Can Australia Benefit From the Trans Pacific Agreement?

There are a lot of countries in the world and this is evident that they are to coexist with each other via building their international relations. In order to support these relations with the aim of mutual and many-sided benefits, there are different agreements signed between countries of the world. Trans- Pacific Partnership Agreement (TPP) was accepted by Brunei, Australia, Chile, Canada, Malaysia, Mexico, Japan, Peru, New Zealand, Singapore, Vietnam and the United States. This is a regional free trade agreement, which is supposed to lead to economic development of Australia via creating additional multiple work places. Potentially this agreement is also expected to open new market opportunities for exporters of Australian goods and services, at the same time involving new investors, which would also contribute to economic growth along with free trade agreements. All these new opportunities need without doubts corresponding well-organized transparent regulatory environment. “The TPP will also establish a more seamless trade and investment environment across 12 countries by setting commonly-agreed rules and promoting transparency of laws and regulations. The TPP will provide greater certainty for businesses, reduce costs and red tape and facilitate participation in regional supply chains.” (Schott, Kotschwar,  Muir, 2013, p. 13).

In the modern international business there are numerous challenges and obstacles, which need to be faced and overcome, thus TTP was created as a way of doing this with maximum advantage to all participants. “With trade agreements already in place between many of the potential TPP nations (NAFTA, for one, between the United States, Canada, and Mexico), the TPP hopes to expand trade agreements beyond simple “free” trade and expedite trade outside of the cumbersome consensus trade agreements already in place.” (Schott, Kotschwar,  Muir, 2013, p. 13). Thus the main purpose and aim of the Trans-Pacific Partnership Agreement is to create high standard rules for trade relations, open markets, be able to cope with actual global economy challenges, which would consequently lead to creating new job places, contribute to international and national economic growth in the Asia-Pacific region.

TPP is commented by most experts as the largest and the most serious deal since the World Trade Organization creation in 1995. “It represents the most important of the new generation of mega-regional economic integration agreements that have emerged as the counterpoint to the WTO’s faltering push for greater trade liberalization in recent years.” (Collins, 2015, p. 2). TPP is a free trade agreement, this means that there should be no barriers for trade in goods and provision of services between the countries, which have signed it. This is not related only to tariffs, but also to regulations of health and safety standards. TPP should also be seen as economic integration agreement, this means that such issues as protection of intellectual property, safeguards for investors from other countries and so on would be thoroughly considered. The approximate evaluation states that TPP should bring hundreds of billions of dollars in services and goods.

Talking about positive perspectives of TPP, it is necessary to mention the existing controversies, related to this agreement. One of the most often discussed controversies about TPP is its investor-state dispute settlement (ISDS). “ISDS allows multinational firms to bring legal claims directly against host states for things like expropriation, where the government takes an investor’s property, as well as other forms of unlawful discrimination. This system, which has existed for decades, is still hotly contested because it is perceived as an illegitimate way to sidestep local courts by using privately appointed international and confidential tribunals, which some view as an affront to sovereignty.” (Schott, Kotschwar,  Muir, 2013, p. 17).

There have been some relatively radical proposals made in this relation, for example to create a special court system, which would include the appointed judges and rights of appeal. All these features are not included into the TPP agreement in relation to ISDS. Some experts comment that most of the obligations and regulations, which are aimed at creating transparent and standardized environment, are in reality advantageous for developed countries, like for example Canada or America and would most luckily lead to reforms, which might have negative consequences for the countries like Malaysia and Vietnam.

During the negotiations stage, one of the main advantages of TPP was considered to be its potential effect upon labor rights, like for example increase of minimum wage and environmental issues, for example controlling of pollution. “The environmental features of the TPP are expected to combat trade in endangered species, a fantastic achievement for a treaty focused on economic benefits. Unfortunately, anticipated obligations to prevent currency manipulation, which had been extensively discussed, failed to materialize, leaving much of the work to control this harmful strategy up to the increasingly paralytic International Monetary Fund.” (Collins, 2015, p. 3).

Australia is one of the twelve counties, which agreed on the Trans-Pacific Partnership Agreement, which is predicted to be related to around 40% of the global economy and would take away up to 98% of agriculture exports tariffs in Australia. Trade Minister Andrew Robb is rather optimistic about the future benefits for this country, which should be achieved as the result of this agreement. Among them are creation of new work places, general higher living standards, increase of competitiveness and economic development. Farmers expect to get rid of the tariffs on dairy, beef, wine, sugar, rice and seafood. The minister commented that this agreement is not going to influence the economy of the country, but would contribute to its positive development. “While no details have been released about the agreement, causing some to question whether Mr Robb’s claims will be fully realized, James Brown, director of the Alliance 21 program at the United States Studies Centre at the University of Sydney, said he thought Mr Robb had achieved a very good result from Australia’s perspective.” (Collins, 2015, p. 3). The issues, related to tobacco companies, which were also seen as serious problems, should also be solved to the advantage of Australia. The above-mentioned Investor State Dispute Settlement (ISDS) is in reality one of the most controversial and complex issues of TPP and some experts were concerned that according to it, the existing companies would have the possibility to come out with their lawsuits against the government of the country, in case the legislations accepted would have impact upon their businesses, like it was the situation, when the North American Free Trade Agreement was signed. The response from Mr. Robb stated that there would be no possibilities for legal actions against government allowed, especially in the spheres of environment and health, thus tobacco companies would not get the chance to challenge the government of Australia.

It was already mentioned that according to the agreement Australia would be supposed to get wider access to international markets, namely those of the countries included into the TPP agreement. Theoretically this practice should have positive impact upon decrease of prices, which is a serious advantage for consumers, as Australian companies would also have the possibilities to sell their products cheaper. This would be done via reduction of the hidden costs of building business relations in Asia. Thus goods would be quicker transported and for lower prices, at least it is related to such goods as garments, electronics and textiles. Increase of productivity of the companies is also an expected outcome, still it needs time and there would be no immediate results. “Another indirect benefit will be the money it will bring into the Australian economy because services such as legal, accounting and engineering firms will find it easier to operate in the region. “Before, Australian engineers may have been wary about doing business for example, in Vietnam, but now it’s going to be easier because common standards will be put in place,” Mr Brown said.” (Collins, 2015, p. 5).

Separate issue for Australian farmers in relation to TPP agreement is the issue of sugar. All of the Australian farmers had the aim to get closer to the American markets and according to this new agreement they are supposed to have the chance to increase the amount of their exports at least doubling it. This issue used to be rather controversial and it almost made Australia refuse from this agreement negotiations, in case if the sugar markets question were not discussed. “The offer from the US is the largest made to any free trade agreement partner since NAFTA was signed into law in 1993. It gives Australia equal access with Brazil, which is the world’s largest sugar producer.” (Collins, 2015, p. 5). The current exports of sugar in Australia makes around 107.000 tones annually, the aim of the farmers is to increase it up to 700.000. The actual expectations from TPP make 240.000 tones.

The TPP agreement is seen as an important step in production of medicines and getting exclusive rights for production of drugs. There supposed to be no changes in the current laws of Australia and no increase of the price for medicine is expected. The weak point here is however the fact that it is not clear yet, how the whole system would operate in Australia. Separate issues are related to biological drugs, as they are produced from biological sources and could be vaccines, allergenics and other important medications.

The sphere of services is expected to benefit from TPP agreement as well. For example businessmen from Australia would get the possibility to ask for preferential temporary entry arrangements, along with automatic work rights for spouses in Canada and Mexico. The system of education would not stay aside and Australian universities would have the access to the markets in Brunei Darussalam, Malaysia, Japan, Mexico, Peru, Chile. Travel agencies and operators would get the increased possibilities to develop international and rural tourism. “Providers of mining equipment and technology will get new commercial opportunities, while transport providers will get strong trade and investment protections in Malaysia and Vietnam. There will also be greater certainty around access and operating conditions of health services in Malaysia, Mexico and Vietnam and benefits from the phasing out of foreign equity limits on Vietnam’s telecommunications sectorfive years after the TPP comes into force.” (Walker, 2015, p. 25).

Apart of particular spheres, which would be influences by TPP agreement, there is another factor, which contributed to duality of the views about its positive or negative impact upon Australia, the text of this agreement was not released for the public. The negotiations have been conducted by the 12 countries, but the agreement was not signed. “The agreement would also need to be passed through the parliamentary systems of each country, which could be problematic especially for US President Barack Obama who will have to sell the deal to a sceptical Congress, but Mr Robb told ABC he felt confident that it would be accepted.” (Walker, 2015, p. 28).

Overall, this is already evident that Trans-Pacific Partnership Agreement would have a great impact upon all the countries, which are going to sign it, in particular upon Australia; the main aim of this agreement is to boost the economic development via creating of free trade conditions and creating of additional work places. Still there are a lot of controversial issues, which are seen by the experts from different positions and it is not quite clear, whether all the expected benefits would be really achieved in practice by Australia.


“Australia and the Trans-Pacific Partnership: what we do and don’t know”. The Guardian. 6 October 2015

Collins, D. (2015). Transpacific Partnership will bring benefits to all

Fergusson, I.F.,  Vaughn, B. (2011). The Trans-Pacific Partnership Agreement – Congressional Research Service report for Congress.

Schott, J., Kotschwar, B., Muir, J. (2013). Understanding the Trans-Pacific Partnership. Peterson Institute for International Economics.

Walker, C. (2015). “Briefing on the TPP and Sustainable Development Goals | Friends of the Earth Australia”. Friends of the Earth Australia

The terms offer and acceptance. (2016, May 17). Retrieved from

[Accessed: October 27, 2021]

"The terms offer and acceptance.", 17 May 2016.

[Accessed: October 27, 2021] (2016) The terms offer and acceptance [Online].
Available at:

[Accessed: October 27, 2021]

"The terms offer and acceptance.", 17 May 2016

[Accessed: October 27, 2021]

"The terms offer and acceptance.", 17 May 2016

[Accessed: October 27, 2021]

"The terms offer and acceptance.", 17 May 2016

[Accessed: October 27, 2021]

"The terms offer and acceptance.", 17 May 2016

[Accessed: October 27, 2021]
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