This historic TPP, the biggest global trade deal in two decades, will deliver enormous benefits to Australian businesses, farmers, manufacturers and service providers. The first round of TPP negotiations was held at Melbourne in March 2010 and the deal has been concluded at Atlanta in October 2015. The TPP partners include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam.
The TPP countries represent around 40% of global GDP. In 2014, around 33.3% of Australia’s total goods and services exports went to TPP countries. These countries represent 45% all outward Australian investments which were $1.1 trillion in 2014.
The TPP will slash barriers to Australian exports and eliminate 98% of all tariffs across everything from beef, dairy, wine, sugar, rice, horticulture and seafood through to manufactured goods, resources and energy. It provides good outcomes for Australian services including education, professional services, transport, financial services as well as access to government procurement markets in the region. The specific outcomes in various sectors are highlighted in what follows.
There will be major new commercial opportunities for mining equipment and oilfield services to Malaysia, Brunei Darussalam, Mexico and Vietnam. Financial services to all TPP countries. Professional services to Malaysia. Education services to Brunei Darussalam, Japan, Malaysia, Mexico, Peru and Vietnam. Health, transport, aviation and telecommunication services to Malaysia and Vietnam. Hospitality and tourism services to Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru and Vietnam. New opportunities for government procurement markets in Brunei Darussalam, Canada, Malaysia, Mexico, Peru and Vietnam.
Improving beef exports to the US, Canada Japan and Vietnam. Increased level of sugar exports to the US, Canada, Japan, Peru and Malaysia. Rice to Japan and Mexico. Dairy products to the US, Canada, Japan and Mexico. Cereals to Canada, Japan and Mexico. Wine exports to Canada, Malaysia, Mexico, Peru and Vietnam. Seafood exports to Canada, Japan, Mexico and Peru.
Manufacturing goods including iron & steel products, pharmaceuticals, machineries, mechanical & electrical appliances, automotive parts as well as paper & paperboards exported to Brunei Darussalam, Canada, Malaysia, Mexico, Peru and Vietnam. Exports of resources and energy products will be increased to Peru and Vietnam.
The TPP framework will create investment opportunities for Australia. Australian investments into Canada below CA$1.5 billion will not be screened by Canadian authorities. Japan, Vietnam and Brunei Darussalam will only impose conditions on foreign investment on initial sale of interests or assets owned by the government. Foreign Investment Review Board (FIRB) will increase investment screening threshold from $252 million to $1,094 million, except investments in agricultural land and agribusinesses, for all TPP countries.
A number of concerns have been raised on TPP and its clauses. These relate to copyright laws, food safety & labelling, medicines prices and Investor State Dispute Settlement (ISDS) which may allow foreign companies to sue Australia for loss of future profits due to government policies.
Australia will now undertake treaty-making process. The Joint Standing Committee on Treaties will review the TPP and then table it to the Parliament for enactment.