PRESIDENT OBAMA’S APPROACH TO ASIA-PACIFIC

Trans-Pacific Partnership

Betsy BarrientosMarch 5, 2012

Agenda

TPP Overview

TPP Components

President Obama’s Approach

U.S. National Interests Commonwealth of Virginia

Potential Impediments to the Agreement

Policy Analysis

Q & A

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Overview

TPP Origins

Into force in 2006

Trade liberalization in the Asia Pacific Region

Original signatories: Brunei, Chile, New

Zealand and Singapore

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Overview

Original Brunei, Chile,

Singapore, NZ

In NegotiationAustralia, Malaysia,

Peru, Vietnam, USA

Potential MembersCanada, Japan,

Mexico

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Overview

Notably missing:

China

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Overview

Geographically diverse

Comprehensive trade agreementElimination of all tariffs among all countries

by 2017 (99% with Brunei)

Negative list for Services and Investments - unless specifically mentioned, a category is assumed to be covered by the agreement

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Overview

Includes:

sanitary and phytosanitary standards

technical barriers to trade

competition policy

IPR

government procurement

environmental and labor standards

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President Obama’s Approach

“America’s first Pacific President” - November 2009

“... the Asia Pacific region is key to achieving my goal of doubling U.S. exports and creating new jobs."

- November 2011

Increase engagement in all aspects of its relations with countries in the region

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President Obama’s Approach

Strategic alliances with Philippines and Australia

Clinton’s visit to Myanmar

Conditional food aid to North Korea

President Obama’s 10-day trip to Asia

TPP main trade objective of the Administration

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TPP Agreement:U.S. Policy Objectives and Interests

Expand and increase trade

Shape economic interactions in the region

Positive engagement and commitment to AsiaCatalyst for other Asian Pacific countries to

join the TPP agreement

Trans-Pacific integration vs. intra-Asian

integration

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Specific Areas of U.S. National Interests

Agricultureincrease regulatory coherence, eliminate

redundancies in testing and certification of food and animal and plant health

Manufacturinglinkages to supply chains across the region

Intellectual Property RightsFollow TRIPS; trademarks, copyrights, patents, trade

secrets, etc

Green growth and e-commerceillegal subsidies to fisheries, illegal wildlife tradetaxing of electronic transactions, authentication of

online transactions, consumer protection

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Concerns for the Commonwealth of Virginia

Tobaccoleaf and products not included as part of

the agreement

no protection or incentives for this sector

industry might be at a disadvantage as it has limited access to a global market

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Risks

Regional agreement undermines WTO and Doha Round

Trade diversion: lower tariffs of an agreement causes trade to be diverted away from a more efficient producer outside the bloc

“Spaghetti bowl” effect: overlapping and inconsistent FTAs

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Impediments

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Potential Impediments

AgricultureNew Zealand’s dairy products could have

improved access to US market

Japan’s politics and government policies relating to agriculture (rice).

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Potential Impediments - Con’t

Intellectual PropertyInconsistent policies among countries

Copyright and patent terms that adhere to US standards, e.g. endless copyright terms

Strong emphasis on pharma and multi-media

Elimination of parallel trade on copyrighted materials

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Potential Impediments - Con’t

Access to Medicine Seize shipments of drugs on suspicion on IP

infringement and to increase damages from IP infringement

Increase of data exclusivity - prevents existing clinical trial data to be shared with makers of generic drugs

Increase of duration patent terms - could delay competition of generic brands

Access to affordable medicine for developing countries

Schemes of subsidized medicine in New Zealand

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TPP: Policy Analysis

FTAs already signed with most TPP countries; trade barriers low

Market size of countries small, if considered individually

Is the TPP an economic agreement? Yes, for the most part… it has the potential to be much

more

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TPP: Policy Analysis

As an economic agreement, TPP could raise standards for market access and bridge differences between American and Asian regions

Potential to represent about 40% of total global trade

AND

Establish a new framework for future FTAs

Enable “presence” in the region and thus influence economic and strategic initiatives

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TPP: Policy Analysis

Intellectual Property

TRIPS+ may not be suitable for all TPP countries

Undermine alternative IP standards

Potential to negatively affect health sector in some countries

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TPP: Policy Analysis

As an alternative, US could update IP and copyright laws and engage in patent reforms IP and copyright laws set in the 1970s

Guidance and consultation from additional industries, other than pharmaceutical and recorded media.

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TPP: Policy Analysis

Also consider the challenges of the following:

President Obama may seek trade promotion authority (TPA)

For Asia, TPP is not the only option to increase trade ASEAN +3, bilateral agreements

If TPP agreement fails, U.S. could see its position weakened in the region

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QUESTIONS?

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