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TPP & Selected Aspects of the P4 Exchange

by Meredith Kolsky Lewis, Senior Lecturer, Faculty of Law, Victoria University of Wellington


The P4 Agreement has a number of unique and/or interesting provisions.  In general, the Agreement is notable for its avowedly strategic nature.  The member countries do not have significant economic synergies, nor are they an obvious geographical grouping.  While the Agreement is less driven by economic considerations than many other RTAs, it does have a clearly thought out strategic purpose.  The Agreement seeks to be a model for a broader Asia-Pacific agreement.  The fact that there will soon be negotiations to expand the P4 into a broader TPP that will include the United States, Australia, Peru and Vietnam is completely in keeping with the goals of the Agreement.  This document will highlight a few unique and/or otherwise interesting aspects of the P4 text, drawing comparisons with the existing FTAs of the current P4 members as well as the countries that will be involved in the initial TPP expansion.

 

Provisions of Note

 

1. Accession

 

The majority of RTAs currently in force worldwide do not provide explicitly for the possibility of other countries to join the Agreement in the future.  However, Article 20.6.1 of the P4 Agreement provides:

 

This Agreement is open to accession on terms to be agreed among the Parties, by any APEC Economy or other State.  The terms of such accession shall take into account the circumstances of that APEC Economy or other State, in particular with respect to timetables for liberalisation.

 

This “open accession” provision reflects the P4 parties’ strategic objective of the Agreement serving as a model for an expanded Asia-Pacific agreement.

 

While open accession provisions are not particularly common in RTAs, a number of the P4 partners have open accession provisions in one or more of their other agreements.  In particular, the AUSFTA (Article 23.1), Australia-Singapore FTA (Chapter 17, Art. 4), the Australia-Chile FTA (Article 23.2), the New Zealand-Singapore FTA (Article 79), the Peru-US FTA (Article 23.5), and the Singapore-US FTA (Article 21.6) all make provision for open accession.  CER (Article 24 – goods and Article 22 – services) refers to the potential “association” of other states with CER, so this also a form of open accession provision.[1]

 

In contrast, the Chile-US FTA and Vietnam-US agreement do not have provisions pertaining to the potential accession of other states.

 

The P4 provision makes reference to accession in particular by APEC Economies, though other states are also contemplated.  None of the other RTAs examined have a regional focus in the accession provision, with the exception of the Peru-US FTA which refers to the potential accession of “[a]ny country or group of countries including, in particular, Latin American countries”.

 

With respect to open accession provisions, Taiwan submitted a paper to the WTO Negotiating Group on Rules in 2005 in which it argued that GATT Article XXIV should be amended to require RTAs to provide accession clauses.  It argued that so doing would “expand the reach of RTAs and thereby promote broader, more inclusive and comprehensive trade liberalization.”[2]

 

Open accession provisions were also identified as one of the “APEC Best Practices for RTAs and FTAs” at APEC’s Annual Ministerial meeting held in Santiago, Chile in 2004.[3] In particular, the principle requires that APEC agreements be “open to the possibility of accession by third parties on negotiated terms and conditions”.  This principle is consistent with APEC’s broader policy of fostering open regionalism.

 

2. Focus on APEC/Preambular Language

 

The P4 Preamble mentions APEC or the Asia-Pacific region in four out of the 18 resolutions.  The US-Peru and US-Chile FTA preambles similarly mention the objectives of hemispheric integration and the objective of a Free Trade Area of the Americas (FTAA), and most of the other agreements mention APEC and its goals of free and open trade and investment.  Of interest is the fact that the AUSFTA does not make reference to APEC or the APEC goals, notwithstanding the fact that both Australia and the US are APEC members.

 

3. Subject matter coverage

 

The P4 subject matter coverage (at the chapter level) is somewhat different from other agreements.  For example, the P4 has a chapter on the Temporary Entry of People (chapter 13) which is essentially an immigration chapter and a chapter entitled Strategic Partnership (chapter 16).  In the interests of space these won’t be discussed in detail here, but may be interesting to discuss during the colloquium as these are relatively unusual provisions.

 

4. Exceptions Provisions

 

The P4 Exceptions chapter (chapter 19), provides that GATT Article XX is expressly incorporated into the Agreement, mutatis mutandis.  The exceptions apply to chapters 3-8, which are the chapters addressing Trade in Goods, Rules of origin, customs procedures, TBT, SPS, and Trade Remedies.

 

This coverage is interesting in a couple of respects.  First, none of the other FTAs examined extend their exception provisions to trade remedies.  It is not immediately clear in what way an Article XX exception would apply in the trade remedies context.  Trade remedies are always applied with respect to the products that have been found to cause injury (and to have been dumped if antidumping duties, or to have been subsidised, if countervailing duties) but not to all like products on an MFN basis.  Thus it is not clear why a party would consider it necessary to invoke an Article XX exception in the trade remedies context.

 

In addition, not all of the other agreements provide for their exceptions provisions to apply in the TBT and SPS contexts.  Such a provision exists in the AUSFTA, the Australia-Chile FTA, the US-Chile FTA, and the Peru-US FTA.  There is no similar provision in the Australia-Singapore FTA, ANZCERTA, the New Zealand-Singapore FTA, or the Vietnam-US Agreement.  The Singapore-US FTA applies the exception provisions to TBT measures but not to SPS measures.

 

Most scholars have argued that Article XX does not apply to the WTO covered agreements other than the GATT.[4] It therefore makes sense to expressly provide for application of Article XX to non-GATT measures such as TBT and SPS measures; however, it is unclear in practice how such an exception would be invoked, particularly as the SPS Agreement is effectively an elaboration upon GATT Article XX(b).

 

In addition to the general exceptions provisions, the P4 Agreement has an exception relating to taxation measures (Art. 19.4) which is similar to that found in other agreements, and an exception for New Zealand’s Treaty of Waitangi commitments (Art. 19.5) which is similar to Article 74 of the New Zealand-Singapore FTA (and to provisions in other more recently negotiated New Zealand agreements) but is in otherwise unique.

 

5. Committees on SPS and TBT matters

 

Lastly, I note that Article 7.4 provides for the creation of a committee on SPS matters and Article 18.11 for a similar committee for TBT issues.  The Peru-US and Chile-US FTAs also provide for the creation of both of these committees.  However, the AUSFTA appears to only provide for an SPS committee; the Australia-Chile FTA only provides for a TBT committee; and none of the other agreements provide for either type of committee.

 

It thus appears that the P4 contemplates a significant degree of coordination and cooperation amongst the member countries with respect to domestic health and safety regulatory practices.

 

 

 



[1] The North American Free Trade Agreement (NAFTA) also contains an accession clause (Article 2204).

[2] Submission on Regional Trade Agreements by the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, TN/RL/W/182 at I.7. (9 June 2005).

[3] It was noted at the Santiago meeting that open accession clauses were not at that time common in FTAs/RTAs within APEC.  See Main Characteristics of FTAs/RTAs Subscribed by APEC Economies: An Overview, Submitted by the SOM Chair at the APEC 2004 Economic Outlook International Symposium held in Santiago, Chile on 12-13 August, 2004.  Forum Doc. No: 2004/SOMII/FTAs-RTAs/003; 2004/AEOIS/015.

[4] See, e.g., Gabrielle Marceau and Joel P. Trachtman, The Technical Barriers to Trade Agreement, the Sanitary and Phytosanitary Measures Agreement, and the General Agreement on Tariffs and Trade: a Map of the World Trade Organization Law of Domestic Regulation of Goods,” 36 Journal of World Trade 811 (2002).

Last Updated on Tuesday, 16 March 2010 02:06
 

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