The Trans-Pacific Partnership (TPP), or Trans-Pacific Partnership Agreement (TPPA), was a proposed trade agreement between 12 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. In the US, the proposal was signed on February 4, 2016 but not ratified as a result of significant domestic political opposition; both Hillary Clinton and Donald Trump opposed the agreement during their 2016 presidential campaigns; however, Hillary Clinton was originally in support. After taking office, President Trump formally withdrew the United States from the TPP in January 2017, ensuring it could not be ratified as required and did not enter into force. The remaining countries negotiated a new trade agreement called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which incorporated most of the provisions of its predecessor and entered into force on 30 December 2018.
The TPP began as an expansion of the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4), signed by Brunei, Chile, New Zealand and Singapore in 2005. Beginning in 2008, eight additional countries joined negotiations to broaden the agreement, eventually forming the 12-member TPP. Following the US's withdrawal, the remaining countries decided in May 2017 to revive the TPP, reaching a revised agreement, the CPTPP, in January 2018 and signing it in March 2018. The new agreement came into effect for those countries in December that year after ratification by six of them (Australia, Canada, Japan, Mexico, New Zealand and Singapore).
The original TPP contained measures to lower both non-tariff and tariff barriers to trade, and establish an investor-state dispute settlement (ISDS) mechanism. The U.S. International Trade Commission, the Peterson Institute for International Economics, the World Bank and the Office of the Chief Economist at Global Affairs Canada stated that the final agreement, if ratified, would have led to net positive economic outcomes for all signatories. Many observers at the time said the trade deal would also have served a geopolitical purpose, reducing the signatories' dependence on Chinese trade and bring them closer to the United States.
Membership
Twelve countries participated in negotiations for the TPP: the four parties to the 2005 Trans-Pacific Strategic Economic Partnership Agreement and eight additional countries. All twelve signed the TPP on 4 February 2016. The agreement would have entered into force after ratification by all signatories, if this had occurred within two years. If the agreement had not been ratified by all before 4 February 2018, it would have entered into force after ratification by at least 6 states which together have a GDP of more than 85% of the GDP of all signatories. The withdrawal of the United States from the agreement in January 2017 effectively ended any prospect of the agreement entering into force. In response, the remaining parties successfully negotiated a new version of the agreement without the 85% GDP threshold, the CPTPP, which entered into force in December 2018.
Withdrawn member
On 23 January 2017, US President Donald Trump signed a presidential memorandum to withdraw the United States' signature from the agreement, making its ratification as it was in February 2016 virtually impossible.
Potential members
APEC members would have been able to accede to the TPP, as would any other jurisdiction to which existing TPP members would have agreed. After an application for membership is received, a commission of parties to the treaty would negotiate conditions for accession.
South Korea did not participate in the 2006 agreement, but showed interest in entering the TPP, and was invited to the TPP negotiating rounds in December 2010 by the U.S. after the successful conclusion of its Free trade agreement between the United States of America and the Republic of Korea. South Korea already had bilateral trade agreements with some TPP members, but areas such as vehicle manufacturing and agriculture still needed to be agreed upon, making further multilateral TPP negotiations somewhat complicated.
Other countries that were interested in TPP membership include Taiwan, the Philippines, Colombia, and Hong Kong as of 2010; Thailand as of 2012; and Indonesia, Bangladesh, and India as of 2013. According to law professor Edmund Sim in 2013, many of these countries would need to change their protectionist trade policies in order to join the TPP.
The largest economy in the Pacific Rim not involved in the negotiations was China. According to the Brookings Institution in 2013, the most fundamental challenge for the TPP project regarding China was that "it may not constitute a powerful enough enticement to propel China to sign on to these new standards on trade and investment. China reacted by accelerating its own trade initiatives in Asia." In 2013, it was thought China might still be interested in joining the TPP eventually. An academic analysis has shown that while the TPP would be more successful if China participated in it, the benefits to China are intangible.
In October 2015, Indonesian President Joko Widodo declared Indonesia's intention to join the TPP.
As of 2016, Sri Lanka announced its interest in joining the TPP and studied its feasibility.
Likewise, as of 2016 Cambodia announced its interest in joining the TPP and is studied its feasibility.
In February 2021, the United Kingdom applied for membership of the CPTPP, the successor to the TPP.
In September 2021, China applied for membership of the CPTPP. Japan, the 2021 chair of the CPTPP, said that it would consult with member countries to respond to China's request.
In July 2023, as CPTPP members formally accepted the United Kingdom as the 12th member, Australia indicated that China has no hope of being accepted in the near term.
On June 2, 2026, the chancellor Pablo Quirno announced that Argentina will present the formal application for accession to the Transpacífico trading block.
History
Trans-Pacific Strategic Economic Partnership Agreement
Brunei, Chile, Singapore and New Zealand are parties to the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP), which was signed in 2005, and entered into force in 2006. The original TPSEP agreement contains an accession clause and affirms the members' "commitment to encourage the accession to this Agreement by other economies". It is a comprehensive agreement, affecting trade in goods, rules of origin, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, trade in services, intellectual property, government procurement and competition policy. Among other things, it called for a 90-percent reduction of all tariffs between member countries by 1 January 2006, and reduction of all trade tariffs to zero by the year 2015.
Although original and negotiating parties are members of the Asia-Pacific Economic Cooperation (APEC), TPSEP is not an APEC initiative. However, the TPP is considered to be a pathfinder for the proposed Free Trade Area of the Asia Pacific (FTAAP), an APEC initiative.
Original negotiations
In January 2008, the U.S. entered talks with the Pacific 4 (P4) members regarding trade liberalisation in financial services. This led to 19 formal negotiation rounds and a subsequent series of additional meetings, such as Chief Negotiators Meetings and Ministers Meetings, and resulted in the agreement announced on 5 October 2015.
Ratification of the original agreement
Japan and New Zealand ratified the original agreement.
Japan and its main competitor in the region, China, hold polar views on how South-East Asia's economy should develop. Prior to TPP, Japan tried to achieve dominance by proposing in September 1997 an Asian Monetary Fund (AMF), which never eventuated in the face of U.S. opposition. By 2011 Japan managed to establish a cooperative agreement with China and Korea called the "PRC–Japan–Republic of Korea Free trade agreement", also known as the CJK FTA, which did not include the U.S. By this means Japan intended to use the People's Republic of China card in order to shift TPP negotiations away from China towards Japan's agendas with support of the United States. Ratification of the TPP in Japan required political reforms that shifted some authority from the agriculture ministry to the prime minister.
On 9 December 2016 Japan's House of Councillors made a resolution of participation. Japan notified completion of domestic procedures for ratification to the depositary of the TPP treaty (New Zealand) as the first ratified country on 20 January 2017.
New Zealand ratified the TPP on 11 May 2017. New Zealand Prime Minister Jacinda Ardern (in office from October 2017) planned to renegotiate the Trans-Pacific Partnership (TPP) agreement in Vietnam in November 2017 in time to allow the New Zealand government to ban foreign speculators from buying existing New Zealand homes. She said: "Our view is that it will be possible to balance our desire to make sure that we provide housing that's affordable, by easing demand and banning foreign speculators from buying existing homes, while meeting our trade goals."
United States withdrawal
Aligning himself with his political opposition Hillary Clinton's rejection of the TPP in an interview on PBS in October of 2015, during a speech on the 2016 presidential campaign, Republican Party nominee Donald Trump vowed to withdraw the United States from the Trans-Pacific Partnership if elected. He argued that the agreement would "undermine" the U.S. economy and its independence. On 21 November 2016, in a video message, Trump introduced an economic strategy of "putting America first", stating that he would negotiate "fair, bilateral trade deals that bring jobs and industry back onto American shores." As part of this plan, Trump confirmed his intent for the United States to withdraw from the Trans-Pacific Partnership on his first day in office. McConnell affirmed that the TPP would not be considered during the lame-duck session of Congress preceding the inauguration of Trump.
President Trump signed a presidential memorandum to withdraw the U.S. from the TPP on 23 January 2017. U.S. Senator John McCain criticized the withdrawal, saying "it will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it." U.S. Senator Bernie Sanders applauded the move, saying "For the last 30 years, we have had a series of trade deals… which have cost us millions of decent-paying jobs and caused a 'race to the bottom' which has lowered wages for American workers."
United States public opinion
In a 2018 study conducted on general foreign trade, researchers have found that a sizable majority of U.S. adults view foreign trade as conducive to U.S. growth rather than a foreign threat. In an international context, however, Americans generally are among the least likely to support the Trans-Pacific Partnership. A clear partisan divide existed among the U.S. public in supporting the trade deal, with those who identify as members of the Democratic Party or are politically independent being more likely to have a positive opinion of it than those who are members of the Republican Party. Moreover, younger people are more likely to support it than their elders.
President Donald Trump has expressed opposition to the TPP as a tenet of his 2016 election platform, which contributed to his popularity. Critics complained that while Trump has worked to contain the economic and geostrategic influence of China, withdrawing from the TPP reduced the effectiveness of a treaty that was designed to do exactly that.
In any case, free trade has been a politically contentious issue in the U.S. Many Presidential candidates vigorously oppose it while those who initially stood behind it became much less vocal in their support. Following the 2020 Presidential election, there is little enthusiasm for the TPP among elected officials in the federal government.
New negotiations and CPTPP
TPP's future was uncertain after the United States withdrew. Several signatories, however, signaled their intention to rework TPP without US participation.
In January 2018, the remaining eleven countries agreed on a revised TPP, now renamed the "Comprehensive and Progressive Agreement for Trans-Pacific Partnership" (CPTPP). CPTPP is substantially the same as TPP, but omits 20 provisions that had been added to TPP at US insistence and that are now no longer binding. These provisions primarily relate to investment, government procurement and intellectual property.
On 16 July 2023, Kemi Badenoch, the UK business secretary, signed the accession protocol for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is a trade bloc consisting of 11 member states. The UK government claims that this agreement will provide British businesses with access to a market of 500 million people, resulting in significant benefits. However, critics argue that the economic impact of the deal over a 10-year period will be limited.
Contents
A version of the text of the agreement "subject to legal review" was released by prospective member parties on 5 November 2015. Portions of drafts of the full agreement were previously leaked to the public. Many of the provisions in the leaked documents are modeled on previous trade agreements.
The contents of the TPP go far beyond the standards drafted by the World Trade Organization. The TPP includes a negative-list of all sectors covered for the liberalizing trade, except for those clearly stated. The TPP includes new regulation for online commerce, treatment of foreign investors, far more comprehensive protection for intellectual property, labor codes, and an agreement for neutrality regarding state-owned enterprises.