Trans-Pacific Partnership
Agreement (TPP)
The Trans-Pacific Partnership (TPP) aims to create a regional free trade agreement
involving 12 Asia-Pacific countries: Australia, Brunei Darussalam, Chile, Japan, Malaysia,
Peru, Singapore, the United States, Vietnam, Mexico, Canada and New Zealand. The
agreement would deepen economic ties between its diverse members by opening up trade in
goods and services, boosting investment flows, and promoting closer links across a range of
economic policy and regulatory issues.
TPP countries and total goods traded with the United States in 2014
TPP countries
represent 40%
of global GDP
Source: The New York Times
TPP Objectives
Comprehensive
Market Access
Eliminating tariffs and other barriers to goods and services trade as well
as investment.
Fully Regional
Agreement
Facilitating the development of production and supply chains among
TPP members.
Cross-Cutting
Trade Issues
Issues include regulatory coherence, competitiveness and business
facilitation, small-and-medium sized enterprises (SME’s), and
development of comprehensive and robust market liberalization.
Promoting trade and investment in innovation products and services.
New Trade
Challenges
Living Agreement
To enable updating the agreement to address trade issues that emerge in
the future, as well as new issues that arise with the expansion of the
agreement when including new countries.
Once signed, TPP will reach:
295 billion USD
in potential
global net
profits.
1/3 of
International
Trade
11% of total
population
Source: HSBC
TPP and Mexico
Mexican Exports to TPP countries,
USD, Aug 2015
Brunei
Vietnam
Malaysia
New Zealand
Singapore
Australia
Peru
Chile
Japan
Canada
US
Mexican Imports with TPP countries,
USD, Aug 2015
Brunei
28
0
8,167
New Zealand
24,519
9,475
Peru
31,730
10,005
Australia
35,251
40,549
Singapore
99,839
71,603
Chile
135,473
135,019
Vietnam
334,607
181,641
Malaysia
597,410
244,353
Canada
788,749
Japan
821,231
25,022,656
Source: Banxico
Benefits
US
1,419,134
16,032,382
Source: Banxico
Risks
Preferential access to 11 of the world's most
important economies, and improves Mexico's
preferential access to markets in Chile and Peru.
Automotive industry
Origin rule of 45% for vehicles
and auto-parts
Increase the attractiveness of Mexico as a
destination for foreign direct investment (FDI).
Textile industry
Risk of losing its main export market,
the US, with the entrance of Vietnam
To diversify its exports and markets to regions
with highly dynamic economies.
Possibility to export finished products to
other markets.
90% of Mexican imports from
Asia-Pacific are intermediate inputs
and capital goods.
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Pharmaceutical industry
Data exclusivity period of 12 years
for US, which could increase the price
of medicines in Mexico.
Sugar industry
The arrival of Australian sugar would
force Mexico to be more competitive to
remain the leader exporter of US.