TPP: who profits, who does not
20 Oct 2015
The Trans-Pacific Partnership(TPP) that was recently formed between the USA and eleven Pacific states - Canada, Chile, Mexico and Peru on one hand and New Zealand, Australia, Japan, Malaysia, Brunei, Singapore and Vietnam on the other - aims to remove trade barriers and to set common standards. Non-members like the EU are more than a bit alarmed by the world's largest trade agreememt as it has shifted the center of trade from the Atlantic to the Pacific. But even member states and their textile and garment industies do not necessarily profit from the TPP.
The US for example could harm itself as garments have to be produced in TPP countries to qualify for duty-free access. That means more production in Asia and South America, less in the United States. The country is already fearing job losses but will have to deal with further outsourcing in the future.
TPP countries form world's largest trade pact
Many are quite intimidated by the mere size of the partnership, whose members generate almost 40 percent of the global gross domestic product and one third of world trade. This could even increase further once more nations join - China and South Korea are already interested. China will not give up its pole position so soon but rather join.
Important textile and garment producing countries like Bangladesh, India, Pakistan, Indonesia and to a certain extend Thailand feel ignored and could lose out to much smaller players like Vietnam and Malaysia. Thailand and Indonesia have already joined the ranks of those countries aspiring to join.
Europa is still banking on bilateral trade agreements with countries like South Korea, Singapore, Canada and Vietnam but will have to engage in more extensive alliances to be able to keep pace. Economic disadvantages are to be expected. In addition, the EU will now be under pressure to finalise its own trade agreement with the US, the TIPP. The United States, however, will try to put many of the TPP decisions on the agenda.
Clear winners are Asian countries like Vietnam whose emerging textile and garment industry will get a boost by the new partnership and who will use easier access to new trade partners to their advantage.Image: Taz / flickr