Why the TPP-11 can expand services trade and access to global value chains for Australian businesses

The Comprehensive and Progressive Agreement for Trans Pacific Partnership (TPP-11) has strong potential to enhance Australia’s competitive advantage and expand opportunities for business in global markets.

Asialink Business was pleased to provide a submission on the benefits of the Agreement to the Senate Foreign Affairs, Defence and Trade References Committee.

The submission outlined why the TPP-11 will make a valuable addition to Australia’s international trade architecture. It focused on:

  • growing trade in services
  • expanding access to global value chains
  • building an environment for success.

Level playing field

The submission underlined that:

“Australia's economic prosperity is inherently interlinked with the Asia-Pacific. The TPP-11 will open-up new market opportunities and help create a ‘level playing field,’ a common platform of rules across the eleven member countries.

It will complement Australia's successful negotiation of free trade agreements with our biggest north Asian trading partners, China, Japan and Korea.”

TPP-11 members already include several of Australia’s key trade partners in Asia, such as Japan, Malaysia, Singapore and Vietnam. Importantly, it is a platform that is open for other countries to join in the future if they meet high standards.

"The TPP-11 will open-up new market opportunities and help create a ‘level playing field,’ a common platform of rules across the eleven member countries."

Creating jobs through services trade & the knowledge economy

The outcomes of the TPP-11 for Australian exporters of services deserve strong recognition.

The TPP-11 will enhance the level of transparency and predictability for Australian service exporters and reduce some of the regulatory challenges Australian business face in the Asia-Pacific.

Demand in Asian economies for world class services is expanding exponentially.

Research undertaken by Asialink Business, with ANZ and PwC, in 2015 found that by 2030, services had the potential to become Australia's number one export to Asia in terms of total value added, in the process supporting one million Australian jobs.

However, jobs growth through enhanced services trade with Asia will not be automatic. Seizing the services opportunity requires dedicated strategy, commitment and coordination on behalf of the public and private sector.

Participating in global value chains

Global value chains are transforming trade and investment across the Indo-Pacific, by interlinking goods and service providers into dynamic international trading networks that are not bound by national borders.

By participating in GVCs, countries trade more than products - they trade know-how, innovation and expertise.

The TPP-11 will help integrate Australian businesses into regional and global economies and provide a platform of common rules. This will create multiple longer-term benefits for business, industry, exporters and consumers.

Establishing an environment for success

While the TPP-11 has strong potential to increase Australia’s trading advantage, expand market access, and create Australian jobs, businesses need a wide range of capabilities to succeed in competitive international markets.

Our submission recommends:

  • Considering how to effectively build in and integrate Asia capability training into domestic trade advocacy and efforts to promote utilization of the TPP, fostering wholistic understanding of the export journey.
  • Maximising the services outcomes of the TPP-11, for example, through market entry programs that educate Australian services firms on how to appropriately customise, position and price their offerings in the region, with a focus on TPP-11 markets
  • Maximising the global value chain outcomes of the TPP-11, for example through assistance for Australian businesses to identify, develop and tailor their niche area of specialty, to more actively participate in GVCs and enter new markets.

Read the full submission here.