacific Partnership

by Mary Swire, Tax-News.com, Hong Kong

24 January 2018


Ministers from 11 countries have announced their agreement upon the "core elements" of a new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The announcement was made on January 23, 2018, following an officials-level meeting in Tokyo. According to a joint ministerial statement, ministers agreed to incorporate certain provisions outlined the original Trans-Pacific Partnership (TPP), but also to suspend a number of others.

The 11 countries are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The statement said: "Ministers agree that the CPTPP maintains the high standards, overall balance, and integrity of the TPP while ensuring the commercial and other interests of all participants and preserving our inherent right to regulate, including the flexibility of the parties to set legislative and regulatory priorities."

"Ministers also affirm the right of each party to preserve, develop, and implement its cultural policies. Ministers consider that the CPTPP reflects the desire of the parties to implement the TPP outcomes among themselves."

Among the measures from the original TPP to have been suspended are:

  • Obligations on patent term adjustment, which would have required parties to adjust the patent term to compensate for "unreasonable" patent office delays, as well as on patent term restoration for marketing approval delays;
  • An obligation on the term of protection for copyright and related rights;
  • Provisions related to Investment Agreements and Investment Authorizations; and
  • The application of investor-state dispute settlement to Minimum Standards of Treatment provisions in the Financial Services Chapter.

It is expected that the CPTPP will be signed in March in Chile.

Australian Trade Minister Steven Ciobo said that the new agreement will eliminate more than 98 percent of tariffs in a trade zone with a combined GDP of AUD13.7 trillion.

The original TPP was signed in February 2016, and would have encompassed a marketplace with 800m people and about 40 percent of global gross domestic product. Approximately 86 percent of tariffs on industrial goods would have been eliminated by the agreement. However, in his first executive order as US President, Donald Trump withdrew the US from the TPP.

The original text provided that the deal could only enter into force once approval had been sealed from at least six countries representing at least 85 percent of the TP12's combined GDP. Once the US withdrew, it became impossible to satisfy those parameters.

In May 2017, the remaining 11 signatories to the TPP agreed to seek an accord without the US. In November, Ciobo said that there were "the very strong core elements of a deal," and that at one stage an agreement had been reached between the 11 trade ministers, which was then recommended to the countries' respective leaders. However, objections were raised by Canada, and a planned leaders' meeting was cancelled.

One of Canada's main objections had related to "a cultural exception," primarily involving broadcast policy. Francois-Philippe Champagne, Canada's International Trade Minister, said that the Government had achieved "a significant outcome on culture as well as an improved arrangement on autos with Japan, along with the suspension of many intellectual property provisions of concern to Canadian stakeholders."

TAGS: investment | free trade agreement (FTA) | Brunei | Chile | export duty | intellectual property | copyright | tariffs | trade treaty | investment treaty | Australia | Mexico | Singapore | agreements | Canada | Malaysia | New Zealand | Peru | import duty | standards | trade | Japan | Vietnam | Invest

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