INTERNATIONAL BUSINESS MANAGEMENT

BTMT2103
GROUP ASSIGNMENT
TRANS-PACIFIC PARTNERSHIP AGREEMENT
(TPPA)
LECTURE : Dr. Norhidayah

GROUP MEMBER :

Name

Matric No.

Fu Ming Shen

B061410022

Nur Hidayah Binti Roslan

B061410213

Nurshawanis Binti Abdullah

B061410249

Nur Erlianaidora Binti Lutfi Liew

B061410256

Norza Syajheha Binti Zamri

B061410227

1.0 INTRODUCTION
The Trans-Pacific Partnership Agreement (TPP) is a free trade agreement between
12 Asia-Pacific countries that liberalizes trade and sets consistent rules to make it easier
to do business across the region. TPP is New Zealands biggest FTA and the countries
involved account for 36 per cent of the global economy. TPP offers much better access to
large and important markets for New Zealands goods and services. The largest of these
markets is the United States, which is responsible for over a quarter of all household
consumption in the world.
TPP will create new trade opportunities, diversify New Zealands export
destinations and help firms do business overseas. Not being in TPP would put New
Zealand at a competitive disadvantage compared to other countries. The Trans-Pacific
Partnership (TPP) builds from the Trans-Pacific Strategic Economic Partnership
Agreement (P4) between Brunei, Chile, New Zealand and Singapore which entered into
force in 2006. The first round of TPP negotiations was held in Melbourne in March 2010.
Being a participant in TPP negotiations since the beginning has enabled Australia to seize
a strategic opportunity to shape the rules that will govern trade in the region.
Twelve countries are in TPP is Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. TPP countries
have a combined population of more than 800 million. Currently, the other 11 countries in
TPP account for over 40 per cent of New Zealands overall exports which is $20 billion
of goods exports and $8 billion of services exports. TPP is New Zealands first FTA
relationship with the United States, Japan, Canada, Mexico and Peru. Over $12 billion of
goods and services are currently exported to these five countries. The United States is the
biggest economy in the world and Japan is the third-biggest. These parties support
expanding TPP membership to other economies in the Asia-Pacific region which is
prospective new members must demonstrate a commitment to achieving an ambitious,
comprehensive outcome in the TPP. Decisions on TPP membership are taken by a
consensus of the existing parties.

2.0 FUNCTION OF TPPA

TPPA function is aimed at deepening economic ties between the countries

involved.

It is expected to substantially reduce tariffs, and even eliminate them in some

cases, between member countries and help open up trade in goods and services.

It is also expected to boost investment flows between the countries and further
boost their economic growth.
The member countries are also looking to foster a closer relationship on economic
policies and regulatory issues.
To enforce a common regulatory framework structured around the norms of
American trade policies that govern rules for tariffs and trade disputes, patents
and intellectual property, foreign investment, and other areas such as
environmental regulations and internet governance.
Obliges signatory countries to reshape their national laws and economic policies
to conform to a neo-liberal agenda set by giant multinational corporations, to the
benefit of local elites at the expense of the regions working classes and poor.
3.0 TPPA ISSUES
The Trans-Pacific Partnership (TPP) Agreement is a comprehensive agreement that will
open markets, set high-standard trade rules, and address 21st-century issues in the global
economy. By doing so, TPP will promote jobs and growth in the United States and across
the Asia-Pacific region. Unfortunately, there are some issues arise regarding TPPA.
First

of

all,

The

TPP

doesnt

strengthen

international

labor

rights

protections. There are extensive, well-documented labor problems in at least four TPP
countries

(Mexico,

Vietnam,

Brunei

and

Malaysia) but

the

administration

has not committed to requiring all countries to be in full compliance with international
labor standards before they get benefits under the agreement. Worker rights obligations
have never been fully enforced under existing free trade agreements, which have

provided too much discretion for worker complaints to be delayed for years or
indefinitely (e.g : Honduras, Guatemala).
The TPP makes affordable medicines harder to find. A Quality, affordable and
accessible health care is a human right and the trade policy should not interfere with
public health care choices, nor should it threaten public health. Unfortunately, the current
TPP text threatens access to affordable medicines by including new monopoly rights for
pharmaceutical companies which it delaying competition by affordable generics and
And last but not least, The TPPs weak rules of origin benefit China and other
non-TPP countries. The rules of origin in the current TPP text are weak and allow China
and other nonparticipating countries to reap the agreements benefits without having to
follow its rules. In fact, the TPPs auto content requirement allows the majority of the
auto content to be Chinese and manufactured outside the trade agreements rules. This
has the effect of promoting jobs in China while destroying U.S. auto supply-chain jobs.
Overall, it was found that the TPP Agreement has many weaknesses and need a
progressive improvement to handle these issues so that the TPPA members are fully
benefits as promised in the agreement.
4.0 WHY TPPA IS IMPORTANT TO INTERNATIONAL BUSINESS
The TPP boosts exports and economic growth, creating more jobs and prosperity for the
12 countries involved. The TPP is expected to lower trade and investment barriers that
will enable competitive firms to move into new markets, hire workers at better wages, cut
prices and improve the range of quality of goods and services available to households and
firms. Most of the gains in income would go to workers making more than $88,000 a
year. Besides, The Free trade agreements contribute to income inequality in high-wage
countries by promoting cheaper goods from low-wage countries. That would be
especially true of the TPP because it protects patents and copyrights. Therefore, the
higher-paid owners of the intellectual property would receive more of the income gains.
Competitive business pressures will reduce the incentives in Asia to protect the
environment.

A country with a more protected economy will benefit more from liberalization.
That's not what the man in the street thinks, but that's what economists think. If relative
to their economic size, Vietnam and Japan will benefit the most. Vietnam will benefit in
almost every sector thank to the jolt from external competition. Japan will receive a jolt
in the agricultural and service sectors such as retailing, education, insurance and so on.
On the other hand, free market economies are likely to have the smallest gains relative to
the country's GDP. Therefore, Singapore, Australia and New Zealand will likely
experience smaller gains in relation to GDP. Nevertheless, the most competitive firms in
these countries will gain from greater access to export markets. The same is true of
competitive firms in Japan example like a wide range of manufacturing firms in Japan
will get the benefit.

5.0 HOW TPPA RELATED TO INTERNATIONAL BUSINESS

TPPA is The Trans-Pacific Partnership that create a freetrade zone among 12
nations around the Pacific, making it the Worlds largest but how its affect the
International Business activities. TPPA is similar to NAFTA at a high level that involves
pledges to reduce or eliminate tariffs on a wide range of goods and services. Tariff and
Quotas long used to protect domestic industries from overseas, tariffs on imports were
once a standard, robust feature of trade policy, and generated much of the revenue. For
example in Malaysia by reducing trade barriers, TPPA will provide Malaysian-owned
businesses wider access to international markets and it will strengthen the countrys
economic growth. This agreement will provide local businesses with the first ever FreeTrade Agreements between Malaysian and the US, Canada, Mexico and Peru. Textiles,
apparel, commodities and the electronics industry will be benefit quickly in Malaysia.
TPPA also affect in the labor rules. The TPPA reduces hurdles for employees to work
temporarily at affiliate officers of their employer in other countries. This is aimed at ease
business travel. Officially known as intracompany transfers. TPPA make sure the
enforceable rules banning child labor and entrenching the rights of workers in member
countries to unionize.

The aim of TPPA is enhancing opportunities for service industries, which account
for most of the private jobs in the American economy. TPPA also want to increase the
market access for service providers. The deal guarantees foreign-owned service suppliers
can compete in the same markets as domestically-owned service suppliers. Although
services are not subject to tariffs, nationality requirements and restrictions on investing
are used by many developing countries to protect local businesses.
TPPA help small-and medium-sized companies expand their international business or
make the decision to go global in the first place. With special provisions for small and
medium-sized enterprises (SMEs), the trade deal will make it easier for companies to
participate in regional production and supply chains. The TPPA countries will set up
websites with information targeted specifically at SMEs and develop many programmers
for SMEs, to help companies take advantage of the provisions in the deal.

REFERENCES
Chia, Y.M. (2015), Benefits the trans-pasific will bring Singapore
Katharine Murphy (2015), Trans-Pacific Partnership: four key issues to watch out for
Kevin,G. (2015), The Trans-Pacific Partnership Trade deal explained.
Nanavati, S. (2015), Whats in it for Malaysia.
Phillip, C. (2016), What is TPP understanding the new pacific trade deal.
Shumei,L. , Amgad,S. (2015), TPP good for small business.