Abstract
Overall, market access for goods is not quite as open as markets for services and investment in the provisions of the Trans-Pacific Partnership (TPP). While most of the improvements for goods take effect immediately on the date of entry into force of the agreement, some sensitive goods have longer implementation schedules. While the overall agreement provides substantial benefits in goods, certain products require a more mixed assessment. By using product specific rules of origin (ROOs), TPP members have recognized merit in being meticulous about different rules for different goods in different sectors. Quality in market access across the agreement is mixed, with some sectors receiving duty-free treatment in short order and others subject to complicated requirements. Agriculture remains challenging, with tariff rate quotas (TRQs) in place for some members and certain products, and tariffs that remain high initially for other markets and products, and a tariff elimination schedule extending over longer than six years. While there are deviations like these from the “gold standard”, most of the goods provisions in the agreement come into effect immediately. The overall balance struck in the goods provisions is sufficiently in favour of a positive assessment, yet there is some tarnish on the gold.
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Notes
- 1.
Of course, the European Union and associated market, regulatory and legal provisions go far beyond what the TPP will provide. If the Trans-Atlantic Trade and Investment Treaty (TTIP) between the United States and the EU ever gets concluded and implemented, it could leapfrog the TPP as well.
- 2.
Because each TPP member used slightly different approaches to scheduling tariffs, it is always important to examine the general notes that accompany each specific country commitments as well, ie, Australia has general notes that are meant to explain Australia’s specific schedule. The TPP texts and schedules as a whole will not change in the future, however, once the date of entry into force for the agreement is known, the schedules shown in Annex 2D will be changed so that, for example, “Year 2” will read January 1, 2019, or whatever specific date reflects the year 2 commitment timelines once entry into force (EIF) is known.
- 3.
There could be myriad examples, but one will suffice. The TPP texts note (Article 5.3) that parties shall issue advance rulings to let firms know tariff classification and whether or not products meet the rules of origin criteria (among other things) within 150 days. But the TPP text does not specify how this will take place—who is supposed to issue the ruling? Using what procedures?
- 4.
The specific PSR for swimwear (621111) reads: “A change to a good of heading 62.10 through 62.11 from any other chapter, except from heading 51.06 through 51.13, 52.04 through 52.12 or 54.01 through 54.02, subheading 5403.33 through 5403.39 or 5403.42 through 5403.49, or heading 54.04 through 54.08, 55.08 through 55.16, 58.01 through 58.02 or 60.01 through 60.06, provided the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the Parties.”
- 5.
There are also other ways for to ensure that foreign products will struggle to compete, such as requiring that fresh milk be sold to consumers within 7 days of milking the cow. This is a classic maneuver that has been used by TPP members in the past and that is not covered in the agreement.
- 6.
The specific details of Japan’s butter TRQ are detailed in Japan’s TRQ annex, under TRQ: JP9 Butter.
- 7.
The difficulties of getting domestic level ratification procedures in TPP member countries highlights this problem nicely.
- 8.
This statement may need to be viewed with some degree of caution. Because Mexico has existing FTAs with nearly all TPP members, few likely pay 200+% tariffs on pork products as most already receive preferential tariff rates in existing FTAs. However, the primary point is that all TPP members can be guaranteed the same rates under the TPP agreement and all are assured that the rates will be locked at 0 within five years. (It is possible that the existing FTAs do not drop to 0 or do not drop to 0 in the same time frame).
- 9.
New Zealand is the official repository country. The original TPP texts are posted in English, French and Spanish at: http://www.tpp.mfat.govt.nz/tpp-text.php.
- 10.
Although, it should be noted, like many things in the TPP, the agreement and texts should be carefully checked. The texts also have prohibitions scheduled by Malaysia and especially by Vietnam on the entry of many categories of used items. It is at least possible that some customs officials might view repaired items as used items and prohibit entry in the future. Implementation of the TPP rules will require careful monitoring.
- 11.
Perhaps more importantly, the TPP also allows the temporary entry of people (like entertainers or performers or trade show staff) to deliver these services.
- 12.
There is, of course, a lively debate over whether any FTA can address subsidies, particularly agricultural subsidies, or whether these can only be handled through global institutions. Given the difficulties that the WTO has had in moving its agenda forward, it is likely that such issues may need to be taken up in megaregional agreements or they may never be addressed at all.
- 13.
TPP was negotiated at the level of domestic headings. The WTO negotiates and binds tariffs at the 6 digit level (like the World Customs Organization). By contrast, the TPP and many other FTAs are handled 8, 10 or even 12 digits resulting in a much more finely detailed set of product specifications. Note however that tariff bindings at the 6 digit level also cover more items.
- 14.
Hopefully without triggering the safeguard mechanisms at the same time that will shut off the market.
- 15.
Footwear into the US market also faces similar challenges. There is no yarn-forward equivalent rule, but tariffs are very high and complicated. The TPP does start to unravel many of the protections for this sector.
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Elms, D.K. (2017). Market Access for Goods in the TPP: The Good, the Bad, and the Ugly. In: Chaisse, J., Gao, H., Lo, Cf. (eds) Paradigm Shift in International Economic Law Rule-Making. ODS 2017. Economics, Law, and Institutions in Asia Pacific. Springer, Singapore. https://doi.org/10.1007/978-981-10-6731-0_9
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