Trans-Pacific Partnership (TPP)February 15, 2016, Posted by polocustom
The Trans-Pacific Partnership is a U.S. lead initiative made up of twelve countries that seek to eliminate or reduce tariffs between these twelve countries for both imported and exported goods. The TPP agreement was signed by the twelve partner countries on February 4, 2016 and it has entered the ratification process which could take up to two years. Beginning on March 14, 2016, the President can submit the Implementing Bill for consideration to Congress.
Over 18,000 tax cuts on U.S. goods exports
The TPP seeks to bolster revenue for U.S. made goods manufacturers by reducing or altogether eliminating tariffs in partner countries. The TTP attempts to level the playing field for U.S. manufacturers to feasibly sell products to partner countries at a significantly reduced cost. Related directly to Polo and our customers, a provision for Travel Goods exists within this agreement. Travel Goods are defined as luggage, briefcases, backpacks, hand bags, tote bags sport bags, wallets and other similar carrying products.
The TPP is meant to be a “living agreement” that evolves over time as new issues arise among the partner countries. The initial draft of the agreement includes provisions for several topics that are perceived to be global issues. The U.S. outlines these overarching topics as Leadership, Jobs & Growth and Values. Below is a brief description of these major topics:
- Duty Reductions – elimination of tariffs immediately or over time
- Rules of Origin – single, uniform set of rules of origin
- Labor – worker safety and freedom of association
- Intellectual Property – protection of trademarks, brand names, patents and testing data
- State-Owned Enterprises – non-discrimination against non-SOE businesses
- Currency Manipulation – commitments to exchange rate policies, increase in monetary policy transparency and non-devaluation of currencies to make exports less expensive
Major obstacles remain for the U.S. before this agreement is ratified by Congress. The implementation of this agreement must meet the approval of the House Ways and Means Committee and the Senate Finance Committee and there are major U.S. industries and presidential candidates that are opposed to the agreement. If ratification by all twelve partner countries has not taken place by February 4, 2018, the TPP can enter into force if at least six partner countries holding more than 85% of GDP agree upon ratification. If this scenario does occur, the U.S. and Japan must be part of the six countries in agreement.