TPP Focus Moves to Ratification, New Entrants

International Trade Daily™ provides rapid, reliable notification of the most significant developments affecting U.S. trade and international business policy, as well as the policies of major U.S....

By Murray Griffin

Feb. 4 — Trade ministers from 12 countries involved in Trans-Pacific Partnership negotiations Feb. 4 signed the final text of the agreement in Auckland, New Zealand, and held detailed discussions on ratification processes in their respective economies.

“What brings us together is a shared belief that opening and integrating our markets through trade and investment will enhance the prosperity of our peoples,” New Zealand Prime Minister John Key said at the signing ceremony.

“Combined, the countries represented here make up over a third of global GDP and a market of over 800 million people,” Key said. “So TPP is a big deal, literally.”

The 12 TPP member countries comprise the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore and Vietnam, as well as signing ceremony host New Zealand—a grouping that represents nearly 40 percent of world GDP.

U.S. Trade Representative Michael Froman described the agreement as historic.

Referring to its provisions on the controversial issue of investor-state dispute settlement, he said the text “goes further than any agreement before” to ensure governments can regulate in the public interest.

Many of the TPP member countries are developing economies and their ministers too were enthusiastic about the potential benefits.

They include Chile, which is in the unique position of having free trade agreements with the other 11 TPP members.

The TPP will deliver greater market access, do more to tackle non-tariff barriers, support growth in services and investment and assist small to medium enterprises, while also including provisions on labor and environment, Chile's Minister of Foreign Affairs Heraldo Munoz told journalists after the signing.

Its provisions on rules of origin are also “a very attractive element of this treaty,” he said.

Similarly, Vietnam's Minister of Industry and Trade, Vuy Huy Hoang, said he expected the TPP would help his country “with the implementation of our legal system” and with capacity building, and deliver more foreign direct investment.

Focus Shifts to Ratification

The signing ceremony took place after a round of bilateral discussions and a ministerial dinner on Feb. 3, followed by a Feb. 4 meeting of all 12 ministers, dovetailed with further bilaterals.

Speaking to Bloomberg BNA Feb. 4 at the conference venue ahead of the day's events, New Zealand's trade minister Todd McClay said domestic ratification processes had been a key issue discussed at the ministerial dinner and that the ministerial meeting preceding the signing would “take that further.”

Ratification processes vary, he noted.

“Some of them are similar, those with parliamentary democracies or that have links back to the Commonwealth, but some are quite different,” he said.

As well, several countries have to undertake preparatory work before they begin their ratification processes and others are entering election periods, he noted.

Nevertheless, “I'm very optimistic,” he said. “TPP allows two years for ratification. We believe that is more than ample.”

New Entrants

McClay added that the Feb. 4 ministerial meeting would also discuss procedures for dealing with other countries interested in joining the TPP, while emphasizing that locking in ratification by the original 12 should be the priority.

“First and foremost over the next two years' countries need to focus on ratification, I think that is the most important thing.”

However, ministers are likely to task officials to begin developing a framework for other countries to join, which would need to detail a process that is fair to both existing TPP countries and potential new entrants, he said.

The 12 existing economies would also need to discuss how to engage with potential new entrants through bilateral and collective processes, he said.

Although ratification will be the priority for the next few years, that doesn't mean economies keen to join must simply wait that process out, McClay added.

Bilateral Meetings

As at all TPP ministerial meetings, various countries have held bilateral discussions on aspects of the agreement and McClay said New Zealand planned to hold bilaterals with Vietnam, Australia, Singapore, the U.S., Chile, Mexico and Peru.

“In some cases we are exchanging letters that have come out of text negotiation”, he said.

These letters, “clarify various points and so on which came about as part of the negotiation, which is not unusual.”

Comprehensive Agreement

The TPP comprises 30 chapters dealing with issues such as trade in goods, rules of origin, customs and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, investment, cross-border trade in services, financial services, telecommunications, electronic commerce, government procurement, intellectual property, labor and the environment.

Other chapters deal with issues such as regulatory coherence, dispute settlement and administrative and institutional provisions.

The agreement is supported by a raft of country-specific annexes and appendices that specify each member economy's “nonconforming measures,” as well as special arrangements existing between some parties, such as Japan's appendices with the U.S. and Canada on motor vehicle trade.

To contact the reporter on this story: Murray Griffin in Auckland at

To contact the editor responsible for this story: Jerome Ashton at