On Jul 31st, 2015 the Trans-Pacific Partnership (TPP) negotiation ended without a resolution although a great progress has been made. The sad thing is that “they finished the part of the agreement that would raise environmental standards in Vietnam, Malaysia and the other countries in the bloc” according to The Wall Street Journal. It is expected the deal will continue to be worked on in the upcoming future meeting.
US, Japan, Vietnam and 9 other countries hoped to complete the signing of TPP in 2015. If successful, TPP is expected to be a major event occurred to Vietnam in 20 years (from the time Vietnam and the United States decided to normalize relations in 1995).
1. TPP is a free trade agreement between 12 countries with the aim of promoting economic integration in Asia – Pacific area. Twelve members of TPP include Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam, the USA and Japan. South Korea, Colombia, Costa Rica, Indonesia, Taiwan, Thailand and many other countries are planning to participate in TPP. Originally, TPP started from an agreement among Singapore, Chile, New Zealand and Brunei in 2009, before the United States decided to join and lead.
2. The main objectives of TPP are the elimination of taxes and barriers for goods and trading services between member countries.
3. In addition, TPP will also unify laws, common rules between countries, such as intellectual property, food quality or work safety.
4. The current members of TPP accounted for 40% of the world GDP and 26% of global merchandise trade.
5. The United States expects the TPP will be the key point of their new destination in Asia. China has sometimes expressed their intention to join the TPP, but many of TPP’s current provision seem to be designed not to let China have the opportunity to participate in this agreement.
6. TPP is expected to set out the international rules that transcend the scope of the WTO, such as investment policies, protect intellectual property rights, control of state companies, and the quality of product and labor.
7. TPP is expected to create international laws capable of adjusting the policies and directions of the law in each member countries. In other words, the laws of the member countries will have to follow the orientation of the TPP. Many laws in TPP also influence the changes of the legal regime of the country. For example is the legislation to encourage the members of the TPP to open a government agency, with mechanism and the way to work like in the US to perform strengths-weaknesses analysis before issuing new domestic laws.
8. TPP includes 29 chapters, in which there are only 5 chapters are directly related to the issue of exchange of goods and services, the remaining chapters addressed many issues related to different benchmarks, standards about environment, labor quality, financial rules, food and medicine. TPP will remove many benefits of state companies which is currently playing a big role in i.e. Vietnam economy, to create competitive opportunities for private companies.
9. With TPP, foreign and international companies, corporations will be able to bring the government of the member country to TPP’s special court when these countries pose the rules that go against the norms of the TPP. This special court has full authority to make the government to compensate for damage not only occurred, but also the loss of opportunities in the future of international corporations, companies.
10. The TPP members have to sign non-disclosure agreement in the detailed negotiation process about the rules of TPP. These countries may only disclose information to government agencies, organizations, and individuals that are directly related to trade policy advisory.
This publication is designed to provide updated information of legal matters, and does not constitute professional advice.