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Tweet[IWS] CRS: TRANS-PACIFIC PARTNERSHIP (TPP) COUNTRIES: COMPARATIVE TRADE AND ECONOMIC ANALYSIS [29 January 2013]
IWS Documented News Service
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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)
Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis
Brock R. Williams, Analyst in International Trade and Finance
January 29, 2013
http://www.fas.org/sgp/crs/row/R42344.pdf
[full-text, 41 pages]
Summary
The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) currently
under negotiation between Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand,
Peru, Singapore, the United States, and Vietnam. The negotiating partners have expressed an
interest in allowing this proposed “living agreement” to cover new trade topics and to include
new members that are willing to adopt the proposed agreement’s high standards. Canada and
Mexico are the most recent countries to join the negotiations and Japan has participated in
consultations with the partner countries about the possibility of joining.
The TPP negotiations are of significant interest to Congress. Congressional involvement includes
consultations with U.S. negotiators on and oversight of the details of the negotiations, and
eventual consideration of legislation to implement the final trade agreement. In assessing the TPP
negotiations, Members may be interested in understanding the potential economic impact and
significance of TPP and the economic characteristics of the other TPP countries as they evaluate
the potential impact of the proposed TPP on the U.S. economy and the commercial opportunities
for expansion into TPP markets.
This report provides a comparative economic analysis of the TPP countries and their economic
relations with the United States. It suggests that the TPP negotiating partners encompass great
diversity in population, economic development, and trade and investment patterns with the United
States. This economic diversity and inclusion of fast-growing emerging markets presents both
opportunities and challenges for the United States in achieving a comprehensive and high
standard regional FTA among TPP countries.
The proposed TPP and its potential expansion are important due to the economic significance of
the Asia-Pacific region for both the United States and the world. The region is home to 40% of
the world’s population, produces over 50% of global GDP, and includes some of the fastestgrowing
economies in the world. With the addition of Canada and Mexico, TPP negotiating
partners made up 31% of U.S. goods and services trade in 2011, and the Asia-Pacific economies
as a whole made up over 56%. The TPP would be the largest U.S. FTA to date by trade value.
The United States is the largest TPP market in terms of both GDP and population. In 2011, non-
U.S. TPP partners collectively had a GDP of $5.7 trillion, 37% of the U.S. level, and a population
of 346 million, slightly larger than the U.S. population. Japan’s entry would increase the
economic significance of the agreement on both of these metrics.
Unlike most previous U.S. FTA negotiations, the TPP involves countries with which the United
States already has an FTA. The U.S. has FTAs in place with Australia, Canada, Chile, Mexico,
Peru, and Singapore, which together account for nearly 85% of U.S. goods trade with TPP
countries. Malaysia and Vietnam are the largest U.S. trade partners among TPP members without
an existing U.S. FTA.
Other TPP partners also have extensive existing FTA networks. The Association of Southeast
Asian Nations (ASEAN), of which Brunei, Malaysia, Singapore, and Vietnam are members, and
its collective FTAs with other countries, accounts for the bulk of this interconnectedness.
Moreover, ASEAN agreements with larger regional economies (e.g., China, Japan, and Korea)
present a second possible avenue for Asia-Pacific economic integration; albeit one that currently
excludes the United States.
Contents
Introduction ...................................................................................................................................... 1
Economic Overview ........................................................................................................................ 2
Asia-Pacific Region ................................................................................................................... 2
TPP Countries ............................................................................................................................ 4
Potential New TPP Participants ................................................................................................. 7
Japan .................................................................................................................................... 7
Existing Trade and Economic Agreements ...................................................................................... 8
Asia-Pacific Economic Cooperation (APEC) ............................................................................ 9
Association of Southeast Asian Nations (ASEAN) ................................................................... 9
Free Trade Agreements ............................................................................................................ 10
U.S. FTAs and TPP ........................................................................................................... 11
Bilateral Investment Treaties ................................................................................................... 12
Trade, Investment, and Tariff Patterns ........................................................................................... 12
U.S.-TPP Trade ........................................................................................................................ 12
Merchandise Trade ............................................................................................................ 12
Services Trade ................................................................................................................... 17
Intra-TPP Trade ....................................................................................................................... 20
World-TPP Trade ..................................................................................................................... 22
Investment Patterns ................................................................................................................. 24
Tariff Patterns .......................................................................................................................... 25
Conclusion ..................................................................................................................................... 28
Figures
Figure 1. Trans-Pacific Partnership Countries ................................................................................. 5
Figure 2. U.S. and TPP Average GDP Growth Rates ....................................................................... 6
Figure 3. U.S. Goods and Services Trade Balance with TPP Countries .......................................... 6
Figure 4. U.S. Goods and Services Trade, Shares of Total .............................................................. 8
Figure 5. Existing Trade Agreements among TPP Members ......................................................... 10
Figure 6. Top U.S. FTAs by Goods Trade ..................................................................................... 11
Figure 7. Top U.S. FTAs by Services Trade .................................................................................. 11
Figure 8. U.S. Merchandise Trade with Canada, Mexico, and other TPP Countries ..................... 13
Figure 9. Bilateral U.S. Merchandise Exports to TPP Countries excluding Canada and Mexico ........................................................... 14
Figure 10. Bilateral U.S. Merchandise Imports from TPP Countries excluding Canada and Mexico .................................................. 14
Figure 11. Total U.S.-TPP Services Trade ..................................................................................... 17
Figure 12. U.S.-TPP Services Trade, by Category ......................................................................... 18
Figure 13. U.S. Services Supplied to TPP Countries through MOFAs .......................................... 19
Figure 14. TPP Country Services Supplied to the United States through MOUSAs ..................... 19
Figure 15. Intra-TPP Merchandise Trading Relationships ............................................................. 21
Figure 16. Merchandise Imports into Australia ............................................................................. 22
Figure 17. Source of Merchandise Imports into non-U.S. TPP Countries ..................................... 23
Figure 18. Destination of Merchandise Exports from non-U.S. TPP Countries ............................ 23
Figure 19. Destination of U.S. FDI outflows to TPP Countries .................................................... 24
Figure 20. Sources of U.S. FDI inflows from TPP Countries ........................................................ 24
Figure 21. Average Applied Tariffs and GDP/Capita ..................................................................... 26
Figure 22. Trade-to-GDP Ratios .................................................................................................... 27
Tables
Table 1. APEC Members and Economic Statistics, 2011 ................................................................ 3
Table 2. U.S. Merchandise Exports to, Imports from, and Balance with TPP Countries .............. 15
Table 3. Top U.S.-TPP Trade Categories ....................................................................................... 16
Table 4. U.S. Service Exports to, Imports from, and Balance with TPP Countries ....................... 18
Table 5. Bilateral Investment Treaties and Flows for TPP Countries ............................................ 25
Table 6. Highest Tariffs by Product Category ................................................................................ 27
Table A-1. Trade Agreements in TPP Countries ............................................................................ 29
Table A-2. Intra-TPP Merchandise Trade ...................................................................................... 33
Appendixes
Appendix. ....................................................................................................................................... 29
Contacts
Author Contact Information........................................................................................................... 37
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