A sluggish recovery from the financial crisis, the Chinese economic slowdown and other curve balls have been a drag on trade volumes in recent years. The recently concluded Trans Pacific Partnership (TPP) and the currently being negotiated Transatlantic Trade and Investment Partnership (T-TIP) could be just the shot in the arm global trade needs.
TPP- Trans Pacific Partnership
The U.S. recently concluded the final round of the TTP Trade Ministers in Atlanta, GA from September 30-Oct 2st which was preceded by a meeting of TPP Chief Negotiators. The 12 countries in the TPP discussions represent about 40 percent of the global economy further highlighting the importance and significance of the standards set by this agreement.
TTIP – Transatlantic Trade and Investment Partnership
TTIP is a very ambitious and is about half way negotiated. The trade agreement is between the United States and European Union across what would become the world’s largest free trade zone, accounting for 60 percent of global production
The TPP and TTIP are the next generation in terms of free trade agreement standards. They are less focused on trade barriers and have, instead, taken on more challenging issues such as intellectual property and labor. Services trade has also been a key element in the discussions. Services increasingly form a larger part of global GDP. A focus on Services and facilitating trade in that sector would go a long way towards increasing economic activity and incomes globally.
Free trade = new markets
Covering approximately 40 percent of the world’s economy the Trans-Pacific Partnership (TPP) is the largest free trade deal since the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico came into force in 1994.
Free trade agreements (FTA) have been a positive force for economic development. U.S. trade growth with its FTA partners is increasing at a faster pace than with non-FTA partners. Between 2009 and 2014 exports to FTA countries have grown by 64 percent, versus45 percent for all non-FTAs, while imports from FTAs have expanded by 57 percent against 47 percent.
What does this mean for Florida?
Florida has much to gain from these negotiations and Florida has a long history of benefiting from free trade agreements. Today, 37 percent of Florida’s exports were to FTA countries and 17 percent of Florida’s economy is dependent on free trade.
The Florida Chamber, through its Trade and Logistics Study, outlines key strategies for building the hard and soft infrastructure as well as capacity to capture more trade and create more jobs.
US-EU trade and investment will grow under liberalized FTA rules. The State’s 15 deep water ports and 19 airports compete with EU’s more traditional trading partners to the north, but will become much more attractive to the EU if more efficient and economical FTA benefits are adopted.
An expanded Panama Canal will provide Florida with a more direct water trade with Asia. With PortMiami dredged to 50ft along with other port, rail and intermodal enhancements larger ships will be able to have access to Florida’s ports allowing for growth in trade. A trade agreement that opens us up to more markets in Asia will create more opportunities for Florida companies.