What Does The TPP Mean For Latin America?

The Trans-Pacific Partnership is one of the largest free trade agreements in the world with many benefits for members. In Latin America, Chile, Peru and Mexico are part of the TPP.

Three of the 11 countries in the Trans-Pacific Partnership are in Latin America and a fourth - Colombia - is hoping to join next year.

Chile, Peru, and Mexico are part of what is seen as the most significant trade agreement in recent years - despite the US backtracking on its original support and declining to join. Together, the Trans- Pacific Partnership county's economies account for 13% of global gross domestic product (GDP).

Negotiations for the new trade deal had taken several years before the pact was signed in Chile on March 8th. The 11 nations in what is now known as the Comprehensive and Progressive Transpacific Partnership (CPTPP), shortened to 'TPP 11', together account for about 15% of global trade and represent approximately 500 million people. The agreement is the world's third largest trade bloc after the European Union (EU) and the North American Free Trade Agreement (NAFTA).

Current members, besides the LatAm three, are Australia, Brunei, Canada, Japan, Malaysia, New Zealand, Singapore, and Vietnam. With a GDP of 4.9 trillion USD in 2016, Japan alone has the largest economy of the 11 TPP member countries and is the fourth largest exporter in world trade and the fifth largest importer. Once the CPTPP enters into force, likely to be later this year, it will be one of the largest free trade agreements in the world and will give enhanced market access to key Asian markets.

The thinking behind the deal is a commitment to free and open markets, designed to integrate Asia Pacific markets by reducing barriers to goods and services trade, protecting investments and intellectual property rights, establishing rules for e-commerce, and promoting fair competition.

Fully enforceable, the CPTPP is a legally binding agreement, supported by a system of dispute settlement, to bring rule of law and greater transparency and predictability to the regional trading regime.

Trade tariffs between the TPP 11 countries will be slashed considerably, eliminating customs duties on 95% of trade in goods and opening access to a combined marketplace worth around $13.7 trillion. The overall aim, according to the agreement, is "maintaining open markets, increasing world trade, and creating new economic opportunities for people of all incomes and economic backgrounds."

TMF Group...

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