Landmark trade agreement finalised
The ongoing negotiations for the Trans-Pacific Partnership Agreement (TPPA) have been shrouded in secrecy. However, despite a previous lack of certainty, the participating nations have finally come to an agreement.
The business development opportunities within global trade can help foster growth. In light of this, here are five key aspects of the deal that you should be aware of.
Who is involved?
The TPPA is between 12 countries, including Australia. These nations are: Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Along with Australia, these countries represent 40 per cent of global GDP.
What will it cover?
Aimed at fostering free trade, the agreement will cover agriculture, manufacturing, services, resources and energy. The TPPA will also improve the capability of foreign investment in our country and encourage Australian investment in the corresponding nations.
What does the government expect will come out of it?
The Minister for Trade and Investment, Andrew Robb states that these countries contribute 24 per cent of global trade services. Furthermore, Mr Robb notes that Australia's service exports to the participating nations totaled an estimated $20 billion in 2014 alone. This is approximately 35 per cent of our overall services exports.
Mr Robb estimates the deal will eliminate the majority (98 per cent) of tariffs, opening the country up to increased goods exports, services and investment trade opportunities.
Alongside this, the government expects certain trade opportunities will be bolstered by the pact. Australian sugar is specifically stated as receiving increased market access to the United States through this deal.
What stays the same?
The pact will not change any intellectual property legislation or policies. Concerns regarding copyright, pharmaceutical patents and how these are enforced has been a key issue, alongside the potential of increased medicine prices.
Mr Robb stated that this will not be the case and claimed that the TPPA will be a rise in medicine prices.
How could this affect SMEs?
Any legislative changes involving trade will not directly benefit every industry. However, it is important for Australian companies to understand the core components that could impact their revenues. These key concepts should also be incorporated into their business plans.
With the rise of ecommerce, trade opportunities are a welcome opportunity for all businesses, big and small. The right planning can contribute to greater business development which relies on staying up to date with the latest legislation.