The Trans-Pacific Partnership (TPP) levels the playing field for American workers and American businesses, leading to more Made-in-America exports and more higher-paying American jobs here at home. By cutting over 18,000 taxes different countries put on Made-in-America products, TPP makes sure our farmers, ranchers, manufacturers, service suppliers, and small businesses can compete — and win — in some of the fastest growing markets in the world. With more than 95 percent of the world’s consumers living outside our borders, TPP will significantly expand the export of Made-in-America goods and services and support American jobs.

The TPP joins countries at widely varying levels of development. Recognizing this, the Development chapter creates a permanent Committee to help ensure that the Agreement’s developing-country Parties can take full advantage of the opportunities TPP creates for development and poverty reduction, and to focus attention on major development goals including inclusion of women, micro-enterprise, poverty reduction, and education, science, and technology.

Overview

The Development chapter, in tandem with the Cooperation and Capacity Building chapter, addresses the above challenges not through an assistance program, but through an initiative to leverage public and private sector resources to maximize the TPP Agreement’s development benefits.

Development Role

The Development chapter explicitly affirms the goal of Parties to improve economic opportunities in support of development, inclusive growth, and regional economic integration, and further, that these goals can be enhanced by cooperation among Parties, recognizing the different levels of development of the TPP countries.

Development Priorities

The chapter includes three specific areas to be considered for collaborative work once TPP enters into force, including:

  • Broad-Based Economic Growth
    Promoting broad-based economic growth through policies that take advantage of trade and investment opportunities created by the TPP Agreement can contribute, among other goals, to sustainable development, poverty reduction, and the promotion of micro, small- and medium-sized businesses.
  • Women and Economic Growth
    Enhancing opportunities for women to participate in the domestic and global economy through TPP contributes to economic development, including through activities aimed at helping women build capacity and skill; enhancing their access to markets, technology and financing; developing women leadership networks; and identifying best practices in workplace flexibility.
  • Education, Science and Technology, Research and Innovation
    Policies related to education, science and technology, research and innovation can help Parties maximize the benefits of the TPP agreement, including through activities aimed at developing expertise and managerial skills, and enhancing enterprises’ ability to transform innovations into competitive products and start-up businesses.

TPP Development Committee to Promote Joint Development Activities

The chapter establishes a TPP Development Committee that will meet regularly to promote voluntary cooperative work to identify and potentially support ways for TPP’s developing economies to tap new opportunities created by TPP for their development priorities. We anticipate that the Committee will work with governmental bodies as well as civil society groups, private companies, academic institutions, and non-governmental organizations, and promote joint activities to promote and align development activity, expand joint engagements in science, technology, and research; and facilitate public-private partnerships to enable private enterprises, small and medium-sized enterprises to bring their expertise to bear to support development goals

New Features

TPP is the first U.S. agreement to include a development chapter, incorporating commitments to promote sustainable development and broad-based economic growth. It has the potential to support new cooperative activities aimed at enhancing the ability of women to fully access and benefit from TPP, as well as activities designed to promote education, science, technology and innovation, including through science and technology agreements, public-private partnerships, and other joint development activities.

Impact

The Asia-Pacific region has been the center of one of the most rapid reductions of poverty in history. The World Bank estimates that from 2002 to 2011, despite the financial crisis, the number of Asians living in absolute poverty fell from 518 million to 161 million people, or by 70 percent. In the same period, Latin America has also seen a nearly 50-percent cut in absolute poverty. World Bank projections suggest the possibility of near-elimination of deep poverty in the Asia-Pacific over the next 15 years.

To further this progress, the TPP partners will need to further promote trade and investment by strengthening regional integration, spurring innovation, and ensuring inclusive and sustainable growth. The United States has many decades of experience in trade and development policy, dating to the Kennedy era Alliance for Progress, the creation of the Generalized System of Preferences in the 1970s, and the African Growth and Opportunity Act in 2000. In TPP, we have an opportunity to draw on this experience and the ideas of our partners and civil society groups, in pursuit of equity, inclusion, and the alleviation of poverty in the world’s most populous region.

Complementing the agreement’s provisions on market access, e-commerce, customs, and other issues, the Development chapter’s institutional focus on development-related issues will help to ensure that TPP will be a model of high-standard trade and economic integration, that TPP’s developing-country members can obtain the complete benefits of the agreement, and that they are fully able to implement their commitments. This will help sustain growth rates, alleviate poverty, promote food security, and boost living standards broadly for citizens in all TPP countries; and at the same time, enable TPP’s developing-country members to emerge as more prosperous societies and stronger markets for America’s goods and services.

Article 23.1: General Provisions

1. The Parties affirm their commitment to promote and strengthen an open trade and investment environment that seeks to improve welfare, reduce poverty, raise living standards and create new employment opportunities in support of development.

2. The Parties acknowledge the importance of development in promoting inclusive economic growth, as well as the instrumental role that trade and investment can play in contributing to economic development and prosperity. Inclusive economic growth includes a more broad-based distribution of the benefits of economic growth through the expansion of business and industry, the creation of jobs, and the alleviation of poverty.

3. The Parties acknowledge that economic growth and development contribute to achieving the objectives of this Agreement of promoting regional economic integration.

4. The Parties also acknowledge that effective domestic coordination of trade, investment and development policies can contribute to sustainable economic growth.

5. The Parties recognise the potential for joint development activities between the Parties to reinforce efforts to achieve sustainable development goals.

6. The Parties also recognise that activities carried out under Chapter 21 (Cooperation and Capacity Building) are an important component of joint development activities.

Article 23.2: Promotion of Development

1. The Parties acknowledge the importance of each Party’s leadership in implementing development policies, including policies that are designed for its nationals to maximise the use of the opportunities created by this Agreement.

2. The Parties acknowledge that this Agreement has been designed in a manner that takes into account the different levels of economic development of the Parties, including through provisions that support and enable the achievement of national development goals.

3. The Parties further recognise that transparency, good governance and accountability contribute to the effectiveness of development policies.

Article 23.3: Broad-Based Economic Growth

1. The Parties acknowledge that broad-based economic growth reduces poverty, enables sustainable delivery of basic services, and expands opportunities for people to live healthy and productive lives.

2. The Parties recognise that broad-based economic growth promotes peace, stability, democratic institutions, attractive investment opportunities, and effectiveness in addressing regional and global challenges.

3. The Parties also recognise that generating and sustaining broad-based economic growth requires sustained high-level commitment by their governments to effectively and efficiently administer public institutions, invest in public infrastructure, welfare, health and education systems, and foster entrepreneurship and access to economic opportunity.

4. The Parties may enhance broad-based economic growth through policies that take advantage of trade and investment opportunities created by this Agreement in order to contribute to, among other things, sustainable development and the reduction of poverty. These policies may include those related to the promotion of market-based approaches aimed at improving trading conditions and access to finance for vulnerable areas or populations, and SMEs.

Article 23.4: Women and Economic Growth

1. The Parties recognise that enhancing opportunities in their territories for women, including workers and business owners, to participate in the domestic and global economy contributes to economic development. The Parties further recognise the benefit of sharing their diverse experiences in designing, implementing and strengthening programmes to encourage this participation.

2. Accordingly, the Parties shall consider undertaking cooperative activities aimed at enhancing the ability of women, including workers and business owners, to fully access and benefit from the opportunities created by this Agreement. These activities may include providing advice or training, such as through the exchange of officials, and exchanging information and experience on:

(a) programmes aimed at helping women build their skills and capacity, and enhance their access to markets, technology and financing;

(b) developing women’s leadership networks; and

(c) identifying best practices related to workplace flexibility.

Article 23.5: Education, Science and Technology, Research and Innovation

1. The Parties recognise that the promotion and development of education, science and technology, research and innovation can play an important role in accelerating growth, enhancing competitiveness, creating jobs, and expanding trade and investment among the Parties.

2. The Parties further recognise that policies related to education, science and technology, research and innovation can help Parties maximise the benefits derived from this Agreement. Accordingly, Parties may encourage the design of policies in these areas that take into consideration trade and investment opportunities arising from this Agreement, in order to further increase those benefits. Those policies may include initiatives with the private sector, including those aimed at developing relevant expertise and managerial skills, and enhancing enterprises’ ability to transform innovations into competitive products and start-up businesses.

Article 23.6: Joint Development Activities

1. The Parties recognise that joint activities between the Parties to promote maximisation of the development benefits derived from this Agreement can reinforce national development strategies, including, where appropriate, through work with bilateral partners, private companies, academic institutions and non- governmental organisations.

2. When mutually agreed, two or more Parties shall endeavour to facilitate joint activities between relevant government, private and multilateral institutions so that the benefits derived from this Agreement might more effectively advance each Party’s development goals. These joint activities may include:

(a) discussion between Parties to promote, where appropriate, alignment of Parties’ development assistance and finance programmes with national development priorities;

(b) consideration of ways to expand engagement in science, technology and research to foster the application of innovative uses of science and technology, promote development and build capacity;

(c) facilitation of public and private sector partnerships that enable private enterprises, including SMEs, to bring their expertise and resources to cooperative ventures with government agencies in support of development goals; and

(d) involvement of the private sector, including philanthropic organisations and businesses, and non-governmental organisations in activities to support development.

Article 23.7: Committee on Development

1. The Parties hereby establish a Committee on Development (Committee), composed of government representatives of each Party.

2. The Committee shall:

(a) facilitate the exchange of information on Parties’ experiences regarding the formulation and implementation of national policies intended to derive the greatest possible benefits from this Agreement;

(b) facilitate the exchange of information on Parties’ experiences and lessons learned through joint development activities undertaken under Article 23.6 (Joint Development Activities);

(c) discuss any proposals for future joint development activities in support of development policies related to trade and investment;

(d) invite, as appropriate, international donor institutions, private sector entities, non-governmental organisations or other relevant institutions to assist in the development and implementation of joint development activities;

(e) carry out other functions as the Parties may decide in respect of maximising the development benefits derived from this Agreement; and

(f) consider issues associated with the implementation and operation of this Chapter, with a view towards considering ways the Chapter may enhance the development benefits of this Agreement.

3. The Committee shall meet within one year of the date of entry into force of this Agreement, and thereafter as necessary.

4. In carrying out its functions, the Committee may work with other committees, working groups and any other subsidiary body established under this Agreement.

Article 23.8: Relation to Other Chapters

In the event of any inconsistency between this Chapter and another Chapter of this Agreement, the other Chapter shall prevail to the extent of the inconsistency.

Article 23.9: Non-Application of Dispute Settlement

No Party shall have recourse to dispute settlement under Chapter 28 (Dispute Settlement) for any matter arising under this Chapter.

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