TPP Trade Deal: Who Stands to Gain, Suffer in Asia-Pacific; China Biggest
Loser
The Trans-Pacific Partnership
is the biggest trade agreement in history, reducing tariffs and other
forms of protectionism in a dozen countries making up about 40 percent of the global economy with economic output of
almost $30 trillion.
The deal sealed Monday in
Atlanta came after more than five years of negotiations between the TPP
nations - the U.S., Canada, Japan, Australia, Brunei, Chile, Malaysia, Mexico,
New Zealand, Peru, Singapore and Vietnam.
China Biggest Loser
• The
world’s second-biggest economy may be among the biggest losers as it failed to
join the TPP, allowing the U.S. to tighten trade ties across the region and
advance the Obama administration’s so-called pivot to Asia. After initially dismissing
TPP, Chinese officials have now indicated some interest in possibly joining in
the future.
• “China
has an open attitude towards system building that complies with WTO rules.
• Chinese
exporters may lose some market share in the U.S. and Japan to developing
countries such as Vietnam.
• China
will push its “one belt, one road” strategy of resurrecting trade routes from
Asia to Europe and its new development bank and try to reach more free-trade
deals with other countries, especially in Asia.
Japan
• Japanese
car and auto-parts makers may be the biggest winners, as they get cheaper
access to the U.S., the industry’s biggest export market.
• Japan
was forced to reduce some of the protections granted to its rice farmers,
creating a non-tariff import quota of one percent of
its total consumption.
• Livestock
farmers may be harder hit as tariffs on beef will be cut to 9 percent over 16 years from 38.5 percent,
while pork tariffs will also be slashed.
Australia
• The
deal will remove about A$9 billion of import taxes
from Australian trade, Prime Minister Malcolm Turnbull said.
• Australia
will gain access to the U.S. sugar market while Japan will also reduce levies
on the product and the cut in the beef tariff will help Australian ranchers.
• Seafood
and most horticulture products will see tariffs dropped, while preferential
quota access will be created for grains, cereals and rice.
• Australia
and New Zealand successfully pressured the U.S. to compromise on the amount of
time pharmaceutical companies would get protection for new biotech drugs,
granting companies a minimum of five years rather than the 12 years of
protection pushed by the U.S. That could lead to cheaper drug prices and more
competition.
• Reduced
tariffs on everything from iron and steel products, to pharmaceuticals,
machinery, paper and auto parts will help Australian manufacturers.
New Zealand
• Tariffs
due to be eliminated on 93 percent of New Zealand’s
trade with its TPP partners representing annual savings of about NZ$259 million
($168 million), Trade Minister Tim Groser said.
• The
dairy industry, which accounts for about a quarter of exports, will see savings
of about NZ$102 million a year. Some tariffs to remain in key
markets such as the U.S., Japan, Canada and Mexico. Though New Zealand
will get preferential access to new quotas, Canada only agreed to set foreign
quotas for 3.3 percent of it dairy market over five
years
• Tariffs
on beef exports will be eliminated with the exception of Japan where they will
drop to 9 percent from 38.5 percent,
he said. Tariffs on all other exports including fruit, seafood, wine and sheep
meat will be eliminated
• “While
I am very disappointed that the deal falls far short of TPP’s original ambition
to eliminate all tariffs, there will be some useful gains for New Zealand dairy
exporters in key TPP markets such as the U.S., Canada and Japan,” John
Wilson, chairman of Fonterra Cooperative Group Ltd., the world’s biggest dairy
exporter, said in a statement.
Vietnam
• Vietnam
to be among the biggest winners, according to the Eurasia Group, with the
agreement potentially boosting GDP by 11 percent by
2025, with exports growing 28 percent in the period
as companies move factories to the low-wage country, the report said.
• Reduced
import duties in the U.S. and Japan will benefit country’s apparel
manufacturers, whose low labor costs have enabled
them to grab business from China. Still, impact may be limited as Vietnam will
still face strict rules-of-origin on materials.
• Fishing
industry to benefit from elimination of import tax on shrimp, squid and tuna,
now averaging 6.4%-7.2%.
• Eliminating
import taxes on pharmaceutical products from the current average of about 2.5%
will lead to tougher competition between Vietnamese domestic companies and
foreign companies. TPP will also increase patent protection, restricting
Vietnam companies access to new products as well their
ability to produce new drugs.
Malaysia
• Malaysia’s
state-owned enterprises may suffer from the deal which calls for equal access
to government procurement.
• Electronics,
chemical products, palm oil and rubber exporters are among beneficiaries. Malaysia
is the world’s second-biggest palm oil producer and one of the biggest growers
of rubber