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US Negotiators Told TPP Should Be 'Gold-Standard' Trade Treaty

by Mike Godfrey, Tax-News.com, Washington

29 August 2012


A report released by the Information Technology and Innovation Foundation (ITIF) and entitled ‘Ensuring the Trans-Pacific Partnership Becomes a Gold-Standard Trade Agreement’ warns United States negotiators that entering into a sub-standard treaty would be far worse than not joining the agreement at all.

The ITIF report notes that the 14th round of negotiations toward the TPP agreement will begin in September 2012. However, it says, “while the US is doing the right thing in pursuing deeper economic and trade integration with key Asia-Pacific partners, the effort will only be worth it if it concludes with a gold-standard trade agreement that sets the standard for future trade deals the US enters into.”

The TPP now involves 11 countries - Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the US - that have come together to deepen economic integration and collaboration across the Asia-Pacific region by negotiating a comprehensive free trade agreement, that can serve as a platform for broader regional integration by holding the potential to enroll additional partner countries.

It is pointed out that the region is vitally important to the US, as TPP-member countries account for 34% of US trade, while Asia-Pacific Economic Cooperation countries overall account for 63%. On that basis alone, the US needs “to hold the nations that sign it to the very highest standards.”

The ITIF calls on US trade negotiators to insist that the TPP should include the highest levels of intellectual property rights (IPR) protection; transparency in government procurement practices; the removal of non-tariff barriers, including barriers to foreign direct investment; comprehensive market access provisions and substantial conventional tariff reductions; and stringent enforcement mechanisms. If the TPP is anything less than a ‘gold-standard trade agreement’, the ITIF called on the US to keep negotiating.

"ITIF believes that it's more important to get the TPP right than to get it done right away," said ITIF Senior Analyst Stephen Ezell, the report's chief author. "This is an opportunity to raise the bar and not merely codify the status quo. It would be a grave mistake for the US to enter into a weak or substandard trade agreement."

The report confirms that IP is “essential to America's economic recovery”, and that the combination of expanded free trade and strong IPR would be a powerful driver of innovation to spur the development of novel products and services. If TPP-member countries hope for innovation to flourish, then they should seek to secure strong IPR protection.

It continues, however, to consider that “the past year has seen insufficient, albeit some, progress by TPP parties in removing trade barriers. For instance, six TPP parties remain on the Special 301 Watch or Priority Watch Lists of the US Trade Representative (USTR), which identify countries that provide inadequate IPR protections, signalling that significant IPR protection issues persist among TPP countries.”

“Significant barriers to foreign direct investment, especially in the telecommunications sector, remain in many TPP countries,” it adds. “In fact, a comparison of USTR’s ‘2011 and 2012 National Trade Estimate Reports on Foreign Trade Barriers’ - which documents countries’ significant barriers to trade, whether they are consistent or inconsistent with existing international trade rules - reveals some improvement over the past year, but more so the persistence of the majority of the previously documented trade barriers among TPP partners.”

"The TPP represents the US' most important trade agreement negotiation of the past decade, and will help set the terms of trade in the Asia-Pacific region for many years to come," said former USTR Charlene Barshefsky. "It is critical that the US focuses on negotiating a high-standard agreement that promotes innovation - which is the life-blood of our economy and our international competitiveness - by creating market opportunities for 21st century industries (and) avoiding free-riding on US innovation through strong IP rules.”

The ITIF itself concludes that the TPP “holds the potential to represent a transformative model trade agreement that charts the path for future trade agreements that are more comprehensive than current WTO-based agreements and that have stronger enforcement mechanisms.”

However, while “the Administration understandably desires to score a quick win on trade, particularly in an election year and with the country facing the prospect of prolonged unemployment and economic stagnation, … if the TPP ends up being anything less than a gold-standard trade agreement, the US should decline to join.”

TAGS: tax | Brunei | Chile | law | intellectual property | tariffs | trade treaty | Australia | Mexico | Singapore | enforcement | agreements | Canada | Malaysia | New Zealand | Peru | United States | import duty | standards | trade | Vietnam

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