APCAC Urges Congress to Pass TPP

APCAC de­liv­ered a let­ter to Congress re­quest­ing ur­gent ac­tion on the Trans- Pa­cific Part­ner­ship be­fore the end of the year. Signed by 25 Am­chams in Asia- Pa­cific, the let­ter is an un­prece­dented dis­play of unity and ur­gency from APCAC mem­bers whose col­lect

Thai-American Business (T-AB) Magazine - - Contents -

Dear Mem­bers of Congress:

The Amer­i­can Cham­bers of Com­merce in the Asia- Pa­cific Re­gion, with more than 15,000 U. S. com­pa­nies as mem­bers, ex­press our united un­equiv­o­cal sup­port for the Trans- Pa­cific Part­ner­ship ( TPP) and strongly urge mem­bers of Congress to rat­ify the agree­ment be­fore the end of 2016. U. S. com­pa­nies and their em­ploy­ees have $ 620 bil­lion of in­vest­ments in the re­gion and are well po­si­tioned to har­ness the eco­nomic growth in the re­gion for the ben­e­fit of the U. S. econ­omy. The con­se­quences of failing to rat­ify the TPP this year will be detri­men­tal to our na­tion’s short­and long- term eco­nomic and na­tional se­cu­rity in­ter­ests. We stress the im­por­tance of seiz­ing the small win­dow of op­por­tu­nity we now have to ce­ment the United States’ lead­er­ship in the fastest grow­ing re­gion of the world and boost eco­nomic ac­tiv­ity both at home and abroad.

Two- thirds of the global mid­dle class, rep­re­sent­ing 59 per­cent of global mid­dle class con­sump­tion, will re­side in the Asi­aPa­cific by 2030. The rapid emer­gence of this mid­dle class will bring far- reach­ing eco­nomic change, cre­at­ing new mar­ket op­por­tu­ni­ties for do­mes­tic and in­ter­na­tional com­pa­nies. With U. S. GDP pre­dicted to grow no more than two per­cent for the fore­see­able fu­ture, the TPP is a unique and im­me­di­ate op­por­tu­nity to ac­cel­er­ate the U. S. econ­omy by al­low­ing U. S. businesses of all sizes to ex­pand ex­port mar­kets to reach this bur­geon­ing mid­dle class. This will not only stim­u­late eco­nomic growth but will also cre­ate good pay­ing Amer­i­can jobs in ev­ery district through­out the coun­try.

Today, U. S. com­pa­nies are com­pet­ing against for­mi­da­ble Asian and Euro­pean multi­na­tion­als, with deep, his­tor­i­cal links through­out the economies, re­in­forced by strong gov­ern­ment- to­gov­ern­ment bi­lat­eral ties. While U. S. com­pa­nies of­fer high qual­ity goods, ser­vices, en­vi­ron­men­tal and work­force pro­tec­tions, and best prac­tices in­clud­ing in­tel­lec­tual prop­erty pro­tec­tions, our suc­cess can be lim­ited by com­mer­cial re­al­i­ties on the ground. The TPP is a sig­nif­i­cant and mean­ing­ful step in the right di­rec­tion in ad­dress­ing many of th­ese re­al­i­ties, which in­clude:

1. Mod­est Share in Asian Mar­kets and Sup­ply Chains: Asian con­sumers are so­phis­ti­cated and savvy buy­ers with some of the world’s high­est dis­pos­able in­comes. While Amer­i­can goods and ser­vices have strong brands, Asian con­sumers are ac­cus­tomed to buy­ing in­stead from lo­cal and re­gional businesses and providers. Th­ese con­sumers are also us­ing lo­cal banks, insurance, tele­com, de­liv­ery, dis­tri­bu­tion, and pro­fes­sional ser­vices, and grav­i­tat­ing to­wards fast- emerg­ing lo­cal tech­no­log­i­cal cham­pi­ons and so­lu­tions providers. The strength of U. S. brands will not au­to­mat­i­cally trans­late into mar­ket share if we can­not break down coun­try tar­iffs to com­pete on a level play­ing field and re­duce the un­cer­tainty about the U. S. com­mit­ment to the re­gion. The TPP pro­vides the foundation from which U. S. com­pa­nies, rang­ing from SMES to large multi­na­tion­als, can more con­fi­dently in­vest in the re­gion, send­ing a strong sig­nal that the U. S. is com­mit­ted to com­pet­ing for mar­ket share. 2. Com­pet­i­tive Dis­ad­van­tage from Asia’s Free Trade Agree­ments ( FTAS): Amer­i­can goods and ser­vices are at a com­pet­i­tive dis­ad­van­tage against Asian goods and ser­vices due in part to the many ex­ist­ing and de­vel­op­ing free trade agree­ments ( FTAS) preva­lent through­out the re­gion. In many cases, th­ese FTAS of­fer un­fet­tered duty free ac­cess to prod­ucts and ser­vices from sig­na­tory coun­tries. Com­pound­ing the is­sue, ev­ery year, U. S. multi­na­tion­als spend mil­lions of dol­lars nav­i­gat­ing the web of FTAS in the re­gion to find com­pet­i­tive sav­ings, a lux­ury that Amer­i­can small businesses cer­tainly can­not af­ford. The TPP sim­pli­fies this for U. S. com­pa­nies by al­low­ing our goods to qual­ify more eas­ily for pref­er­en­tial du­ties that oth­er­wise are not con­sis­tently avail­able due to place- of- ori­gin cri­te­ria and the sig­nif­i­cant pro­por­tion of U. S. value- add. We have a very small win­dow of op­por­tu­nity to get ahead of our com­peti­tors be­fore the con­clu­sion of the 16- mem­ber mega- FTA, the Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship ( RCEP) in the next one to two years. Com­bined with China’s ever- ex­pand­ing “One Belt, One Road’ ini­tia­tive, this will put us even fur­ther be­hind. 3. Pro­lif­er­a­tion of Bar­ri­ers Un­der­min­ing U. S. In­no­va­tions and Stan­dards: Through­out the Asia- Pa­cific, Amer­i­can com­pa­nies find them­selves com­ing up against poli­cies that in­hibit our abil­ity to in­no­vate, ap­ply in­de­pen­dently de­vel­oped stan­dards, and freely de­cide where and in what form of es­tab­lish­ment we would like to op­er­ate. Th­ese range from tra­di­tional mar­ket ac­cess bar­ri­ers to U. S. goods and ser­vices to other im­ped­i­ments unique to the dig­i­tal era. Most promi­nently, th­ese in­clude bar­ri­ers im­ped­ing cross- bor­der e- Com­merce ship­ments, lo­cal­iza­tion of data cen­ters, and dis­crim­i­na­tion of epay­ment sys­tems. The TPP is our only bind­ing plat­form for guar­an­tee­ing that U. S. in­no­va­tion con­tin­ues to flour­ish and that new stan­dards or rules are not set by a lim­ited group of dom­i­nant Asian play­ers in the re­gion. In the void of Amer­i­can lead­er­ship on such crit­i­cal pol­icy ar­eas, we risk one day find­ing that Asia has moved in a cer­tain di­rec­tion, closed- off to Amer­i­can com­pa­nies. 4. Lost Op­por­tu­nity in Emerg­ing Mar­kets: Asia’s emerg­ing mar­kets of­fer great op­por­tu­nity to U. S. com­pa­nies but con­tinue to present risks. Without com­pre­hen-

sive re­form, in­clud­ing ba­sic pro­tec­tions such as right of cap­i­tal trans­fers, fair com­pen­sa­tion in the event of ex­pro­pri­a­tion, and le­gal re­course through in­ter­na­tion­ally rec­og­nized ar­bi­tral pro­ceed­ings in the event of dis­putes, our in­vest­ments, as­sets, and in­tel­lec­tual prop­erty are vul­ner­a­ble. The TPP is al­ready driv­ing the much needed re­form in economies that oth­er­wise would not po­lit­i­cally be able to push them through. We are also ob­serv­ing strong in­ter­est from non-TPP economies to join this club, spurring pos­i­tive changes in the Philippines, Indonesia, Thai­land, Tai­wan, and China. 5. Lim­ited Op­por­tu­ni­ties to Shape Out­comes: U. S. com­pa­nies have ben­e­fit­ted greatly from our par­tic­i­pa­tion in U. S. gov­ern­ment- sup­ported ca­pac­ity build- ing of­fered to de­vel­op­ing economies in the re­gion. Viet­nam is a good ex­am­ple of how USAID- funded ca­pac­ity build­ing on WTO im­ple­men­ta­tion pro­vided over the years has pro­duced re­form and pos­i­tive out­comes in Cus­toms, In­tel­lec­tual Prop­erty, Ser­vices Reg­u­la­tion, Trans­parency, and Ju­di­cial Re­form. Without the TPP, we ex­pect such op­por­tu­ni­ties for this kind of en­gage­ment to be lim­ited, im­pact­ing our abil­ity to shape out­comes. Amer­ica’s en­gage­ment in the TPP will al­low us to con­tinue to be at- the- ta­ble and avail our­selves of this pow­er­ful tool.

Com­mer­cial and eco­nomic re­al­i­ties aside, we col­lec­tively can­not stress enough how im­por­tant the TPP is to main­tain­ing the lead­er­ship po­si­tion that the United States has built up over the decades in Asia. Op­er­at­ing on the front lines of U. S. com­mer­cial diplo­macy in the Asia- Pa­cific, we see first­hand the need for and im­pact of U. S. lead­er­ship in the re­gion. Not act­ing on the TPP and ce­ment­ing U. S. in­flu­ence in the Asia- Pa­cific for decades to come risks un­der­min­ing our in­flu­ence by cre­at­ing the per­cep­tion of the U. S. as an un­re­li­able trad­ing part­ner. Now more than ever, U. S. com­pa­nies and our em­ploy­ees need to have the United States Congress firmly be­hind us, fully en­gaged in the Asia Pa­cific re­gion, strength­en­ing U. S. pres­ence and co­op­er­a­tion in a con­crete, con­sis­tent, and mean­ing­ful man­ner. This is a win­dow of op­por­tu­nity that can­not be missed and we urge you to take ac­tion to make the Trans- Pa­cific Part­ner­ship a re­al­ity.

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