Meeting Document Summary Sheet

Document Title: Regional Economic Integration- Facilitating Trade Liberalization

Purpose: For information.

Issue: High level standards comparison of the TPP and the Pacific Alliance.

Background: ABAC Canada will be presenting on high quality standards in the TPP and the Pacific Alliance. The presentation is based on a report and collaboration with international trade researcher Mr. Juan Salvador Navarro, will be looking closely at the investor-state dispute settlement chapters, state-owned enterprises and intellectual property chapters. We will be looking at specific high quality standards from the TPP and the PA that could serve as models for future free trade agreements and for FTAAP. Mr. Navarro has vast experience conducting economic analysis, studies and research as an economist for 10 years at the Mexican Central Bank, as well as a university professor. During the past year, Mr. Navarro has focused his research on themes related to international trade and FTAs.

Proposal /Recommendations: For discussion and consideration.

Decision Points: For information.

Document: REIWG 36-061

Draft: FIRST

Date: 13 November 2016

Source: ABAC Canada

Meeting: Lima, Peru

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Document: REIWG 36-061

Draft: FIRST

Date: 13 November 2016

Source: ABAC Canada

Meeting: Lima, Peru

• Aims to remove barriers to investment, to liberalize trade, to eliminate or reduce tariffs and non-tariff barriers, and to go further in the establishment of trade rules and disciplines on a range of issues affecting global trade.

• TPP countries account for about 40 percent of the global GDP and 28 percent of world goods exports.

• It is estimated that TPP will eliminate about 18,000 tariffs.

• Platform for trade and economic integration with a clear interest to promote business in the Asia-Pacific region. The PA has introduced standards that go further than the free movement of people across borders, including elimination of visas.

• PA, as part of the Latin American and Caribbean (LAC) region, represents 52 percent of the total trade, 39 percent of the GDP and 45 percent of the Foreign Direct Investment (FDI).

• The PA has eliminated 92% of tariffs on products among PA nations.

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• What is ISDS?

• international arbitration procedure, a law-based approach to resolve conflicts that investors can use to challenge discriminatory decisions by the host country.

• National Treatment (NT): prohibits the discrimination of a foreign investment as

compared to a local investment.

• Most Favoured Nation (MFN): guarantees that a member country must be accorded the

same advantages as any other “most-favored” member by the granting country.

• Both agreements allow for public access to hearings and allow for the potential creation

of an appellate mechanism.

• Criminal penalties for trade secret theft.

• Clarifications regarding that IPR enforcement should include infringement in the digital space.

• TPP members cannot exclude State-Owned Enterprises (SOEs) from IP compliance rules.

• TPP negotiators agreed to include provisions about traditional and biologic medicines.

• No IP Chapter.

• Instead, PA nations established a work group – combining the four offices of intellectual property of nation members.

• plan and execute a strategy with joint and specific cooperation activities that strengthen IPRs protection. working in three specific areas: intellectual property, copyrights and transversal issues.

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• separate chapter about SOEs in this agreement.

• Some of these provisions include:

• requiring a list of SOEs to share with the other TPP Parties;

• providing reporting requirements to guarantee SOEs make purchases and sales in a commercial base;

• ensuring SOEs do not discriminate against the enterprises of other TPP nations.

• No separate SOE Chapter.

• Possibility of creating a work group that could regulate the space and create special activities, just as they did for IPRs.

• PA agreement allows them to make amendments and add new chapters, as long as they are agreed upon by the four nations, as they did on July 3, 2015, when they added a new chapter on regulatory improvement.

• TPP chapter on SOEs could serve as a good reference to this end.

• International trade system is at a very critical moment in which positions and definitions are crucial to support the recovery of the global economy and to boost business in local communities.

• TPP and PA: two excellent examples of nations trying to move forward in their goals of greater trade and economic integration. While they each take different approaches, they share similar objectives and elaborate high standards that are good for business.

• While the status of the TPP is uncertain at this point, the consensus of high standards that was negotiated amongst TPP countries is still an achievement.

• The TPP and PA should serve as examples for other FTAs currently being negotiated, which will ultimately build a better and more comprehensive FTAAP.

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