On October 5, 2015, the United States signed an agreement with 11 Pacific nations who, all together, represent 40% of the world economy. The purpose of the agreement is to establish a new economic block that will promote development and innovation in the Asia-Pacific region, and to deal with China´s influence.
The agreement, which will swing open the doors to a large part of the Pacific, was unanimously celebrated by the participating nations that form part of the new TPP (Trans-Pacific Partnership): Australia, Brunei, Canada, Chile, United States, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The variety of economic fundamentals in the 12 countries, which are vastly different, has been the key obstacle in the negotiations, which began five years ago. Agricultural quotas, access to markets for dairy products and the automotive sector, the creation of biomedicines, intellectual property laws and time limits on pharmaceutical patents are some of the areas that have been the most difficult to specify in the agreement.
The United States, promoters of the project, will benefit enormously from this economic association by eliminating nearly 18,000 taxes on U.S. products, and will be strengthened against China´s economic influence. ¨With more than 95% of our potential clients living outside of our borders, we cannot let China write the rules for the world economy,¨ commented President Barack Obama.
Some analysts claim that the TPP will mean a huge change in the rules of world commerce, which will impel the World Trade Organization to adopt them. It will also positively affect the EU if trade talks improve the free trade and investment agreements that it has with the United States from the Transatlantic Trade and Investment Partnership (TTIP).
The next steps to this agreement becoming a reality will be ratification by each of the member countries and the formal signing by the leaders of each one of the 12 countries.