This chapter will provide a brief background to the TPP including:
the negotiation and agreement of the TPP;
a summary of the TPP's chapters;
the inquiry by the Joint Standing Committee on Treaties (JSCOT);
other recent events.
Negotiation and agreement
The TPP is a regional trade agreement between the governments of
Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New
Zealand, Peru, Singapore, the United States and Vietnam.
Negotiations for the TPP were commenced in 2008 and concluded on 5 October 2015.
The TPP text was then subject to a process of legal review, translation and
verification. The legally-verified English-language version of the TPP text was
released on 26 January 2016. On 4 February 2016, the TPP was formally signed in
Auckland by representatives of participating countries, including the then
Minister for Trade and Investment, the Hon Andrew Robb AO.
The Ministers' statement released following the signing of the TPP included:
After more than five years of intensive negotiations, we have
come to an agreement that will support jobs, drive sustainable growth, foster
inclusive development, and promote innovation across the Asia-Pacific region.
Most importantly, the agreement achieves the goal we set forth of an ambitious,
comprehensive, high standard and balanced agreement that will benefit our
TPP brings higher standards to nearly 40 percent of the
global economy. In addition to liberalizing trade and investment between us,
the agreement addresses the challenges our stakeholders face in the 21st
century, while taking into account the diversity of our levels of development.
We expect this historic agreement to promote economic growth, support
higher-paying jobs; enhance innovation, productivity and competitiveness; raise
living standards; reduce poverty in our countries; and to promote transparency,
good governance, and strong labor and environmental protections.
Trans-Pacific Partnership Agreement
The text of the TPP comprises 30 Chapters, with associated Annexes and schedules,
and four separate Annexes (including Schedules of Commitments for all TPP parties).
The National Interest Analysis (NIA) contains an overview of the chapters of
the TPP. This has been extracted below.
The TPP is a broad and comprehensive agreement that will liberalise and facilitate
trade and investment between all TPP Parties. Upon entry into force, or over time,
each Party is required to eliminate or reduce specified tariffs and non-tariff barriers
or restrictive policies on imports of goods from the other Parties.
The elimination and reduction of tariffs on goods (Chapter 2) that meet
the agreed Rules of Origin criteria (Chapter 3) is in accordance with each
Party's Schedule of tariff commitments, and with Tariff Rate Quotas specified.
Article 2.4.3 (Elimination of Customs Duties) affords any one or more of the
Parties with the ability to request consultations with a view to accelerating
tariff elimination as set out in their respective Schedules. Under Chapters 10
and 11 of the TPP, Parties will also be required to eliminate barriers or
restrictive policies on foreign services and service suppliers.
Under the Investment (Chapter 9), Cross-Border Trade in Services
(Chapter 10) and Financial Services (Chapter 11) chapters, each Party is
required to grant market access and non-discriminatory treatment (known as
national treatment and most favoured nation (MFN) treatment) to investments and
services from the other Parties. In Australia's case, national and MFN
treatment will apply unless otherwise specified in the non-conforming measures
annexes to the TPP (Annexes I and II). In the Investment Chapter, each Party is
also required not to expropriate or nationalise a covered investment unless in
certain circumstances; and to treat a foreign investor or investment in
accordance with customary international law, including fair and equitable
treatment and full protection and security.
The TPP also contains the Parties' commitments and disciplines on:
- extiles and Apparel (Chapter 4);
- Customs Administration and Trade Facilitation (Chapter 5);
Trade Remedies (Chapter 6);
- Sanitary and Phytosanitary Measures (Chapter 7);
Technical Barriers to Trade (Chapter 8);
Temporary Entry of Business Persons (Chapter 12);
Telecommunications (Chapter 13);
Electronic Commerce (Chapter 14);
Government Procurement (Chapter 15);
Competition Policy (Chapter 16);
- Sate-Owned Enterprises and Designated Monopolies (Chapter 17);
Intellectual Property (Chapter 18);
Labour (Chapter 19);
Environment (Chapter 20);
- Cooperation and Capacity Building (Chapter 21);
Competitiveness and Business Facilitation (Chapter 22);
Development (Chapter 23);
Small and Medium-Sized Enterprises (Chapter 24);
Regulatory Coherence (Chapter 25);
Transparency and Anti-corruption (Chapter 26); and
- Administrative and Institutional Provisions (Chapter 27).
Chapter 28 (Dispute Settlement) of the TPP contains a binding
State-to-State dispute settlement mechanism modelled on previous FTAs and the
WTO system. Most substantive obligations under the TPP will be subject to this
mechanism, except those in the chapters on Competition Policy, Cooperation and
Capacity Building, Competitiveness and Business Facilitation, Development,
Small and Medium-Sized Enterprises, and Regulatory Coherence, and Annex 26-A
(Transparency and Procedural Fairness for Pharmaceutical Products and Medical
Devices) to the Transparency and Anti-Corruption Chapter. There is also an ISDS
Chapter 29 (Exceptions and General Provisions) is consistent with the approach
taken in other FTAs in setting out several WTO-style general and security exceptions
which apply to a number of chapters of the TPP. Such exceptions ensure FTA
obligations do not unreasonably restrict government action in key policy areas,
including action to protect essential security interests, the environment and
Chapter 30 (Final Provisions) provides for matters such as entry into
force, amendments, accession, withdrawal and the Depository of the TPP. In particular,
Article 30.5.1 (Entry into Force) provides that the TPP will enter into force
60 days after the date on which all original signatories have notified the
Depository in writing of the completion of their applicable legal procedures.
If not all original signatories have completed their applicable legal
procedures within a period of two years, the TPP will enter into force, if at
least six of the original signatories, which together account for at least 85
per cent of the combined gross domestic product (GDP) of the original
signatories in 2013, have notified the Depository in writing of the completion
of their applicable procedures within this period.
A number of side letters entered into with TPP participating countries
mean that entry into force of the TPP will alter a number of Australia's existing
treaties or treaty obligations. Seventeen of these side letters are of treaty
status and are legally binding between the parties. An example is the agreement
between Australia and the US suspending provisions in the Australia-United
States Free Trade Agreement (AUSFTA) providing tariff rate quotas for beef and
dairy and agricultural safeguards, and confirming that the applicable tariff
rate quotas are those set out in the TPP. A further ten are of less-than-treaty
status. These include a memorandum of understanding with Vietnam to provide
technical assistance regarding distance and blended education, and for a pilot
program under which Australian universities will deliver online education into
Joint Standing Committee on Treaties inquiry
The TPP was tabled in Parliament on 9 February 2016 and referred to the Joint
Standing Committee on Treaties (JSCOT). Following the federal election, the TPP
was re-referred to JSCOT at the beginning of the 45th Parliament.
JSCOT tabled its report on the TPP on 30 November 2016. The majority
report made six recommendations including that 'binding treaty action be taken'
in relation to the TPP. In particular, the committee noted its concern that
'Australia's long-term commitment to free trade, from which Australia benefits
immensely, is currently at risk from a resurgence of nationalism and
Additional comments from Opposition members of JSCOT highlighted a number of
'process and substance concerns' regarding ratifying the TPP. These included:
the need for independent economic analysis of treaties;
the weakening of labour market testing and skills assessments;
the inclusion of ISDS provisions.
A dissenting report by the Australian Greens also outlined several
concerns with the TPP and recommended 'no measures are taken towards Australia's
acceptance or ratification of the TPP'.
On 8 November 2016, Mr Donald Trump was elected as the 45th
President of the United States. Prior to his election, President Trump had indicated
his administration would withdraw the United States from the TPP as part of
several 'actions to protect American workers'.
On 23 January 2017, President Trump signed an executive order
withdrawing the United States from the TPP.
Due to the structure of the entry into force provisions in the TPP, it
is unlikely the TPP will enter into force without ratification by the United
States. However, the Australian Government has continued to express hope that
the TPP will enter into force. On 22 November 2016, the Trade Minister, the Hon
Steven Ciobo MP, indicated that the Australian Government would 'press ahead
with our domestic processes' for ratification of the TPP'. Minister Ciobo
The agreement as it currently stands allows 24 months for
countries to ratify. We need the United States to ratify in order for the
agreement to come into effect....[W]e need to give the US time. And ultimately as
well, obviously the other member countries that agreed to the TPP will continue
discussions, will continue discussions around what shape it should take going
forward. And we have the option, as I said, of looking to drive the TPP forward
without the United States, if that's what came to pass.
On 14 January 2017, the Prime Minister, the Hon Malcolm Turnbull MP, indicated
that Australia and Japan would coordinate toward the early entry into force of
the TPP and the prompt conclusion of the RCEP [Regional Comprehensive Economic
On 22 January 2017, Minister Ciobo issued a media release on the TPP which
noted that while President Trump's decision not to ratify the TPP at this time was
disappointing it was 'not unexpected'. The Minister stated that ratification
was the strongest message Australia could send on the importance of the TPP.
However, he also outlined that other options were being pursued:
This week at the World Economic Forum I met with Japan,
Canada, Mexico, Singapore, New Zealand and Malaysia to discuss alternatives.
The shape this takes will be the subject of discussion over coming months. A
number of options are available to us and there is a strong desire to ensure
the benefits of the TPP are not lost.
On 26 January 2017, Prime Minister Turnbull indicated the Australian
Government's decision on the legislation to ratify the TPP will depend on
discussions with other TPP members and the position of the Senate.
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