Australian Policy towards Trans-Pacific Partnership - Case Study Example

Australian Policy towards TPP Name: Date: Course: Australian Policy towards TPP Introduction The Trans-Pacific Treaty agreement refers to a Free Regional Trade Agreement that currently under negotiation among states around the Pacific sea. They include The United States, Australia, Brunei, Vietnam, Singapore, Peru, New Zealand, Chile, Canada, Japan, Malaysia and Mexico. The main role of the Free Trade Agreement is to liberalize trade in almost all services and goods among the signatory parties (Armstrong, 2011). The agreement is inclusive of rule-based agreements that go beyond those set by the World Trade Organization. If the Trans- Atlantic Treaty agreement goes through, it would mean that all tariff and non-tariff barriers to both investment and trade among member states. It would also act as a template for trade relations among members of the Asia- Pacific Economic Co-operation (APEC) (Armstrong, 2011). The Trans Pacific Treaty Agreement will benefit Australia by increasing productivity and allowing Australian products into markets in Asia that they were previously unable to penetrate. Professional services will also find it easier to set up their operation abroad under the new agreement (Brian and Jung, 2013). Many benefits do come with the agreement, and very many preparations in terms of policy creations and the shift will have to be created by legislators to make the agreement a reality. Benefits and Anticipatory Industry Policies Dairy The partnership would, however, improve on the bilateral trade agreement that was struck between Japan and Australia in 2014 (Elms,. et.al. 2013).The partnership is set to eliminate all tariffs on cheese products and gives provisions for quota allocations and tariff reductions on the remaining cheese products. The agreement has huge benefits to farmers since it eliminates 98% of tariffs on Australian exports to countries signatory to the Trans Pacific Agreement (Powell, 2015). These benefits exceed those that could be reached in bilateral trade agreement especially in Canada, Mexico and Peru where Australia did not have previous trade agreements. Grains The agreement results in the creation of new quotas for wheat and barley exports to Japan. The quotas are under the buy-sell mechanisms that are valued over $481 million. Quotas for roasted malt exports are also provided while there is the elimination of wheat and barley exports to Mexico from Australia (Thomas, 2012). Rice The partnership has a provision for new quota access into the Japanese market offering a 6,000-tonne quota, rice preparation products have their tariffs reduced, and there is an amendment to the previous quota created by the World Trade Organization of 60,000 tonnes medium grain rice (Thomas, 2012). The partnership eliminates all tariffs on wool and cotton from Australia to signatory parties of the Trans Pacific Partnership. The connection goes a step further to improve rules and regulations on the textile origin and will most probably lead to higher demand for fibre products from Australia (Powell, 2015). E-Commerce There might be problems for the brick and mortar retailers in Australia since international giants will be permitted to sell their products on the Australian market. The agreements prohibit any customs duties on electronic transmissions. It further prevents signatory parties from favouring local producers or suppliers through discriminatory measures. It indicates that there will be a shift in policy (Fergerson, 2010). Previously, the Australian Government required global companies including banks and hospitals to store the details of their customers in local data centres. Such policy will have to be abolished. Financial Services Through the Trans Pacific Agreement, Australian finance firms will be able to get customers from overseas and also transfer their staff to overseas branches (Hult, 2015). The partnership gives financial firms more access to markets within the 12 countries signatory to the partnership. Industry regulator does however still hold the power to intervene in the case of any financial crisis. The agreement covers areas of pension schemes, investment advice, funds management services and insurance related to aviation and shipping. The partnership also seeks to lower the regulatory procedures of firms that would want to export their services (Chang, 2015). Members of the agreement have committed to allowing financial institutions to transfer data in and out of their countries for processing. Australian financial firms have for the past few years had increased presence in the international market. Under the agreement, they will be able to move their staff and specialists to the region for longer periods. Such a move is good for funds management business. The firms will have the capacity to trade in financial services as the domestic providers in the countries signatory to the agreement (Kesley, 2010). Financial Policy Industry policies likely to be seen in the financial services sector include regulation. Under the agreement, each of the member countries must be able to regulate its financial service industry. The regulation must not be only during the crisis but also in the day to day running of the industry (Brian and Jung, 2013).There is a likelihood of the strengthening of institutions and capacities in the financial services sector so that an equal and standard playing ground is created for both local and international finance firms in Australia. It would also be important so that it becomes easy to deal with a crisis in the event it occurs. There will also be a relaxation of policies related to the export of financial services. The Trans Pacific Agreement sets to lower the regulatory burden on firms that would want to export their financial services. The Australian government will have to comply with this by reducing the rigorous procedures that bar financial firms from exporting their services. Under the same, it will also have to allow the new businesses in the industry to relocate data in and out of the country so it can be processed (Fergerson, 2010). Copyright Policy. The Trans Pacific Partnership advocates for strict penalties to infringement of copyright laws. Today, a person found guilty for infringing copyright laws will be guilty of a civil offence. Under the partnership, there will be changes in the law to make the offence criminal (Chang, 2015). Such would mean a person could be jailed for a crime that did not previously exist, and the law would have to bring in a very harsh copyright regime. There will also be increased censorship on the internet since Internet service providers will be forced by law to enforce intellectual property rights. Food Safety and Labelling Policy Under the law today, companies are compelled to provide information on where their food products come from. The law allows the consumer to make an informed decision when buying that specific food item. The Trans Pacific Partnership, however, does not require producers to give information on where the particular food item comes from (Deborah, 2013). While the government insists that all parties negotiating at the Trans Pacific Partnership will retain their rights to the World Trade Organization to make policy related to human health and safety, there is a possibility that the rigorous laws and policies that the government has put on these food items are most likely to be relaxed. Drug Policy Generic drugs are readily available and cheap. Australian Pharmaceutical Benefits Schemes usually uses the generic drugs to subsidise medicine and give citizens access to the drugs that they require. There is a push to make pharmaceutical patents last longer among Trans Pacific Partnership signatory states (Deborah, 2013). For the government, it would mean that they have to increase the life of the patents under the law. For the consumers, there is a likelihood that the price of medicines would increase. The increase will be because once intellectual property rights of drug companies are strengthened, there will be delayed access to generic medicines (Chang, 2015). Corporate Policy The Trans Pacific Agreement allows foreign companies to sue governments for the loss of profits in the future. It is under the State Dispute Settlement (SDS) clause. In terms of policy, this would mean that the government has to be far too cautious when creating policies related to trade lest it would never have ended legal disputes with corporates (Ramli, 2015). Trade Policy The Trans Pacific Partnership sets to remove barriers and tariffs on member state exports. To the Australian government, there must be policies set by parliament to allow this. While the agreement will mean that the country will be able to easy get its products to the market within the Pacific Rim, it also means that products from the eleven signatory parties will also get into the country with much ease (Kesley, 2012). The policy will create competition hence more quality goods will be offered by industries, and it will do away with industries that are more of monopolies in the market. It will, however, create problems for local industries that are in their early stages since the market will be flooded. Alcohol and Tobacco Policy The Trans Pacific Partnership could tie the government to creating future policies on drugs and tobacco. It further empowers corporates to challenge regulations nationally and could seek compensation in international tribunals. For Australians, it means that tobacco and alcohol regulation poses very minimal impediments to global strategies and that the industry has a role in writing them (Kesley, 2012). The chapters on transparency and regulatory coherence in the Trans Pacific Partnership gives too much leverage to investors to influence tobacco and Alcohol policies. The agreement is also concerned with the running of the state’s enterprise, government purchasing and the protection of intellectual property. It sets out to create joint rules on issues of transparency and accountability. Under such, there will be a definite change in the way government business is run so as to allow the partnership to take effect. Conclusion The Trans Pacific Partnership is a great move towards regional integration. Considering signatories of the agreement take up 40% of the world’s Gross Domestic Product, it would be a fatal mistake if Australia was to miss out on this deal. It sounds benefits for most sectors and industries in the country, and it would lead to the improvement of living standards of the Australian people. Various laws and policies will have to be implemented to make the treaty a reality, a duty of the legislative organ. It hence in everyone’s best interest to see this become reality. References Armstrong, S. (2011). Australia and the Future of the Trans-Pacific Agreement. EABER Working Paper. Business Journal of Australia. 42(71): 1-24 Brian, M. and Jung, K. (2013). Science and Technology in International Economic Law: Balancing Competing Interests. London: Routridge Publishing. Chang, C. (2015). The Trans-Pacific Partnership Agreement: What’s in it for Australia? London: Cambridge University Press. Deborah, G. (2013). Emerging Threats to Public Health from Regional Agreements. The Lancet International Journal of Academic Research. 381(9876) 1507-1550 Elms, D. et.al. (2013). The Trans-Pacific Partnership: A Quest for Twenty-first Century Trade Agreement. London: Cambridge University Press. Fergerson, I. (2010). Trans Pacific Partnership Agreement. Collingdale: Diane Publishing. Hult, T. (2015). The Conversation. We may have cinched TPP, but is US trade a lost Cause? Amazon Publishers New York City. Kesley, J. (2012). New Generation Free Trade Agreements Threaten Progressive Tobacco and Alcohol Policies. International Journal of Academic Research.107 (10) 1719-1721 Kesley, J (2010). No Ordinary Deal. Unmasking the Trans Pacific Partnership Free Trade Agreement. Sydney: Allen & Unwin. Powell, R. (2015). TPP: Will the Trans Pacific Partnership Benefit Australian Food Industry. London: Cambridge University Press. Ramli, D. (2015). The Sydney Morning Herald. TPP: What it means for Australian Business. International Journal of Academic Research. Jul 2011, Vol. 3 Thomas, A. (2012). Challenges to Australia’s National Health Policy from Trade and Investment Agreements. Medical Journal of Australia. 196(5): 345-356 Read More