The NAFTA of the Pacific

At the November 12, 2011 Asia-Pacific Economic Cooperation (APEC) summit in Hawaii, both Canada and Mexico – signatories to the North American Free Trade Agreement (NAFTA) – announced their intention to join fellow NAFTA member, the United States, along with other non-member countries, in establishing the so-called “NAFTA of the Pacific”.

Representatives from the nine countries that comprise this new Trans-Pacific Partnership (TPP), which include the United States, Australia, New Zealand, Malaysia, Vietnam, Singapore, Brunei, Peru and Chile, met at the APEC summit to establish the terms of a free trade agreement. The formation of the TPP is considered a landmark, setting into place various innovative standards that will govern the future course of global trade. In sum, the TPP would provide comprehensive market access to its participants, and facilitate the development of more efficient production and supply chains among its members.

Significantly, Japan – the world’s third largest economy behind China and the United States – has also expressed interest in being part of the TPP. Membership to this new trade bloc is also open to any other country that wishes to contribute to the development of an Asia-Pacific free trade zone. Japan’s desire to participate in the TPP has enlivened other countries that are already part of the trade agreement. U.S. Trade Representative Ron Kirk, for example, has stated that Japan’s interest in being part of the TPP is evidence of a much greater, collective desire to achieve economic integration in the Pacific Rim.

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Published In: International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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