IADB's Trans-Pacific programme fills up
Another six countries are negotiating membership into the Inter-American Development Bank’s (IADB’s) Trans-Pacific Partnership (TPP) to boost trade and investment between the US and Asia Pacific.
Australia, Malaysia, Peru, Japan, the US, Vietnam, Mexico, Colombia and Costa Rica are considering joining the TPP − a multilateral free trade agreement aimed at reducing tariff and non-tariff barriers to boost trade and investment.
It was originally formed by Chile, Brunei, New Zealand and Singapore in 2006.
US Commerce under secretary, Francisco Sánchez says that the framework for the TPP agreement “represents a landmark accomplishment”.
“It removes all tariff and non-tariff barriers to trade; it takes a regional approach to promote development of production and supply chains across the region; it eases regulatory red tape; it addresses the concerns of new industries, such as clean technology and the digital economy; and it is flexible enough that it can be tweaked in the future to address developments that may arise.”
Meanwhile, IADB held a meeting in Washington this week to discuss how the TPP membership can improve trade between the two regions.
IADB president Luis Alberto Moreno said: “If globalisation has taught us anything, it is surely that the benefits can only accrue if integration is embraced, if the world trading system is preserved and strengthened, and if appropriated flexible economic policies are pursued.”
Latin America and Asia are two regions that have weathered the international economic downturn fairly well, Moreno noted. Latin America and the Caribbean (LAC) averaged a 4.3% economic growth rate in 2011 and registered record levels of capital inflows of US$354bn.
If countries such as Mexico, Canada, Japan and Korea become members of the TPP, trade flows could sharply increase and Latin American companies would become more integrated into global manufacturing value chains, Moreno said.
Increased trade with Asia has reduced LAC’s vulnerability to the European and US economic slowdowns. In 1990, 60% of LAC’s trade was with the US and just 10% was with Asia; today, just 40% of LAC’s trade is with the US and 20% is with Asia.
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