Trans Pacific Agreement Notes For IAS Prelims,Mains

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Trans Pacific Agreement Notes For IAS Prelims,Mains

Trans Pacific Agreement Notes For IAS Prelims,Mains

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  • The Trans-Pacific Partnership also known as the Trans Pacific Partnership Agreement is a trade agreement among twelve of the Pacific Rim countries(excluding China).
  • The finalized proposal was signed on 4 February 2016 in Auckland, New Zealand, concluding seven years of negotiations.
  • It is currently awaiting ratification to enter into force.

The founding members of the Pacific Rim group are –

  • Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
  • The 12 nations account for some 40% of the world’s economy

Objective

  • To promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labour and environmental protections.

The agreement contains measures to lower both non-tariff and tariff barriers to trade, and establish an investor-state dispute settlement mechanism.

Why focus on TPP by USA?

  • The TPP is the main economic component of US President Barack Obama’s strategic shift toward the AsiaPacific.
  • The alliance of broadly like-minded nations is seen as a counterweight to China, as Beijing expands its sphere
    of economic and political influence and promotes its way of doing business – seen as often running counter
    to Western standards.
  • China’s establishment of the Asian Infrastructure Investment Bank (AIIB), which could challenge Western  controlled institutions such as the International Monetary Fund (IMF) that currently set trading rules, has
    added a sense of urgency.
  • The TPP also comes as global free trade talks move painstakingly slowly at the World Trade Organisation
    (WTO), which requires unanimous agreements and where negotiations often run afoul of conflicting
    interests between mature economies and emerging nations.