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TRANSCRIPT
Structure and tariff impact of the
TPP agreement
KNIAHIN D., MIMOUNI M., NGAVOZAFY A., PICHOT X., RINDERKNECHT L.
January 2017, International Trade Centre
Part 1. ITC’s contribution to the analysis of
the TPP
2
TPP is the biggest FTA ever concluded
The TPP aims:
To promote comprehensive market access, by reducing tariffs
and NTBs;
To facilitate the development of supply chains among its
members.
Intra-TPP Trade in
2015: $2 trillion
(11% world trade)
Intra-TPP trade flows$2 trillion (2015)
Exports Imports
Most of intra-TPP trade is between NAFTA countries.
Trade among TPP members is already covered by
37 trade agreements
• 28 bilateral, 5 regional trade
agreements and 4 GSP
schemes were in force as
of conclusion date.
• Tariffs are already low in
international comparison.
• The TPP agreement will
further lower them,
including tariff peaks.
Combination of 2 Tariff databases
from 2014-2031 & from 2017 to 2046
- Development of a Tariff-line level database with dismantling schedules of
existing FTAs between TPP countries from 2014 to 2031
- Inclusion of tariff dismantling schedules of the new TPP agreement from 2017
(EIF) to 2046
- Conversion of specific duties and TRQs into AVEs based on MAcMap
methodology
- Aggregations were provided on HS6-digit level for international comparisons.
Additional sector aggregations were made at the GTAP sector level.
7
Transparency and dissemination
- New module on
MacMap: “TPP tariffs”
- GTAP database format
- Customizable
visualizations of tariff
dismantling: FTA and
FTA+
8
Visit now!
Go to MacMap create an account and then go to
Advanced Analysis TPP tariffs
http://www.macmap.org/countryanalysis/countrystatistics/GlobalAnalysis.aspx?s=2
Part 2. Tariff liberalization under TPP
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Status of existing FTAs among TPP countries are
different:
10
In US market, phasing out is
almost complete
In Vietnam’s market, phasing out
is ongoing
Most of tariff liberalization occurs on EIF of TPP
11
Without TPP: tariff cut implementation under current FTAsVietnam continues to reduce tariffs under FTAs
Most of tariff reduction occurs upon entry into forceSensitive sectors will be liberalized mostly by 2031
Upon EIF of TPP, 96% of intra-TPP trade will become duty-free and 99.7% will
become duty-free by the end of implementation.
92% of intra-TPP trade is already duty-free
Scope of liberalization
15
MFN FTA FTA+ FTA FTA+
INTRA-TPP 58.2% 91.9% 95.9% 92.3% 99.70% 2046
AUSTRALIA 56.4% 91.8% 98.5% 93.1% 99.96% 2020
BRUNEI DARUSSALAM 67.2% 94.0% 96.7% 94.1% 100.00% 2023
CANADA 64.1% 97.4% 98.5% 97.4% 99.72% 2028
CHILE 0.7% 99.3% 99.4% 100.0% 100.00% 2024
JAPAN 79.5% 86.2% 93.0% 87.0% 97.69% 2032
MALAYSIA 80.3% 96.0% 98.2% 96.0% 100.00% 2032
MEXICO 68.2% 99.3% 99.5% 99.3% 99.97% 2032
NEW ZEALAND 70.8% 87.6% 97.3% 88.1% 100.00% 2023
PERU 77.4% 95.9% 98.1% 98.8% 100.00% 2032
SINGAPORE 99.9% 100.0% 100.0% 100.0% 100.00% 2017
UNITED STATES 42.6% 88.5% 94.2% 88.6% 99.98% 2046
VIETNAM 53.7% 74.9% 83.9% 85.8% 100.00% 2037
Source: International Trade Centre (ITC), Market Analysis and Research section calculation
Table 1. Share of imports liberalized, by TPP market
CountryShare liberalized 2017 Share liberalized 2046 End of TPP
implementation
TPP will drive down average intra-TPP tariff from
0.91% (FTA) to 0.22% (FTA+) by 2046
17
Share of tariff line with tariffs (>5%)
18
Share of tariff line with tariffs (>15%)
Some members apply partner-specific tariff cutsU.S., Japan, Chile, Mexico
Example: U.S. tariff elimination in auto sector
Tariffs on some sensitive products to remain
20
Examples: Japan & Mexico
Japan (FTA+) Mexico (FTA+)
Part 3. Potential Trade impact of the TPP
21
Motivation
- Studies find TPP agreement to be beneficial for its members, but what about its
impact on non-signatories, particularly on developing nations and LDCs?
- Is it possible to capture all risks faced by third countries with aggregated analysis?
- Which sectors and specific products exposed to trade diversion in each affected
country?
Related results of a CGE model
MIRAGE model; assessing the impact of TPP on third countries (Decreux &
Fontagné 2017, forthcoming):
23
- Bangladesh to be impacted the most (1% decline in exports)
- Similar results with other studies such as Petri and Plummer (2016)
Exemple of the Applied tariffs by USA on top products
exported by Lesotho under AGOA (clothing to USA represent
300M$ out of national total export of 932 M$)
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4. Ongoing work : Expanding FTA coverage
to APEC + RCEP
30
Phase 2: Intra-APEC/RCEP37 Intra-TPP FTAs* + 1 TPP
Note: the figure shows only reciprocal trade agreements (not GSP)* including GSP
43 Intra-APEC/RCEP FTAs*
Phase 2: Intra-APEC/RCEP/EU37 Intra-TPP FTAs* + 1 TPP
Note: the figure shows only reciprocal trade agreements (not GSP)* including GSP
43 Intra-APEC/RCEP FTAs*
8 EU FTAs*
Phase 2: Intra-APEC/RCEP/EU + Extra-TPP37 Intra-TPP FTAs* + 1 TPP
Note: the figure shows only reciprocal trade agreements (not GSP)* including GSP
43 Intra-APEC/RCEP FTAs*
8 EU FTAs*
74 Extra-TPP FTAs*
Phase 3, Option 3: All remaining FTAs
37 Intra-TPP FTAs* + 1 TPP
Note: the figure shows only reciprocal trade agreements (not
GSP)* including GSP
43 Intra-APEC/RCEP FTAs*
8 EU FTAs*
74 Extra-TPP FTAs*
34 Extra-APEC/RCEP
FTAs*
31 Extra-EU FTAs*
174 rest of FTAs*
Remaining FTAs by regionCountry detail
Exp: Japanese carmakers benefit from TPP ROO
37
Japan-Mexico FTA TPP
65% 45%minimum regional content minimum regional content
ROOs affect FTA utilization rates: for every tariff
cut there is a specific ROO Liberal vs. stringent ROOs
FTA tool for exporters
Application 1
Example: Vietnamese shoemaker investigates Korean market
2 trade agreements between
Korea and Viet Nam
Same tariff preference
FTA tool for exportersApplication 1
Example: Vietnamese shoemaker targets Korean market
Same product-specific
ROODifferent cumulation
area
Outward
processing in
Kaesong
Industrial
Complex, NK
allowedCOO not needed
for <$600
COO not needed
for <$200
Longer validity for
bilateral FTA
Thank you
for your attention!Mr. Mondher Mimouni
International Trade Centre