TPP11 Explore Plan B Agreement In Japan

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

13 July 2017

Following agreement reached by the remaining signatories to the Trans-Pacific Partnership (TPP) earlier this year to push ahead following US President Donald Trump's withdrawal of the United States from the pact, Japan has taken the lead with regard to formulating a plan B for the agreement.

The Japanese authorities, represented by Kazuyoshi Umemoto, hosted a meeting of representatives from the TPP-11 countries (Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Malaysia, Peru, Singapore, and Vietnam) on July 12.

Had the existing deal been adopted, it would have eliminated most tariffs on industrial goods immediately, with tariffs on some sensitive items phased out over longer timeframes. TPP members had also agreed to eliminate tariffs on textiles and apparel, which are economic growth drivers in several TPP markets.

However, the 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. Now the US has withdrawn, it is impossible to now satisfy those parameters.

There are now concerns that some signatories will withdraw or seek to alter the terms they agreed to now that the US has decided not to proceed with the agreement, given that the US's commitments would have had significant benefits for those territories.

It is hoped that a plan of action can be agreed ahead of the Asia-Pacific Economic Cooperation Leaders' Meeting, due to take place in Vietnam in November.

TAGS: Brunei | Chile | export duty | tariffs | trade treaty | Australia | Mexico | Singapore | Canada | Malaysia | New Zealand | Peru | United States | trade | Japan | Vietnam | Asia-Pacific