The Trans-Pacific Partnership is a groundbreaking achievement and is the most modern, ambitious and economically significant trade agreement the US has ever negotiated. The TPP covers a market of over 800 million people, 40% of global GDP and almost 30% of global trade – and it’s remarkable for a host of reasons.
It will eliminate 18,000 duties, including all duties on manufactured goods. This will create thousands of new and improved export opportunities for our customers and more business for FedEx. Lower duties on imports also helps U.S. consumers and businesses through greater choice and lower prices. Remember that, on average, exports contain 40% imported content – this reflects the reality of the modern global supply chains where things are “made in” many different countries. So reducing tariffs on imported parts and materials will actually help make U.S. exports more competitive.
This is important because the TPP includes Japan, which is one of the top export destinations for American products, as well as rapidly growing economies like Malaysia and Vietnam, whose growing middle classes will be buying more US consumer and capital goods for years to come. These markets represent real growth opportunities for American companies.
The TPP will mean faster, more reliable and more transparent customs clearance. One example – the agreement requires the release of express shipments within 6 hours of arrival. Streamlining customs clearance will help our customers, especially small businesses, get their goods into their consumers’ hands faster, helping them become even more competitive.
The TPP expands opportunities for services suppliers, like FedEx, to operate overseas and has new provisions that will help ensure TPP supply chains operate efficiently. This is something that FedEx supported from the beginning of the negotiations.
For the first time, an entire chapter of the agreement is devoted to helping small and medium sized businesses take advantage of the TPP. It is a recognition of the vital role that small businesses can and should play in international trade.
The TPP also brings trade and investment into the modern, digital age. The TPP is the first agreement to seriously protect an open internet and to ensure the free movement of data across borders, which is important for every business in today’s global economy, and is especially critical to the continued growth of global e-commerce.
Finally, the TPP can become the primary platform for deeper and broader economic integration and trade liberalization in the high-growth Asia-Pacific region. Already, countries like the Philippines, Indonesia and Thailand have expressed interest in joining TPP. As more countries join the TPP the economic impacts will continue to multiply.
For all of these reasons FedEx strongly supports the TPP and we look forward to its passage in 2016. We will be working with Congress, the Administration, other companies and stakeholders to explain the benefits of the TPP and move the agreement to a vote this year. With continued weak economic growth, we need TPP now more than ever.