TPP

Definition

TPP, or the Trans-Pacific Partnership, is a multilateral trade agreement that aims to promote economic growth and integration among its member countries. It is designed to lower tariffs, harmonize regulations, and facilitate the flow of goods, services, and investments across the participating nations.

5 Must Know Facts For Your Next Test

1. The TPP was originally signed in 2016 by 12 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam.
2. The TPP aimed to create a free trade area that would account for approximately 40% of global GDP and one-third of world trade.
3. The United States withdrew from the TPP in 2017, but the remaining 11 countries went on to sign the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP-11, in 2018.
4. The TPP/CPTPP agreement covers a wide range of trade and investment issues, including tariff reductions, rules of origin, services trade, investment protection, intellectual property rights, and e-commerce.
5. The TPP/CPTPP is seen as a key component of the broader economic and geopolitical strategy to counter China's growing influence in the Asia-Pacific region.

Review Questions

• Explain how the TPP aims to promote economic growth and integration among its member countries.
  • The TPP is designed to promote economic growth and integration among its member countries by lowering tariffs and other trade barriers, harmonizing regulations, and facilitating the flow of goods, services, and investments across the participating nations. This is expected to increase trade and investment opportunities, enhance market access, and foster deeper economic interdependence and cooperation among the TPP member countries.
• Describe the role of the TPP in the broader context of globalization and trade liberalization.
  • The TPP is a key component of the broader trend of globalization and trade liberalization. By reducing trade barriers and promoting the free flow of goods, services, and investments, the TPP aims to further integrate the economies of its member countries into the global economy. This aligns with the broader goals of globalization, which include increased economic interdependence, the spread of technology and ideas, and the expansion of international trade and investment.
• Analyze the geopolitical implications of the TPP/CPTPP agreement, particularly in relation to China's influence in the Asia-Pacific region.
  • The TPP/CPTPP agreement is seen as a strategic move to counter China's growing economic and geopolitical influence in the Asia-Pacific region. By establishing a large free trade area that excludes China, the TPP/CPTPP is intended to strengthen the economic and political ties among its member countries, while also providing an alternative to China's own regional economic initiatives, such as the Belt and Road Initiative. This geopolitical dynamic highlights the broader competition between the United States and China for economic and strategic dominance in the Asia-Pacific.

Related terms

Free Trade Agreement: A free trade agreement is a pact between two or more nations to reduce or eliminate barriers to trade, such as tariffs and quotas, in order to increase the flow of goods and services between them.

Globalization: Globalization is the process of increased interconnectedness and integration of economies, societies, and cultures across the world, driven by trade, investment, and the exchange of ideas and technologies.

Trade Liberalization: Trade liberalization refers to the reduction or elimination of barriers to international trade, such as tariffs, quotas, and other government regulations, in order to promote the free flow of goods, services, and investments across borders.