The TPP’s Impact on Food and Agriculture

The Trans-Pacific Partnership (TPP) opens up numerous benefits for the food and agriculture sectors, including harmonised food standards and balanced and liberalised trade, says a panel of experts.

Speaking at a discussion organised as part of the launch of Food Industry Asia’s (FIA) first-ever Lunch Series on 24 February – in collaboration with The American Chamber of Commerce in Singapore (AmCham) – the expert panel of senior executives from industry and government, as well as experts on trade, sought to highlight the TPP's impact within the areas of food and agriculture.

The expert panellists included Mary Elizabeth Chelliah, Deputy Director of Goods & Standards, International Trade Cluster, Singapore’s Ministry of Trade and Industry (MTI), and the nation’s lead TPP negotiator on goods; Liam Jeory, Vice President of Corporate Relations, McDonald's Asia-Pacific, Middle East and Africa; Marcos Jank, Vice President of Corporate Affairs & Business Development, BRF Asia; Adrian Gasparian, Director of Commodity Distribution – Asia, ADM Asia-Pacific Trading; and Deborah Elms, founder and Executive Director of the Asian Trade Centre. The discussion was moderated by FIA Executive Director Matt Kovac.

The TPP is by far the largest regional free trade agreement (FTA) among 12 negotiating parties in Asia Pacific economies, namely: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The TPP was signed in New Zealand on 4 February this year, by all 12 member nations.

Following the signing ceremony, the next step is the ratification process, which could take as long as two years to complete or sooner depending on the major economies being able to navigate their own legislative processes, where at least six countries must approve the final text before it becomes legally binding. From signing to ratification, the TPP remains subject to political and legislative processes in each of the 12 economies. Some may even undergo political battles as opposing ideologies and competing visions of the future of the economies position themselves on either side.

Matt Kovac, Executive Director of FIA, said, “The TPP needs ongoing support from business leaders to help the public understand the benefits of economic integration and to encourage ratification.”

According to the Asian Trade Centre, the TPP promotes economic growth, eliminates tariffs on goods and services, tears down a host of non-tariff barriers and harmonises all sorts of regulations in a region accounting for 800 million people, 36% of the world’s GDP and a quarter of the world’s trade. Consequently, the TPP will help integrate Asia-Pacific markets by opening up goods and services, protecting investments and intellectual property rights, and promoting fair competition.
The TPP, which has the potential to bring in more member countries from across the Asian Pacific region into a single agreement in the future, may generate $285 billion in economic benefits for its members, and increase exports by $440 billion by 2025 (Peterson Institute, 2012).

“While many TPP members already have existing trade arrangements in place with other participating countries, this new agreement is significant as it upgrades these existing arrangements, creates new FTAs and helps establish new opportunities, including the creation of deeper supply chain connectivity between Asia and the Americas,” said Deborah Elms, Executive Director of the Asian Trade Centre, in her introduction to the panel discussion.

The panellists stressed how the TPP would eliminate thousands of import tariffs, as well as other barriers to trade and investment. Additionally, the TPP could serve as a model for a future trade pact among APEC members and eventually, other countries; it has the potential to harmonise existing agreements, attract new participants and establish regional rules on new policy issues facing the global economy.

According to text from the agreement, the TPP contains key provisions that remain relevant and will impact food safety and quality, through the setting up of a committee to deal with food safety issues, which could also serve as a platform to develop a common agenda with international organisations.

One of the TPP’s 30 legal chapters covers sanitary and phytosanitary (SPS) measures. The TPP’s SPS rules are science-based, transparent and non-discriminatory, in order to protect human, animal and plant life – a major aspect in ensuring that food is safe for consumption. According to the Office of the United States Trade Representative (USTR), the TPP builds on World Trade Organization (WTO) SPS rules for identifying and managing risks in a manner that is no more trade-restrictive than necessary; the FIA Lunch Series panellists concurred, opining that the TPP’s SPS measures provide more clarity for, and ease of, trading of food products.

The panellists also delved into how the TPP promotes regulatory coherence – ensuring an open and fair regulatory environment by encouraging transparency and internationally accepted regulatory practices. They discussed the TPP’s encouragement of common technical regulations, standards and approaches across the region that do not create unnecessary barriers to trade, in sectors such as proprietary formulas for prepackaged foods and food additives; and its allowance for liberalised trade in services across borders, allowing for a better balance of imports and exports among TPP member countries.

FIA Lunch Series

Food Industry Asia (FIA) is delighted to launch the “FIA Lunch Series”, which will feature speakers and panels on topics that are relevant to FIA’s priorities, and offer members opportunities to engage with these experts. The next FIA Lunch Series event will take place on 16 March 2016, at which global market intelligence agency Mintel will present the year’s top food and drink trends for the Asia Pacific region.

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