Thank you for visiting our “Top 5 Delivered by DHL” series. It’s a fast and informative way to help you learn more about global topics that affect your business. Today, we are taking a closer look at the landmark Trans-Pacific Partnership (TPP) trade agreement and how it may improve your business’s ability to succeed and grow on an international scale. Look for more about Going Global, the change in Cuban sanctions, Brazil, NAFTA, Global E-Commerce, International Business Travel, Avoiding Import Delays, and Chile, Peru and Colombia on our YouTube playlist.
Below, we present the video “Top 5 Delivered by DHL: Trans-Pacific Partnership (TPP)”
In the last 30 years, free trade agreements (FTAs) have boosted international trade, fueled economic growth, and allowed people across the globe to access affordable goods and services. The TPP promises to continue this critical move toward open global markets — and your organization stands to benefit.
Here is what you need to know:
The TPP matters
In October, after more than five years of negotiations, the U.S. joined the 11 other nations that comprise the TPP to finalize an agreement that has far-reaching implications for the future of trade in the Pacific region. Together, the nations that make up the TPP – the U.S., Japan, Peru, Mexico, Canada, Australia, Brunei, Chile, New Zealand, Vietnam, Malaysia and Singapore – represent an estimated 40% of global output, and one third of all world trade. Once approved by government leaders in the U.S. and other TPP nations, the agreement will make it faster, easier and more affordable to move goods between participating countries.
It will level the playing field
The TPP will level the playing field for American workers and American businesses by eliminating over 18,000 taxes that various countries impose on U.S. made goods. The general principle behind FTAs is that the regulatory bodies of all participating nations agree to a set of rules that prevents any one country from having an unfair advantage over another. And so, by removing tariffs and non-tariff barriers, including certain import licensing requirements, the TPP will allow U.S. companies to truly compete in the Pacific region in a fair and open market.
It will promote digital trade and e-commerce
By eliminating tariffs on digital products (such as software, music, video, e-books), the TPP promises to open e-commerce doors in the Pacific region. The agreement protects the free movement of data so that businesses and consumers in the U.S. and the other participating countries can engage more easily in online shopping; it also bans “forced localization,” a practice requiring foreign companies to store their data on local servers. Ultimately, expanded digital commerce will create new trade and investment opportunities for many U.S. companies.
It will help small businesses
For the first time in any trade agreement, the TPP includes legal language specifically dedicated to helping small- and medium-sized businesses. Trade barriers create special challenges for small businesses, which have fewer in-house resources to deal with complex paperwork and customs “red tape.” The TPP addresses these issues, as well as the tax and logistic burdens that weigh more heavily on small companies. By opening up e-commerce and internet pathways, and by making it easier and faster to move shipments through customs, the agreement gives an important edge to small businesses looking to trade in the Pacific region.
It expedites customs procedures
As mentioned, the TPP will expedite customs procedures, including requiring that shipments under normal circumstances are released from customs within six hours of arrival into a TPP country. The agreement sets a strong goal of streamlining, harmonizing and automating customs procedures among partner countries, ensuring faster and easier shipping and logistics.
For an overview of the top 5 things you need to know about the TPP, check out the Top 5 Delivered video above. To watch more Top 5 Delivered videos, click here.
Have more questions about the TPP and what it means for your business? Ask us what you’d like to know at @DHLUS.