Finally, after many years of negotiations, the 12 countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam) making up the Trans-Pacific Partnership (TPP) have finally reached a comprehensive new trade agreement. We're still a long ways away from a final sign-off - the President needs to give Congress a 90 day advanced noticed that he intends to sign it and then Congress needs to pass it, which given the current political environment in Washington will be tenuous.
There are the obvious geopolitical reasons for doing this, particularly the need to establish a strong foothold in Asia to combat China's growth. And of course this agreement is not perfect. No agreement is. There needs to be more specifics. Some of the provisions are too general and seem easy to defy. Bernie Sanders and Donald Trump say it's a bad deal for American workers, who are apt to lose jobs to workers in other countries where producing goods is easier and cheaper. Some of the new rules and regulations may be detrimental to companies in certain industries. You can argue that giving a tiny country like Brunei the same rights and access to U.S. markets as Japan is questionable. And what about currency manipulation?
But there's some really good stuff in this agreement, particularly if you're a business owner looking to profit in Asia. I'm leaving some things out, but here are a few provisions, courtesy of the U.S. Trade Representative's press release, that caught my eye.
It's a tax cut for American products...your products.
The deal reduces tariffs. There is an agreement to no longer use performance requirements, which are conditions such as local production requirements that some countries impose on companies in order for them to obtain tariff benefits. There is an agreement not to impose World Trade Organization -inconsistent import and export restrictions and duties, including on remanufactured goods - which will promote recycling of parts into new products. If you're in the textiles business, there are now specific rules of origin that require use of yarns and fabrics from the TPP region, which will promote regional supply chains and investment in this sector, with a "short supply list" mechanism that allows use of certain yarns and fabrics not widely available in the region.
Shipping will be easier.
Due to the importance of express shipping to business sectors including small and medium-sized companies, the TPP countries have agreed to provide expedited customs procedures for express shipments and consistent technical regulations.
Regulatory compliance will be clearer.
The partners have agreed on transparent, non-discriminatory rules for developing technical regulations and standards and conformity assessment procedures. If you're in the business of selling cosmetics, medical devices, pharmaceuticals, information and communications technology, wine and distilled spirits, prepackaged foods, food additives or organic agricultural products you'll have better and more transparent regulatory guidelines that everyone will have to follow.
It's easier to invest in TPP countries.
Cross-border and investment market access opportunities are promised, along with non-discriminatory investment policies and protections that are required to assure basic rule of law protections (while protecting the ability of Parties' governments to achieve legitimate public policy objectives). There are provisions for the neutral and transparent international arbitration of investment disputes, with strong safeguards to prevent abusive and frivolous claims and ensure the right of governments to regulate in the public interest, including on health, safety, and environmental protection.
It's easier to sell financial services
If you're in the financial services industry you can sell certain products without being required to establish operations in the country.
It's easier to make short term visits.
The parties have agreed to provide information on applications for temporary entry, to ensure that application fees are reasonable, and to make decisions on applications and inform applicants of decisions as quickly as possible so that you and your team can make quicker, last minute visits if needed.
E-commerce companies have less restrictions.
All 12 parties agreed not to require that companies in their countries build data centers to store data as a condition for operating in their markets, and, in addition, that source code of software is not required to be transferred or accessed. The imposition of customs duties on electronic transmissions is prohibited and national producers and suppliers are no longer favored. Outright blocking of websites is prohibited. If you're a small business there is also a promise to help you take more advantage of electronic commerce in each country.
You can sell more stuff to the 11 other governments.
In the agreement, the parties committed to core disciplines of national treatment and non-discrimination and they also agreed to use fair and objective technical specifications, to award contracts based solely on the evaluation criteria specified in the notices and tender documentation, and to establish due process procedures to question or review complaints about an award.
Your intellectual property will be better protected.
In an issue particularly important for small businesses, it will be easier to search, register, and protect IP rights in these new markets. There will be better standards for patents and protections for trademarks like your brand name and signage. There's more help for pharmaceutical companies and creative artists. The parties have agreed to provide the legal means to prevent the misappropriation of trade secrets, and establish criminal procedures and penalties for trade secret theft, including by means of cyber-theft, and for cam-cording.
You're less exposed to public relations disaster.
Remember Apple and Nike's problems with the labor practices employed by their overseas partners? With this agreement, the parties are requiring companies to eliminate forced labor, abolish child labor and end discrimination in employment. They also agree to have laws governing minimum wages, hours of work, and occupational safety and health. The 12 parties also agreed to effectively enforce their environmental laws; and not to weaken environmental laws in order to encourage trade or investment and to protect the marine environment from ship pollution and to protect the ozone layer from ozone depleting substance.
There's specific support for small business.
Because the countries have a shared interest in promoting the participation of small and medium-sized enterprises in trade steps have promised to improve market access, reduce paperwork, provide internet access, facilitate trade and improve deliveries for smaller enterprises. The countries also promised to create more user-friendly websites targeted at small companies and to highlight provisions of importance to these organizations. In addition, a Small- and Medium-Sized Enterprises Committee will be established to make it easier for smaller companies to do business within the partnering countries.
A promise to reduce government corruption.
Yeah, we'll see about that.
There will be a clear process for disputes.
If two parties can't resolve an issue then it can be taken to panel made up of independent, international trade and subject matter experts subject to a code of conduct. The panel will present an initial report to the disputing Parties within 150 days after the last panelist is appointed with a final report 30 days later.
A version of this column previously appeared in Inc.com.