Patrick Marory, Director of International Trade Law Center, ILI

On December 8, 2015, the ILI held a one-day conference on the Trans-Pacific Partnership.  About one hundred people attended the conference, and the speakers included the Chief Majority and Minority Counsel to the Senate Finance and House Ways and Means Committee, the senior TPP negotiator at the Office of the U.S. Trade Representative, the Assistant U.S. Trade Representative for Congressional Affairs, two leading trade economists, representatives of key industries such as textiles and apparel, agriculture, information technology, and biologics, a representative of the AFL-CIO, and two leading trade lawyers who were closely involved in the negotiations.   The names of the speakers are listed below.  

The importance of TPP was highlighted by the fact that Asia's middle class is the fastest growing market in the world, and that by 2030 two-thirds of the world's middle class will be in Asia.  Also, 44 percent of U.S. goods exports and 29 percent of U.S. service exports go to TPP countries.   The Peterson Institute for International Economics has estimated that by the year 2025 TPP will produce real U.S. income benefits of $77 billion a year, and that U.S. exports will increase by $123.5 billion a year.   The benefits will be worth $2000 a year per U.S. household.   Ninety-eight percent of tariffs on U.S. industrial and consumer exports to TPP countries will be eliminated immediately.

The general view was that from the U.S. point of view the TPP was a good agreement that will open up significant markets for U.S. industries.   It was not as strong as it might have been, but this was at least in part due to the United States not being willing to make more concessions.  In the words of one speaker (Claude Barfield, of AEI), the agreement deserved a silver but not a gold medal. 

Highlights from the Conference included:

• Agriculture:  the agreement will open up significant export opportunities in poultry, through tariff reductions by Japan and Vietnam; beef, pork, and soybeans through tariff reductions by Japan; and dairy through tariff reductions by Japan and greater market access to Canada.
  
• Autos:  Elimination of tariffs on U.S. autos and trucks, and a bilateral agreement with Japan designed to deal with Japanese non-tariff measures.
  
• Biologics: The TPP provides for a minimum of 8 years of data protection or a comparable outcome through 5 years of data protection and other measures.   This was disappointing to the U.S. pharmaceutical industry, which had pressed for the current U.S. standard of twelve years.  Senator Hatch, Chairman of the Senate Finance Committee, has expressed serious concern about this issue.
  
• State-Owned Enterprises:  The agreement includes the first-ever comprehensive and enforceable rules on SOEs.
  
• Investor-State Dispute Settlement:  In response to concerns expressed by NGOs, the agreement contains provisions designed to prevent frivolous complaints that might limit policy space for governments in areas such as health and the environment.  The question was raised whether the carve-out of the tobacco industry from ISDS might be extended to other industries, such as sugar, in future agreements.
  
• China:  The view was expressed that China would not be able to join TPP, at least in the short term, because it could not comply with the "gold standard" provisions, such as those on SOE, and that in any event Congress would block it.
   

The key question at this point is of course whether the U.S. Congress will approve the agreement.  Most of the speakers were reasonably optimistic, though recognizing that some issues -- such as the term of protection for biologics - may have to be renegotiated, as happened with the Korea, Peru and Colombian FTAs, and that the implementing legislation is likely to contain some "sweeteners" designed to persuade particular senators and congressmen to vote in favor of the agreement.  It was pointed out that if TPP does not go through, there is no chance of approval for the Transatlantic Trade and Investment Partnership (U.S. and EU).