New trade agreement drives US-Asia integration
A new regional trade group has come into existence which will stimulate trans-Pacific trade and benefit US exporters and importers. Following an agreement sealed on November 12, 2011 in Hawaii, the leaders of nine trading partners – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States – announced the creation of the Trans-Pacific Partnership (TPP). It has also been announced that Japan is to open negotiations for membership.
The TPP agreement involves a sub-set of Asia Pacific Economic Cooperation members, who have agreed to work towards closer integration of trade and the development of production and supply chains among TPP members. The free trade agreements will lower tariffs on many US exports, which will have a beneficial impact on West Coast port volumes in particular.
This deal mirrors a similar recent bilateral free trade agreement with South Korea, demonstrating the effort which the US government has put in to building relationships with its Asia Pacific neighbours. To some degree it also indicates the marginalisation of the World Trade Organisation talks which have stalled in recent years.
Importantly, the new agreement does not include China, the US‘ largest trading partner in the region. Considerable work would have to be undertaken if China is to reach the standards which all partners in the TPP are expected to attain. These include intellectual property, labor and environmental protection. China itself has not ruled out membership, were it to be asked.
However despite the fact that Japan and China are yet to join, the agreement is a big step forward for regional integration. There is a major opportunity for US manufacturers to benefit from becoming further immersed within the complex multi-country supply chain networks which now dominate in Asia. Given the strength of the Asia Pacific economy, this is a particularly tempting prospect.
Quelle: eyefortransport
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