Trans-Pacific Partnership (TPP) Deal

Posted on October 30, 2015 by ATB Chartered Accountants

The Trans-Pacific Partnership (TPP) is an agreement between 12 countries, including Australia, US, New Zealand, Chile, and Japan. The TPP aims to resolve a number of common economic matters including promoting economic growth, reducing poverty, raising living standards enhancing innovation, productivity and competitiveness, and support job creation and retention.

Within the agreement is an agreement between the countries to cut all tariffs, and bring in common regulation authorities and external tribunals. In Australia, this particularly benefits service providers, as they make up 85% of all Australian workers, however only 20% of exports. As well as this, Australian miners will face less taxes when exporting goods which will help lessen the falls within the mining sector. It should also be noted that the Australian quota of sugar exports for the US is set to double, as well as a cut in tariffs for the agricultural industry, and increased market access in services including education and financial services is set to benefit the Australian economy.

After 7 years of negotiation, the agreement was reached in October, however, debate has risen recently over the environmental and healthcare factors included. Groups say that the promises made to them are not as strong as initially promised by governments. The most recent argument against the TPP is in relations to the environmental protection rules surrounding the agreement, with people arguing that it is likely to limit the ability of Australia to made additional steps in making sufficient cuts to greenhouse gas emissions, which may lead to governments being less driven to meet these environmental standards in favour of growing our economy.

Through combining different aspects of the environmental concerns, such as global climate change and economic growth, water use, energy use, transportation, land use and agricultural impacts, biodiversity and material flows, all which have a significant impact on the economy, it is possible to maintain and even improve the standards of living in Australia, as well as create economic opportunities. Given this, it should be a primary concern of the TPP and other trade agreements Australia plays a role in to hold a focus on environmental concerns if they hope to improve living standards of individuals as well as the economy as a whole.