A new Free Trade Agreement is announced!

By Margaret Bux
clock 4 min

Trans Pacific Partnership

Negotiations concluded on the 5th of October for the Trans Pacific Partnership (TPP), which will be the world’s largest free trade agreement (FTA) covering 40% of global GDP.  It involves 12 Pacific Rim countries, namely, Australia, the US, Japan, Canada, Malaysia, Mexico, Vietnam, New Zealand, Chile, Peru, Singapore and Brunei.

It actually builds from the Trans-Pacific Strategic Economic Partnership Agreement (P4) between Brunei, Chile, New Zealand and Singapore which entered into force in 2006.

Trade topics addressed by the new TPP include trade in goods, services, investment, Government procurement, intellectual property, environmental laws, labor laws and intellectual property.  The TPP commenced negotiations in 2010 in Melbourne.  Being a participant in TPP negotiations since the onset has enabled Australia to seize a strategic opportunity to shape the rules that will govern trade in the region.

Signifcance for Australian Trade

Full details of the TPP are yet to be released, however the following is relevant for Australian trade:

  • This will be the first significant FTA with Canada, Mexico and Peru (however, this is less than 2% of Australia’s trade)
  • Agricultural access to the US and Japan is likely to be improved beyond our existing FTAs;
  • Origin will be based on TPP regional content.  As such, goods can include content from multiple TPP partners and still qualify for preferential treatment.  This could be important for goods of US or Japanese origin that undergo some further process (such as repacking) in Singapore or Malaysia;
  • Certificate of origin details are yet to be released.  However, it is unlikely formal certificates of origin will be required.  Both the US and NZ do not traditionally require such documents and other TPP countries have shown a preference for self-certification;
  • In recent presentations, DFAT suggested that change in tariff classification will be the primary rule of origin for goods that are not wholly originating;
  • The TPP is drafted in a way to allow inclusion of other countries in the future.   Korea, Thailand, Indonesia and the Philippines have all expressed interest in joining the TPP.  It is not unrealistic to foresee a future where the TPP will be the primary trade agreement governing Asia Pacific trade.


Timeframe for Implementation

Implementation of FTA’s generally take up to 12 months after the conclusion of negotiations, however given this FTA needs to pass through the U.S. parliamentary process in a US election year, it is expected that commencement in 2017 would be a more realistic date.

In the meantime, Clarke Global Logistics will endeavor to keep you informed of any new information and detail that is released.  We also advise relevant parties or those that may be affected to keep the TPP in mind when making long term trade decisions.  If you have any questions about how your imports or exports are affected, please feel free to contact the team at Clarke Global on 9854 3000 or email

Also, the Department of Foreign Affairs and Trade has an overview of the TPP on their website that provides more detailed information.

Photo by timsackton cc


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