Global Tax Insights
The Trans Pacific Partnership (TPP) Is Poised to Revolutionize U.S. BusinessMay 24, 2016
The TPP agreement seeks to mitigate China’s influence in Asia and set the U.S up for success.
The Trans-Pacific Partnership (TPP) is a U.S. led global trade pact that seeks to create a free trade area among the signatory countries. In addition to the U.S., the other countries involved in the TPP are Vietnam, Japan, Malaysia, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile, and Peru. These countries spread across three continents, account for about 40 percent of global GDP, and about 30 percent of international trade.
Why was the TPP created?
The implantation of the TPP is set to make it easier for American farmers, entrepreneurs and small business owners to sell products abroad. These “Made-In-America” goods will enjoy more than 18,000 tax cuts in addition to the elimination of other trade barriers across the 11 other TPP countries. This will attempt to “even the playing field” and eliminate any disadvantage for American businesses. However, one of the largest benefits for U.S. businesses is the increased opportunity to engage with the Asian market and balance Chinese influence in the region. In addition to other Asian nations, President Obama has made efforts to strengthen relationships with Vietnam, and is set to visit the country from May 22-25, 2016.
The TPP trade area comprises a region with $28 trillion in economic output, making up around 39 percent of the world’s total output. If the TPP is successfully implemented, tariffs will be removed on almost $2 trillion in goods and services exchanged between the signatory countries. U.S. investors must take note, as the agreement will not only revolutionize U.S. business but offer a wealth of opportunity. The TPP offers worker protection, environmental protection, e-commerce opportunity, digital freedom, an open internet, benefits small businesses and prioritizes good governance while fighting corruption.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review service to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy, Germany and the U.S and alliance partners in Indonesia, Malaysia, the Philippines and Thailand. http://www.dezshira.com/