Government Business Relations - Trans-Pacific Partnership - Case Study Example

TRANS PACIFIC PARTNERSHIP Student name Institution Date Trade is one of the most important contributors to the national gross domestic capital of any given country. Currently, many nations in the world have entered into free trade agreements to facilitate the exchange of goods and services across the borders through removal of tariffs and taxes imposed on imported goods. A free trade agreement is an accord reached between two or more countries to enhance trade through removal of barriers such as tariffs and import quotas (In Voon, 2014). Today many countries have come together with the ultimate aim of improving the economic policies of the member countries and improving on labour and environmental policies. Trade agreements also help investors and exporters in accessing the foreign markets and maintaining the existing links, thus improving the efficiency of international trade. One such example of a free trade agreement is the Trans-Pacific Partnership agreement that brings together twelve countries in the Pacific region to promote smooth trade through the removal of tariffs and import quotas (Petri et al, 2012). Some of the countries that have been involved in the five year negotiation of the agreement are; Canada, the United States, Peru, Chile, Japan, New Zealand among others. The negotiations were concluded and a consensus reached in early October 2015. The agreement also focuses on the economic policies, environmental and labour laws within the member countries. This paper explores expected industrial policy measures to be taken by Australia for the implementation of the Trans-Pacific Partnership agreement. The emergence of the Trans- Pacific Partnership agreement resulted from the completion of an agreement between Brunei, Singapore, Chile and New Zealand, which aimed at attracting new Asia pacific members. The United States joined the partnership in 2008, followed by Australia, Peru and Vietnam, leading to the need for an expanded trade agreement which began in 2010. Other countries such as Japan, Malaysia and Mexico joined the agreement later on after negotiations began. The agreement, which is considered as one of the greatest in the 21st century is expected to address among other issues the changes that have occurred in trading systems over the last centuries (Lim et al, 2012). One such issue is the environmental aspect of trade which require that the exchange of goods and services should be sustainable and promote environmental well-being. Other issues that the agreement is expected to address upon implementation in the member countries are technological advancements such as the role of internet in trade and the increased recognition of the service sector as an important part of trade. The Trans-Pacific Partnership has many potential benefits to the member countries. First, the agreement is expected to increase connectivity and hence enhance trade between the Pacific trade blocs. Through the agreement, the member states will be able to build trust with each other hence facilitating the exchange of goods and services. The removal of trade barriers such as tariffs and import quotas will also help in ensuring that the exporters in the member countries have the ability to operate and increase their competitive advantage even in foreign markets. The agreement is also expected improve the economies of member countries by improving the living conditions of the people through acquisition of goods at relatively lower costs. The Trans Pacific Partnership agreement is not overly beneficial but exhibits potential harm to the member countries when implemented. Some of the criticisms to the agreement have arisen from the secrecy of the whole process of negotiations since its implementation. The most important step in the negotiation of any agreement is the participation of the stakeholders through submission of views regarding the agreement. The TPP negotiation process has, however, been carried out secretly, locking out potential stakeholders. Making the agreement to sound foul. The requirement by the Australian government to expand the foreign market niche for its products is one of the major reasons of joining the TPP. The Australian government, according to its trade minister, sees the agreement as a channel to increase connectivity with the markets within the region, increasing competition and creation of new jobs for the Australian population. The agreement is also expected to increase benefits to consumers through reduced cost of goods and services and increase the chances of two way investments. For the efficient implementation of the Trans-Pacific Partnership, the Australian government has the mandate to set up new policies to enable the agreement to be fully incorporated in its economic sectors. Since the agreement also has guidelines, there is the need for the Australian government to put in policies that conform to the Trans-Pacific Partnership agreement to enhance its proper implementation within the country. One of the industry policies that is expected to be seen in the wake of implementation of the TPP in Australia is the competition policy. The removal of trade barriers by the partnering countries does not deter competition between the member countries. Removal of tariffs and import quotas on goods is expected to increase the expansion of foreign industries enabling them to hire more workers. This will cause the local Australian industries to be incompetent and reduce workers through layoffs, making them to outsource jobs and transfer labour to other countries. To counter such an imperfect competition, the Australian competition policy will have to be adjusted to promote the local industries through subsidies. Another anticipated policy in Australia for the proper implementation of the TPP is, Australian government, provide subsidies to the local industries to deter competition from foreign companies. However, the TPP, like any other free trade agreement, requires that such subsidies also be removed to facilitate free and fair trade within the member countries. Through this policy, .the fund that the government puts into subsidizing the local industries can be put into other beneficial uses hence promoting economic growth. Australia is also expected to introduce the foreign investment policy as a means of implementing the Trans-Pacific Partnership agreement. Since the agreement expects that the member states open their boundaries for trade, Australia, being one of them, is anticipated to put in place a policy that promotes direct foreign investment in the country, through removal of restrictions to investors within the Pacific Rim. This way, the country is expected to benefit through the direct investments which will increase capital for the expansion of the local businesses and industries (Corones, 2014). For Australia to properly implement the TPP, there is the need for the country to put in place a policy for the punishment of the breaches of copyright laws. This will force the country to the copyright provisions, which were initially subject to civil penalties to criminal offences. One of the requirements of the TPP is that the access of knowledge should be restricted, financial risks should be placed on people acquiring and using new knowledge. For Australia to implement the TPP, there is the requirement that the copyright laws in the country be tightened to conform to the requirements of the agreement, which Australia is part. These restrictions are argued to be useful in creation of new innovations Implementation of the TPP in Australia will also require that policies are put in place that deter the provision of adequate information regarding the products that are trade. According to the Australian standards regarding the safety and labelling of food products, there is the need to check the safety of products in the market (Australian Institute of Health and Welfare, 2012). However, the TPP, which Australia is among the signatories, puts no emphasis on the need for the trading countries to provide information about the products they export such as the origin of the food product and whether or not it is genetically modified. This way the policy will restrict the ability of the Australian government to control the quality of products entering the local market and can have adverse health impacts on the Australian population. Another anticipated policy that the Australian government may introduce to properly implement the TPP in the country is the removal of plain packaging on items such as tobacco as a move to protect trade between the country and other member states of the agreement. For instance, currently in Australia, the plain packaging of tobacco and other tobacco products has been made a law to reduce health related problems resulting its use among the Australian population. According to the TPP investor state dispute settlement clause, the foreign companies are allowed to sue governments in the investor countries for the loss of profits. The Australian government will, therefore, have to change its packaging policies to ensure that it does not go through legal processes as in the case of Phillip Morris Company (Chapman and Freeman, 2014). The implementation of the TPP in Australia will require even tighter policies for the protection if the intellectual capital within the country. Although the Australian laws provide protection for the intellectual capital such as personal property and intangible assets such as inventions, artistic work and designs, there is the need for these laws to be tightened enough to prevent the undesirable exchange and poaching of the ideas and inventions from the Australian businesses by other international companies that are set to operate within the country following the agreement (Van, 2010). The implementation of the TPP in Australia will also require that the Australian government introduces a stricter environmental policy to ensure strict adherence to the environmental laws by the member states. The TPP, like any other free trade agreement, can lead into improper environmental practises since conformity with environmental regulations will not reflect in the prices of the goods. The TPP also does not give provisions for the member states to query the origin of goods hence unsustainable environmental practises. Putting in place strict environmental policies and sanctions for offenders can help the country to remain a sustainable business hub. Although the TPP is the greatest trade agreement of the century with potential benefits for the member countries, the Australian case is different. Many of the provisions that are found within the TPP are not in line with the Australian laws and this may force the country to twist its policies to match the requirements of the agreement, however, some of the policies that are anticipated may have detrimental effects on the country’s economy and healt, and there is the need for proper consultations and tough decisions to be made before implementing the TPP in Australia. References Albert, J. (2010). Innovations in food labelling. Rome: Food and Agriculture Organization of the United Nations. Australian Institute of Health and Welfare. (2012). Australia's food & nutrition 2012. Canberra: Australian Institute of Health and Welfare. Chapman, S., & Freeman, B. (2014). Removing the emperor's clothes: Australia and tobacco plain packaging. Corones, S. G. (2014). Competition law in Australia. Pyrmont: Thomson Reuters Australia, Limited. In Voon, T. (2014). Trade liberalisation and international co-operation: A legal analysis of the Trans-Pacific Partnership Agreement. Lim, C. L., Elms, D. K., & Low, P. (2012). The Trans-Pacific Partnership: A quest for a twenty-first century trade agreement. Cambridge: Cambridge University Press. Petri, P. A., Plummer, M. G., & Zhai, F. (2012). The Trans-Pacific Partnership and Asia-Pacific integration: A quantitative assessment. Washington, DC: Peterson Institute for International Economics. Schott, J. J., Kotschwar, B., & Muir, J. (2012). Understanding the Trans-Pacific Partnership. Sterling, J. A. L., & Hart, G. E. (1981). Copyright law in Australia and the rights of performers, authors, and composers in the Pacific region. Van, C. W. (2010). Intellectual property law in Australia. Alphen aan den Rijn: Kluwer Law International. Read More