Trans-Pacific Partnership and Its Benefits for the Trade World - Literature review Example

Major Business Report 0. Introduction With the advent of globalisation, the aspect of conducting business and cross-border trade has changed rapidly owing to the changes in the trade policies and business relationships amid countries. Furthermore, owing to globalisation the barriers of conducting trade have eliminated up to quite a larger extent which further makes it easy for people to travel from one place to another to conduct trade activities with minimum restrictions associated with the same. There are free trade policies that countries engage in to promote trade in their area further boosting the economic sector of their respective regions (Pride et al., 2011). Contextually, in this particular context, the Australian government has involved with certain negotiations with the Asia-Pacific countries to ensure a free trade area in the same under a particular partnership called the Trans-Pacific Partnership (TPP). Apart from Australia, the countries involved in the negotiations include Canada, Japan, Chile, Mexico, Malaysia and New Zealand among others. As per the latest development in this particular scenario, the representatives of the countries have mentioned about the aspect that the TPP negotiations are about to get complete since it is in the final stages (Lim et al., 2012). However, it is argued that this particular partnership will bring several negative effects which are important to be taken into consideration. Contextually, this particular paper will mainly intend to present a report which will depict the issues and challenges that might accompany with the Trans-Pacific Partnership (TPP). The report will also include recommendations for the Australian Department of Foreign Affairs and Trade (DFAT) with regard to their future approaches in this particular matter. 2.0. Trans-Pacific Partnership (TPP) and Its Benefits for the Trade World As inferred, the TPP is a particular partnership of several nations of the world in order to eliminate the trade barriers and ensure free trade within the Asia-Pacific region of the world. The partnership primarily seeks to promote along with integrating the economies of various areas of the Asia-Pacific region. There are nine nations of the world that have shown their interests and involved in negotiations to enter into a free trade partnership. It is one of the largest and the most talked about trade partnerships of the history due to the involvement of a few of the biggest economies of the world. It is regarded as one of the possible and realistic steps that has been undertaken to promote free trade in Asia-Pacific. It is believed that the Asia-Pacific region is one of the major drivers for growth in the global economy. This is because of the fact that more than 50% of the global trade is conducted through this particular region of the world. The participation of the various nations of the world will further enhance the trade relations of the nations involved in these partnership negotiations. However, the participation of the Australia in this particular trade partnership will certainly help the country positively. Being an open trading economy, the trade in the nation had reached new heights in the year 2013 with the involvement of the country in two-way trade. The country collected $646.1 billion in the year 2013. With the involvement of the country in the open trade relations as per the TPP Australia and other nations involved will be able to get better trade opportunities further enhancing the economy of the nation. The TPP is also believed to have the potential benefits in the domain that various nations will be able to build a better trade relationship with the Asia-Pacific region owing to the common trade rules proposed by TPP. The TPP is also expected to provide practical outcomes in the domain of electronic commerce which will again benefit the consumers as well as businesses altogether. These benefits will certainly encourage successful accomplishment of this particular trade partnership (Department of Foreign Affairs and Trade, n.d.). 3.0. Critical Analysis of the Issues and Challenges Associated with TPP The above discussion mainly highlights the basic paradigm of the concept and the implications associated with TPP. The discussion also depicted how the partnership will influence trade relations amid Australia and other nations with the Asia-Pacific region. However, the other side of the coin reveals that there are certain key issues and controversies associated with the partnership which further hinders the successful accomplishment of the negotiation process and the initiation of the partnership practically. It has been noted that the TPP suffers a serious setback in the area of transparency, copyright issues and unbalanced legal compliance. The failure of ensuring better intellectual property (IP) laws with regard to the negotiation process is deemed to be another roadblock for the accomplishment of the partnership. Notably, the leakage of a few of the draft texts of the agreement raised questions over the freedom of speech, right to privacy as well as due process of the people further initiating the IP chapter. It is a widely known fact that the TPP has various stakeholders who are more or less affected by the implications and the results of this particular agreement. It has been observed that since the agreement involves the interest and wellbeing of several nations of the world, the TPP includes clauses relating to intellectual property laws that cover copyright, trademarks along with patients. However, since the release of the confidential data and information relevant to TPP in public, debates have increased over this particular agreement. In this regard, the United States (US) had called for the need of more stern copyright measures which are far more effective than the current measures and steps in the international treaties (EFF, n.d.). Notably, more stern measures in the domain of IP will mean that other countries will need to change their copyright policies in an extensive manner which includes Australia as well. As part of the TPP, greater likability will be placed on the internet users with the introduction of US Digital Millennium Copyright Act (DMCA) Internet intermediary’s further requiring countries including Australia to change their copyright laws. The TPP also involves the proposal of extending the terms of copyrights that are beyond the international level to safeguard intellectual property associated with the agreement which might further show or demand significant changes in copyright terms of Australia and other nations. The TPP also involves the proposal for inclusion of a three-step use of the internet to ensure fair use without any risk. However, Australia and other nations advocated for the presence of a more user-friendly approach to ensure utmost trust and involvement of public. The TPP also calls for enacting the law where circumvention of digital locks should be banned. However, this aspect will require Australia to remove region-coding on movies, videogames and software. Again, the TPP under the US position on investor-state dispute settlement provision (ISDS) enables the foreign firms to sue the government. This aspect is also a potential issue for Australia as it is already involved with a number of litigations with foreign companies. The TPP also includes extensive implications in the domain of medicine and health with regard to tariffs associated with the same as per the proposal of the US (Chan, 2013). However, countries including Australia and others opposed to this aspect it deemed to be more profitable for the US firms rather than the non-US companies. Besides, the text of exemptions of tobacco has been accepted by several countries but not by Australia. This is because Australia is a leader in this domain and companies operating in the same might not get benefitted from this particular element of the TPP. In the domain of agriculture, Australia and others have accepted the removal of subsidies but the US has strongly opposed. This can be relevant to the international trade theory of Hecksher-Ohlin which depicts that capital intensive nations can ensure maximum advantage of free trade with the increase in production of capital intensive products. Since the US is strong in the domain of agriculture, the reluctance related to the removal of subsidies in agriculture can be comprehended (Department of Economics, 2014; Chan, 2013). This might also affect the operations of the non-U.S firms in an unfavourable manner. There is also an issue relevant to the fact that quite less is known to the common public with regard to the concept of TPP owing to the aspect that any information relevant to TPP is not made available to the public, press and the policy makers. This is also a potential issue as it impacts the interest of the people (Bowie, 2013). However, there are various advantages and positives sides of TPP for Australia and other nations involved which cannot be overlooked. Notably, the agreement also includes negotiations for eliminating the tariff and the non-tariff barriers that are involved in the international trade in the Asia-Pacific region. This negotiation intends to assure that with the removal of the tariff barriers there should be any sort of replacement with other sort of barriers to trade (Fergusson et al., 2013). Moreover, the TPP will enhance the trade relations of Australia with other nations of the world further ensuring economic benefit for the nation. Notably, with the accomplishment of the TPP agreement, Australia will be able to ensure a tariff free trade in numerous commodities with Asia-Pacific region and the US as well. With TPP, Australia could also be able to speed up its trade of beef, sugar and dairy products with the US in the market further boosting the economy of the nation. Hence, it can be stated that both the positives as well as the negatives are associated with the TPP which further influence the decision making of the authorities. 4.0. Recommendations From the above analysis, both the positive as well as the negative sides of TPP can be comprehended. However, considering the benefits of TPP, it offers to Australia and other countries of the world, it can be recommended to The Australian Department of Foreign Affairs and Trade (DFAT) that they should proceed in completing the current negotiations for TPP in an expedite manner to leverage maximum benefits from the same in the long run. Notably, with the improvement in the IP laws and regulations as per the TPP, Australia along with other counties might need to change their present laws relating to copyright but it will certainly strengthen the domain of privacy which should not be overlooked. Additionally, though in the presence of TPP, countries are expected to lose their sovereignty in developing their own policies as per their domestic priorities. However, by adhering to the common principles of trade as per TPP, Australia could be able to have better trade access and relationship which might further boost both their international and domestic trade activities. This should also be taken into consideration by DFAT and should complete the negotiation process with utmost rapidity. Furthermore, in the presence of TPP, Australia will also be able to ensure its access to new markets to which it has no trade relations yet. This will enhance the trade base of the nation and increase its trade volume which also will impact its economy positively. Hence, the benefits of TPP are quite apparent over that of its disadvantages for Australia. 5.0. Conclusion From the overall analysis presented in the report, it can be comprehended that economic growth and sustainability is of the vital issues that each and every nation of the world is dealing with. Notably, in the present day context, countries intend to enhance their economic scenario through enhancing and expanding their trade activities all over the world. However, the prevalence of numerous trade barriers impacts this particular approach of companies up to a considerable extent altogether. This aspect is further eliminated or reduced with the assistance of agreements and treaties amid countries. Contextually, TPP is a particular agreement amid various top nations of the world to ensure free trade in the Asia-Pacific region. Countries including Australia have to deal with certain issues accompanied with TPP along with leveraging the benefits associated with the same which has further hindered their decision making. However, through analysis, it has been determined that the benefits of the agreement are quite large in quantity. Hence, recommendations have been made to The Australian Department of Foreign Affairs and Trade (DFAT) to take a positive stance to accomplish the negotiation process successfully and ensure the use of TPP practically. 6.0. References Bowie, N. (2013). The Trans-Pacific Partnership (TPP), an oppressive US-led free trade agreement, a corporate power-tool of the 1%. Retrieved from http://www.globalresearch.ca/the-trans-pacific-partnership-tpp-an-oppressive-us-led-free-trade-agreement-a-corporate-power-tool-of-the-1/5329497 Chan, G. (2013). Trans-Pacific Partnership: a guide to the most contentious issues. Retrieved from http://www.theguardian.com/world/2013/dec/10/trans-pacific-partnership-a-guide-to-the-most-contentious-issues Department of Economics. (2014). Theory of international trade. Retrieved from http://econweb.tamu.edu/aglass/econ652/ln1slides.pdf Department of Foreign Affairs and Trade. (n.d.). About the TPP negotiations. Retrieved from http://www.dfat.gov.au/fta/tpp/ EFF. (n.d.). Trans-pacific partnership agreement. Retrieved from https://www.eff.org/issues/tpp Fergusson, I. F., Cooper, W. H., Jurenas, R., & Williams, B. R. (2013). The Trans-Pacific Partnership (TPP) negotiations and issues for congress. Retrieved from http://www.fas.org/sgp/crs/row/R42694.pdf?utm_source=The+Trans-Pacific+Partnership+Would+Destroy+our+National+Sovereignty&utm_campaign=Trans-Pacific+Partnership&utm_medium=email Lim, C. L., Elms, D. K., & Low, P. (2012). The trans-pacific partnership: a quest for a twenty-first century trade agreement. US: Cambridge University Press. Pride, W., Hughes, R., & Kapoor, J. (2011). Business. US: Cengage Learning. Read More