Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Australia
Assignment: Essay 2 After seven years of negotiation, the Trans-Pacific Partnership (TPP) was signed on February 4, 2016, with 12 countries participating. The United States withdrew its signature from the TPP on January 23, 2017. The 11 remaining participants nonetheless pushed forward with a slightly revised version of the deal, rebranding it as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP entered into force on December 30th, 2018, thus establishing the third largest free-trade area in the world. Because the agreement is still very new, its effects are only just beginning to be felt. Your assignment is to adopt the position of one of the 11 signers of the CPTPP and determine whether the agreement is more likely to be beneficial to your country or harmful to your country overall. In formulating your essay, consider the following: • What exactly does the CPTPP do for your country? Is it merely about trade, or does it address other issue areas? What is its likely overall impact on tariffs and non-tariff barriers? • In what industries does you country have a comparative advantage (think factor endowments and Heckscher-Ohlin trade theory)? How might the CPTPP affect those industries? Will it increase exports? • How might the CPTPP affect the import of foreign goods and services into your country? Which of your domestic industries will most likely be impacted by imports (think Stolper-Samuelson vs. Ricardo-Viner)? Does the CPTPP allow you to protect any of these industries? • How might the CPTPP affect culture, intellectual property, the environment, public health, or other non-trade issues? Does the agreement include any special considerations, exceptions, or protections for your country? The following links will get you started: • http://infojustice.org/wp-content/uploads/2011/11/APEC-USTR-Fact-Sheet-on-TPP-112011.pdf • https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp • https://www.csis.org/analysis/tpp-cptpp • https://www.economist.com/the-economist-explains/2018/03/12/what-on-earth-is-the-cptpp • For basic background information on your chosen country, see: https://www.cia.gov/library/publications/ the-world-factbook/ Additional guidelines: • Avoid speculation. Your analysis should be rooted in verifiable facts, expert opinons, policy positions of reputable advocacy groups, and/or statements of public officials. Use a news archive tool like Factiva or Lexis-Nexis (both available via the UCD library) to scour recent stories from newspapers and newsmagazines. These tools will also allow you to search (in English) the newspapers of your chosen country. Note that the foreign ministry websites of most CPTPP member states include guidelines and policy statements on the TPP. For example: – Australia: https://www.dfat.gov.au/trade/agreements/in-force/cptpp/Pages/comprehensive-and-pro gressive-agreement-for-trans-pacific-partnership.aspx – Japan: https://www.mofa.go.jp/ecm/ep/page25e 000266.html – New Zealand: https://www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-i n-force/cptpp/comprehensive-and-progressive-agreement-for-trans-pacific-partnership-text-a nd-resources/ – Canada: https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux /agr-acc/cptpp-ptpgp/index.aspx – Malaysia: https://fta.miti.gov.my/index.php/pages/view/71 • Be sure to employ the concepts and terminology discussed in the lectures and course readings. This includes, for example, comparative/absolute advantage, factor endowments, Heckscher-Ohlin trade theory, protectionism (tariffs and NTBs), Stolper-Samuelson vs. Ricardo-Viner, and so on. Use these concepts to develop your analysis of the CPTPP. • Be sure to use reputable sources. Blog posts, Wikipedia articles, random websites, and similar low-quality sources are not acceptable. Examples of acceptable newspaper sources include The Wall Street Journal, New York Times, Financial Times, Los Angeles Times, Washington Post, etc., as well as major international newspapers, such as Japan Times, Herald Sun (Australia), Globe and Mail (Canada), etc. Examples of acceptable newsmagazines include Bloomberg, The Economist, The Atlantic, Mother Jones, Forbes, etc. Policy journals with an international focus, such as Foreign Affairs, Foreign Policy, and The Washington Quarterly are also excellent resources. Consult with your TA if you have concerns about a particular source. Your essay should incorporate 4-5 high-quality sources beyond the course readings and those listed above. • All sources must be meticulously and thoroughly documented, including assigned course readings. Any reference to a source must be properly cited. See this link for guidance: https://ossja.ucdavis.edu/preventing-plagiarism. Be sure to include a separate list of references. (The list of references is not included in the word count.) Any instance of suspected plagiarism will be immediately referred to the UC Davis Office of Student Support and Judicial Affairs. • Essays must be approximately 1,500 words in length, ± 100 words. Only typed essays will be accepted. Please use a standard 10–12pt font with 1” margins. You may use whichever style guide you prefer (APSA, MLA, Chicago, APA, etc), but do use a style guide. (NB: Your TA may request a specific style guide.) • Essays should be logically and coherently organized, with an introduction, a conclusion, and a specific thesis statement. The writing should be clear, concise, and free of grammatical errors. Excessive errors will lower your grade. • Essays are due no later than March 13th at 5pm. Essays must be submitted electronically, via the Canvas assignment module for Essay 2. We will not accept hard copies or emailed papers. You are welcome to submit your paper as far in advance of the deadline as you’d like. Be sure that you upload the correct, final version of your essay. Once you’ve uploaded the file, it cannot be changed. • Late papers will be docked one full letter grade per day. (E.g., a grade of 91% will be reduced to 81%.) This penalty begins at 5:01pm on the due date and recurs every 24 hours thereafter. All late papers will be penalized, regardless of the reason for lateness. UC Davis has many computing resources. A computer glitch, hard drive failure, or wifi malfunction is not an acceptable justification for lateness. It is your responsibility to ensure you have reliable internet access. If you expect to encounter scheduling or other issues around the due date, you should arrange to complete and submit your paper in advance of the deadline. Essays will be graded according to the following rubric: • Shows sufficient background knowledge of the CPTPP and the selected country, and shows a general conceptual understanding of the CPTPP’s basic goals and likely impacts on tariffs/NTBs • With reference to specific industries, the essay uses basic trade theory (e.g., Heckscher-Ohlin, Stolper-Samuelson, Ricardo-Viner) to explain (1) how the CPTPP will likely affect industries in which the selected country has a comparative advantage, (2) how the CPTPP will likely affect industries that compete with imports, and (3) whether the CPTPP allows protection for vulnerable industries • Considers some plausible impacts of the CPTPP on non-trade areas, such as culture, IP, the environment, public health, etc., with specific reference to areas of importance to the selected country • Uses appropriate sources where needed, such as reputable newspapers and newsmagazines, and does not use inappropriate sources (e.g., Wikipedia) • Meets expectations for grammar, spelling, writing style, and word count • Includes citations for all referenced material
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Australia
Name
Institutional Affiliation
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Australia
Introduction
On February 4, 2016, 12 participating countries signed the free trade agreement (FTA) known as the Trans-Pacific Partnership (TPP) in which Australia was a member state. A year later, the United States pulled out of the agreement on January 23, 2017. TPP was further revised by the remaining 11 states and rebranded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), entering into full force on December 30, 2018. The signing of the CPTPP on March 8, 2018, at Santiago, Chile became phenomenal as it is the third-largest free trade area globally, even after the withdrawal of the largest economy in the world (Goodman, 2018). In the recognition of the challenges that face small and medium-sized enterprises (SMEs) to establish export markets, the CPTPP is also keen on the outcomes to ensure the process is seamless in the region. In Australia, the CPTPP facilitates the maintenance of a substantial market access package that was secured in TPP, the original version of the agreement. The market access package will later be implemented among the member states thus delivering new opportunities for firms, investors, and exporters engaged in international business in Australia (Dean, 2019). The CPTPP also ensures the maintenance of the ambitious scope and the original TPP's high-quality standards and rules. while focusing on the countries that are inside the CPTPP, it is evident that even states that are outside the agreement will be impacted in some ways. For instance, Banga (2019) has offered empirical estimates of the possible impact the CPTPP will have on the Malaysian merchandise balance of trade. However, for the scope of his essay, the paper will explore the relevance of the CPTPP in Australia, the industries with comparative advantage in the country, effects of the CPTPP on import of foreign goods and services and the impact of the CPTPP on culture, intellectual property, the environment, public health, and other issues.
The relevance of the CPTPP in Australia
The momentous and ambitious agreement, the CPTPP, is a regional free trade agreement that includes membership from some of the most important partners in trading in the Indo-Pacific region. one of the best deals for Australia is that investors and exporters will largely benefit from the new market access in other member states with the reduction of tariffs and other trade liberalization (Dean, 2019). The CPTPP expands on the preferential access to the market that the Australian investors and exporters have access to via the existing free trade agreement such as with Japan. the agreement also brings new opportunities for market access and new free trade agreement concerning Canada and Mexico. Secondly, Australia is bound to benefit from the agreement riles which appear to be broader in scope compared to other free trade agreements. This is because the CPTPP integrates rules in other free trade agreements like customs requirements, which make the trade of goods at the border to be predictable and seamless. also included in the CPTPP are rules on issues that are yet to be integrated into other trade agreements such as state-owned enterprises (SOE) rules. Other important benefits of the CPTPP to Australia include the amplification of the benefits for Australia with the expanded CPTPP, global value chain benefits to the country, and laws regarding national security, quarantine measures, food labeling and standards, public health, consumer protection, and the environment will remain intact (Dean, 2019). This shows that the CPTPP does not only deal with trade but the general welfare of the member states. for instance, the global value chain benefits will ensure Australia has a greater range of goods and services for its citizens at more competitive prices.
Australian Industries with Comparative Advantages
Key sectors such as the telecommunications, financial services, mining, and resources industries that invest overseas have a comparative advantage as the agreement also include critical elements that deliver a more predictable and liberalized regime for foreign investment regulation. with the CPTPP, Canada allows investors in Australia to apply for 49 percent exemption from foreign equity limit on uranium foreign ownership devoid of securing a Canadian partner. There will also be no screening for Australians with investments CAD 1.5 billion into Canada and USD 1 billion into Mexico (dfat.gov.au, 2019). Finally, the commitment by Vietnam, Japan, and Brunei Darussalam will benefit Australia by only imposing conditions on forging investment on the initial sale of state-owned assets or interests. In particular, the export industry will benefit from the level of predictability and transparency across the border thus reducing regulatory risks that such exporting firms face globally. For the financial service industry, companies can provide such as portfolio management services and investment advice as well as insurance of risks that relate to maritime shipping and international commercial freight and aviation. Australian companies offering mining equipment technologies and services and oilfield services can benefit from the Vietnam and Mexican energy sector reforms. The new rules introduced on large government-owned enterprises also help providers from Australia compete equally in the market. other industries that will benefit from the CPTPP include the health sector, especially private health and related services, education sector that includes universities and other vocational programs, and professional service in...
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