U.S. Trade Representative Releases Full Text Of Trans-Pacific Partnership

Ronald A. Oleynik is a Partner and Farid Hekmat an Associate in our Washington DC office.

HIGHLIGHTS:

As part of the notification process for the Trans-Pacific Partnership (TPP), the Office of the United States Trade Representative (USTR) recently released the full text of the TPP agreement, which is nearly 5,500 pages. Since the conclusion of negotiations on TPP, additional countries, including South Korea, Indonesia and the Philippines, have expressed interest on joining the agreement. Under the Trade Promotion Act, which provides the framework for congressional approval of trade agreements, the United States can formally enter TPP 90 days after the President provides Congress formal notice. Since that formal notice took place on Nov. 5, 2015, formal signing of TPP by all parties, including the U.S., can take place at the Asia-Pacific Economic Cooperation ministerial meeting, which will be held in New Zealand on Feb. 4, 2016. The Obama Administration formally notified Congress on Nov. 5, 2015, of its intent to sign the Trans-Pacific Partnership (TPP), a significant free trade agreement involving some of the U.S.' largest economic partners, including Canada, Mexico, Japan, and Australia (see Holland & Knight's alert, " Trans-Pacific Partnership Has Challenges, Opportunities for U.S. Companies," Oct. 26, 2015). As part of the notification process, the Office of the United States Trade Representative (USTR) recently released the full text of the TPP agreement, which is nearly 5,500 pages. In addition to reducing tariffs on a wide range of goods, TPP is a significant step in promoting cross-border investment and liberalizing trade in services. Below, we provide commentary and analysis on a few of the agreement's key issues.

Scope of Protection for Investments

A prominent issue during negotiations was the scope of protection that TPP would provide to foreign investments. The ability of foreign investors to use (and potentially abuse) arbitration, especially regarding regulatory disputes with the host country, provided fodder to opponents of TPP and similar agreements. The essential principles are "national treatment" (also termed "non-discrimination") and "minimum standard of treatment."

TPP Article 9.4 requires that each party accord to investors and investments from another party "treatment no less favorable than that it accords, in like circumstances" to investors and investments of its own nationals. This language is identical to language...