Helping American Businesses Realize the Benefits of TPP
Stefan M. Selig is the Under Secretary of Commerce for
International Trade.
Today in New Zealand, the 12
Ministers representing Australia, Brunei Darussalam, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam signed
the Trans-Pacific Partnership Agreement. After more than five years of
negotiations that involved engagement from across Commerce, and in particular
ITA, we are all pleased to see all 12 TPP partners formalize the agreement.
The signing of the agreement
is an important milestone and underscores there is still a lot of work to be
done to ensure that the U.S. business community, in particular our small and
medium-sized businesses, are able to take full advantage of this agreement once
it is approved by Congress.
Working with partners across
USG, ITA is playing central role in the promotion, outreach, and the monitoring
of implementation and enforcement of the agreement. This work will
intensify as we move closer to the ratification and implementation of TPP in
the U.S. so that American businesses can fully realize the benefits of this
landmark trade agreement.
We will continue the outreach to workers, businesses, lawmakers,
and other stakeholders to explain the benefits of TPP. TPP will open access to
markets representing 40% of global GDP, commit partner markets to transparent
rulemaking to prevent the rise of burdensome regulations, is the largest
expansion of labor and environmental rights of any trade agreement in history,
and deepens the U.S. trade and investment ties among 11 Pacific Rim markets
where our exports already support more than 4 million American jobs.
We have produced reports outlining TPP created opportunities for 15 specific industry sectors;
such as auto products, consumer goods, information technology, and services.
And, we have also
produced 50 separate reports that lay out precisely how TPP will help
businesses and workers in every state. In particular, I want to highlight how
TPP will benefit four U.S. industries:
Health IT:
Between electronic health records, remote monitoring, and telemedicine, health
IT is clearly poised to be one of the key growth sectors for our economy. Once
TPP is enacted, 99.9% of U.S. health
products exports will enjoy duty-free access. TPP will also increase
intellectual property protections, which will enhance competitiveness and
incentivize greater innovation for U.S. firms. Increased deployment of health
IT exports will produce improved health outcomes and save lives every day
around the world.
Transportation
Equipment: 26% of U.S. transportation equipment exports
currently go to TPP countries. TPP will build on this strength by eliminating
tariffs on transportation exports, as well as streamlining customs requirements
and increasing trade facilitation. That is not only essential for the sale of
end products, but also for intermediate products within supply chains, like
aerospace parts exports for maintenance facilities. And, TPP will make U.S.
firms more competitive with Chinese counterparts, who currently enjoy lower
tariffs in some TPP markets.
Energy:
While this represents one of the critical growth sectors for U.S. firms,
without TPP, U.S. exports face tariffs as high as 30%. But because of
TPP, U.S. firms will see savings from eliminated tariffs worth $24 million.
More importantly, U.S. exporters will see improved access for this sector in
countries such as Japan, Vietnam, and Malysia. U.S. exports of renewable energy
equipment, such as wind turbines, currently face tariffs as high as 5% in new TPP
markets, but competing products from China face no such tariffs. Under TPP, all tariffs on U.S. exports of
renewable energy equipment will be duty-free immediately.
Automotive
Products: Prior to TPP, U.S. auto parts exporters faced
duties that added $22 million in costs every year, in part because of tariffs
as high as 50% in Malaysia and 75% in Vietnam. Once TPP is enacted, 98.2% of
U.S. auto products exports will be eligible for immediate duty free treatment.
And over time, all of the remaining tariffs will be removed.
You can find more information on the benefits of TPP, including our
state-by-state and sector-by-sector reports, by clicking here.
Educating all interested stakeholders is the best way to secure this crucial
part of the President’s trade agenda.
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