The Trans- Pacific Partnership (TPP) is a trade pact in the Pacific rim that accounts for roughly 40% of global GDP, and one-third of world trade. Ramifications of the North American Free Trade Agreement (NAFTA) have resulted in skepticism of the TPP impact in North America.
Tariff and quotas: Common in trade pact, tariff and quotas are the two main concern in negotiations. Member countries are engage in complex negotiations to protect their domestic markets and jobs. The pact is an attempt to create a free-trade zone, making protective policies difficult to negotiate.
Environmental, labour and intellectual property standard: The US is seeking to impose rigorous labour and environmental standards on trading partners, aiming to create a level playing ground to match US standards.
Data flow: The US would like member countries to refrain from blocking cross-border data over the internet, and require that servers do not have be in a country to conduct business.
Some countries are resisting that suggestion because it could breach their country’s privacy law.
The US is focused on creating opportunities for its service industries, which account for most of the private jobs in the US economy. Services are not subjected to tariff, but nationality requirements and restrictions on investing can be used to protect local businesses.
Canadian service industries
Over the past decade, services have accounted for three of Canada’s fastest growing export. The services are insurance service, management service, and IT service.
In 2000, services accounted for 12% of Canada’s exports. By 2013, it had reached 15% of Canada’s export.
The strengthening of trade ties with the pacific rim countries can provide benefits Canadian service industries. The creation of more jobs will come along with benefits for the Canadian economy.
Do you see the TPP as an avenue to provide Canadian service industries with opportunities for continued growth?
Picture: Courtesy of Wikipedia