On October 5, 2015, Ministers of the 12 Trans-Pacific Partnership (TPP) countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam – announced conclusion of their negotiations.
The TPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services and covers the full spectrum of trade, including goods and services. The TPP also facilitates the development of production and supply chains, and seamless trade, enhancing efficiency and supporting our goal of creating and supporting jobs, raising living standards, enhancing conservation efforts, and facilitating cross-border integration, as well as opening domestic markets.
In 2014, 35 percent of Virginia’s goods exports went to TPP countries. There was $6.7 billion in goods exports from Virginia to TPP countries, including $553 million in goods exports to Japan, $133 million to Vietnam, and $118 million to Malaysia. 2,814 companies from Virginia exported goods to TPP countries in 2013 – 81 percent were small and medium sized companies.
Virginia is much more services-oriented than the US in the composition of its exports, with services representing 47 percent of Virginia exports and goods 53 percent. The TPP will expand market access and investment opportunities in a number of services sectors as well, including entertainment, telecommunications, software licensing, the internet industry, retailing, and logistics/express delivery. TPP will bar discrimination against digital provision of services and prevent customs duties on electronic transmissions.
The U.S. currently does not have preferential market access to Brunei, Japan, Malaysia, New Zealand, and Vietnam. Virginia’s exports would benefit from new market access as a result of these countries eliminating their tariffs as part of TPP.
Ninety-five percent of global consumers live outside of the U.S. and 81% of global economic growth is projected to occur outside the U.S. from 2015-2020. In 2009, North America accounted for 18 percent of the global middle class, while the Asia Pacific region accounted for 28 percent. By 2030, the North American share is projected to shrink to 7 percent, while the Asia Pacific share is projected to grow to 66 percent. With the new markets that will be opened to Virginia businesses because of the TPP, we can export more, profit more, and employ more Virginians.