Negotiations are continuing on the U.S. Trans-Pacific Partnership (TPP), which aims to broaden trade between the United States and 11 other countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Arizona trade with TPP countries — exports and imports — supported nearly 278,000 jobs in 2011. Notwithstanding controversy over issues and secrecy that has plagued the negotiations since they began in 2010, the aim of improving international trade has kept the players at the table. Expanding economic ties with TPP countries is predicted to help support our state’s economic growth and jobs, according to a fact sheet recently prepared by Business Roundtable (BRT), an association of chief executive officers of leading U.S. companies with $7.4 trillion in annual revenues.
“The 11 other TPP countries represent critical markets for U.S. goods and services exports, accounting for a combined population of 482 million people and representing roughly 15 percent of global trade,” says John Engler, president of BRT, whose member companies, which comprise more than a third of the total value of the U.S. stock market and invest $158 billion annually in research and development — equal to 62 percent of U.S. private R&D spending — generate more than $540 billion in sales for small and medium-sized businesses annually. “The TPP holds significant potential to create new opportunities for Arizona, all 50 states, and the overall U.S. economy to benefit from increased commercial engagement with these countries.”
According to the BRT, an estimated 277 Arizona businesses are subsidiaries of companies based in TPP countries. The goal of the TPP is to remove barriers and strengthen partnerships, and Arizona could see further investment by companies based in TPP countries. Arizona’s positive trade experience, to date, includes the following:
- Fifty-eight percent of Arizona goods exports went to TPP countries in 2012.
- Arizona exported about $8.9 billion worth of goods to the six TPP countries that are current bilateral U.S. free trade agreement (FTA) partners — Australia, Canada, Chile, Mexico, Peru and Singapore — in 2012, accounting for roughly 50 percent of Arizona’s goods exports globally.
- Arizona exported about $2.0 billion worth of services to the six current U.S. FTA partner countries in 2011 — accounting for roughly 19 percent of Arizona’s services exports globally.
- The TPP will open new markets for Arizona with five countries that are not current U.S. FTA partners — Brunei, Japan, Malaysia, New Zealand and Vietnam. Arizona exported $1.4 billion in goods in 2012 and $952 million in services in 2011 to these “new FTA” TPP countries.
Nationwide, more than one in five jobs are supported by trade, both export and import. Since 2004, U.S. exports have grown faster than overall U.S. GDP and now account for nearly 14 percent of U.S. GDP. Including international trade and investment, more than 30 percent of U.S. GDP is tied to international trade.
Arizona Goods & Services Exports to TPP Countries, 2011