Trade News: These 5 Facts Explain the Obstacles to the Trans-Pacific Partnership


 
Issue 64| Aug. 21, 2015
These 5 facts explain the obstacles to the Trans-Pacific Partnership
 
The latest round of Trans-Pacific Partnership (TPP) negotiations ended in Maui last week without an agreement.  Four key industries - pharmaceutical, dairy, motor vehicles and textiles - along with currency manipulations, are five important factors that policymakers are challenged with in the most significant trade deal of the 21st century.  The massive 12-nation trade deal will link 40 percent of the world's economy and the potential payoffs are expected to be huge for the countries at the table, but the geopolitics of such a complicated treaty are tricky.  Read more .
 
Japan unlikely to wrap up TPP deal by year-end
 
With the procedures likely dragging on into next year's planned ordinary session, or even later, some members of the ruling Liberal Democratic Party (LDP) have voiced concerns over the potential negative impact the TPP issue could have on next summer's Upper House election. The government and the LDP had pinned their hopes on a broad TPP deal at last month's ministerial meeting as "the last chance" for Japan to complete its ratification procedures during the anticipated extra Diet session.   Read more.
 
Talks on U.S.-led Pacific trade deal stall
 
The United States and European Union are negotiating a separate trade deal, the Transatlantic Trade and Investment Partnership, which would create the world's largest free trade zone.   Trade ministers from a dozen Pacific Rim nations have failed to reach a deal on a new trade agreement that would cover almost 40 percent of the global economy. China, notably, is not included. A researcher who monitors Asian economic, trade, and political issues believes that if officials cannot get a deal done now, they will reassess their position and reconvene in the future until more progress is made.   Read more .
 
 
Vietnam's balancing act between the superpowers
 
Vietnam is one of four Asean countries negotiating to join the TPP, the U.S.-led trade agreement. This is expected to attract more investment to Vietnam not only from the U.S. but also other countries, including China that wish to tap into the preferential trade terms.  Probably the most significant development to come out of the recent Chinese visit to Vietnam was an agreement for the two countries to work together on development of the sea. This is an important step forward, given recent tensions between the neighbors over maritime territory.  Read more .
 
U.S. exporters show mild concern about renminbi volatility
 
U.S. exporters are preparing for the challenges to come due to the devaluation of the Yuan.  Mainland China's renminbi fell for the third day last Thursday with the People's Bank of China lowering the daily guidance rate by another 1.1 percent.  Jeffery Williamson, statewide director of California Centers for International Trade Development, believes the slowdown in the Chinese economy combined with the renminbi devaluation will put competitive pressures on the commodities and consumer goods sectors.   Read more
 
U.S. urges African countries to maximize AGOA opportunities
 
The U.S. government has granted a 10-year extension of the African Growth and Opportunities Act (AGOA), and the United States Assistant Trade Representative for Africa, Florizelle Liser, emphasized that African entrepreneurs should take advantage of the AGOA and increase their input in the U.S. market.   U.S. officials expressed optimism that the forthcoming AGOA forum in Gabon would reposition the Act and deepen U.S. economic relations with Africans in the future.   Read more.
 

The Four Global Forces Breaking All the Trends, Aug. 26
 

Hear from the Director of McKinsey's Global Institute, Jonathan Woetzel, as he discusses the four fundamental disruptive forces that are at the heart of epic global economic changes, the major emerging trends that are evolving as a result of them and how leaders across all sectors can reset their intuition and prepare for the challenges of the future. Register now or contact Jasmin Sakai-Gonzalez.

Compiled by Global Initiatives Interns Jordan Ulves and David Word.

For more information, contact Jasmin Sakai-Gonzalez, 213.580.7569.