Several governments and organisations have lauded the agreement reached on 5 October in Atlanta on the Trans-Pacific Partnership (TPP), a historic deal that will ease trade in goods and services among 12 Pacific-Rim nations that account for about 40% of the world economy.
In financial services, the TPP targets investment advice and funds management, and insurance relating to risks in shipping and international commercial aviation. The agreement will include a commitment to allow financial institutions to transfer information among member countries for data processing.
In addition, the TPP agreement will seek to streamline regulations for financial services companies within the group of 12 Pacific-Rim member countries. Part of the push will focus on facilitating professionals working abroad. Financial industry professionals are to have greater opportunities to work overseas as a result of the TPP’s push for more financial services exports, the Australian government said.
The agreement was reached after five and a half years of negotiations by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.
Singapore’s Minister for Trade and Industry Lim Hng Kiang said: “The TPP embodies what Singapore sees as the future of the Asia Pacific. It will transform the region by reducing tariff and non-tariff barriers substantially for both goods and services, encouraging greater investment, and addressing new trade challenges in the modern economy.
“The TPP has also been deliberately designed to be more inclusive, so that small and medium-sized enterprises can take full advantage of its benefits.”
US insurers looking to Asia
The American Insurance Association (AIA) welcomed the announcement of the TPP agreement. In a statement, Mr Steve Simchak, AIA’s director of international affairs and a member of a USTR advisory committee, said: “Just the geographic scope of it alone creates the potential for unprecedented opportunity for US insurers.”
The US does not have existing trade agreements with Malaysia, Brunei, New Zealand, Vietnam and Japan. Therefore, significant improvement in those markets relative to current market conditions is expected for US insurers. In those markets where the US has existing agreements, the TPP can create enhanced trade liberalisation, the statement said.
The full text of the pact has yet to be released. The agreement has also to be ratified by member countries, a process which could take two years.