27 Mar 20 | Business brief
While the overall agreement remains stalled, the sign-off of the Trans-Pacific Partnership’s environment chapter is a chance to boost sustainable supply chains
Meeting in Hawaii, negotiators were meant to more or less finalise TPP, but various obstacles – including New Zealand dairy exports and intellectual property protection for pharmaceuticals – meant that agreement was postponed.
Negotiators did, however, sign off on TPP’s environmental chapter. This includes basic standards that all parties must adhere to, backed up by enforcement mechanisms. Ultimately, trade sanctions could be imposed on infringers.
Such provisions are especially relevant for TPP, which will be a very diverse arrangement of developed and developing economies: the participating nations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam, which between them represent about 40% of global GDP.
US companies are keen for a level playing field. In a letter sent in late July to US Trade Representative Michael Froman, a group of US Democrat politicians outlined the rationale for a strong environmental chapter in TPP. It is an opportunity to improve conservation of natural resources in poor countries, and was necessary for the integrity of the agreement, they argued.
But TPP should create at least some leverage to press for environmental improvements. Even if all the environmental chapter does is to oblige countries to enforce existing environmental laws, it makes it just that little bit harder for companies to behave unsustainably.
For example, if an organisation such as the Sierra Club suspects that illegal timber is being imported to the US from, say, Malaysia, it can pressurise the US authorities to, in turn, pressurise the Malaysian government.