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Trans-Pacific Partnership Free Trade Pact Signed

by Mike Godfrey,, Washington

05 February 2016

The Trans-Pacific Partnership free trade deal was signed by the 12 parties to the deal on February 4, 2016.

The TPP will eliminate or reduce remaining tariff and non-tariff barriers on industrial goods and provide preferential access for trade among the TPP countries. Most tariff elimination in industrial goods will be implemented upon entry into force of the agreement – an expected 86 percent duty-free treatment across all tariff lines – although the tariff elimination for some products will be phased in over a longer period of time.

According to the Peterson Institute for International Economics, the United States will be the largest beneficiary of the TPP, given that it already levies low rates of tax on imports from the signatory countries. For the US, TPP will increase annual real incomes by USD131bn, or 0.5 percent of gross domestic product (GDP), and annual exports by USD357bn, or 9.1 percent of exports, by 2030, when the agreement will be almost fully implemented. The Institute has calculated that annual income gains by 2030 are estimated to be worth USD492bn for all TPP participants.

After signing the deal, the countries said in a joint statement: "We, the Ministers representing Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam, are pleased to announce that we have today signed the Trans-Pacific Partnership agreement. After more than five years of negotiations, we are honored to be able to formalize our collective agreement of TPP which represents an historic achievement for the Asia-Pacific region."

"TPP will set a new standard for trade and investment in one of the world's fastest growing and most dynamic regions. We signatories comprise nearly 40 percent of global GDP, a market of more than 800 million people, and around one third of world trade. Our goal is to enhance shared prosperity, create jobs, and promote sustainable economic development for all of our nations."

"The signing of the agreement signals an important milestone and the beginning of the next phase for TPP. Our focus now turns to the completion of our respective domestic processes," to bring the deal into force.

TAGS: tax | investment | Brunei | Chile | gross domestic product (GDP) | Australia | Mexico | Singapore | Canada | Malaysia | New Zealand | Peru | United States | trade | Japan | Vietnam | Asia-Pacific

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