Regarding the TPP

The pushback on the Trans-Pacific Partnership (TPP) was tremendous. For years, leaks of the intellectual property chapter and other tidbits here and there fueled massive dislike from the tech community at a time when mainstream media wouldn't acknowledge its existence. The final text was released in early November 2015, allowing me and everyone else the opportunity to read the full text as agreed upon by all 12 Parties. Leaks and press prior to the full text release were overwhelmingly negative. Within hours of the text's availability, news outlets, politicians, and more were spewing hate. They were calling it the worst agreement in history and saying it would kill America's economy. This took me by surprise considering how massive the document was. Maybe I was just a really slow reader?

It's one thing to denounce the TPP from a place of educated awareness. I did this based on reading leaked chapters. But to denounce the entire text within an hour of its release and clearly having not read it? That's not right. I don't want to be that guy. So I began the month-long quest to read, summarize, and develop thoughts on the TPP for myself. My opinion on it is quite different than it was before the final release.

Do I like the agreement as a whole? No. The bad parts of the agreement outweigh the good to the point where I still cannot support it in its current written form. The IP chapter is still bad, though not as bad as it originally was. Other chapters have issues as well. But, surprisingly, there is a lot of good stuff in this agreement.

What I've done here is aggregate for you TPP information. I link you to each article, link you to the USTR summary of each article, provide you with a detailed summary of each article I wrote myself, and then give you my thoughts on each article. Where applicable, I try to provide off-site context for other agreement references that the TPP uses such as the General Agreement on Tariffs and Trade (GATT).

Be warned: I am not a lawyer nor a trade agreement expert. I'm just a regular guy running for President trying to use logic and reason to objectively consider this massive free trade agreement. I also only focused on US portions of the agreement since that is the Party to which I am a national of.

Chapter 1 - Initial Provision and General Definitions
Chapter 2 - National Treatment and Market Access for Goods
Chapter 3 - Rules of Origin and Origin Procedures
Chapter 4 - Textiles and Apparel
Chapter 5 - Customs Administration and Trade Facilitation
Chapter 6 - Trade Remedies
Chapter 7 - Sanitary and Phytosanitary Measures
Chapter 8 - Technical Barriers to Trade
Chapter 9 - Investment
Chapter 10 - Cross-Border Trade in Services
Chapter 11 - Financial Services
Chapter 12 - Temporary Entry for Business Persons
Chapter 13 - Telecommunications
Chapter 14 - Electronic Commerce
Chapter 15 - Government Procurement
Chapter 16 - Competition Policy
Chapter 17 - State-Owned Enterprises and Designated Monopolies
Chapter 18 - Intellectual Property
Chapter 19 - Labor
Chapter 20 - Environment
Chapter 21 - Cooperation and Capacity Building
Chapter 22 - Competitiveness and Business Facilitation
Chapter 23 - Development
Chapter 24 - Small and Medium-Sized Enterprises
Chapter 25 - Regulatory Coherence
Chapter 26 - Transparency and Anti-Corruption
Chapter 27 - Administrative and Institutional Provisions
Chapter 28 - Dispute Settlement
Chapter 29 - Exceptions and General Provisions
Chapter 30 - Final Provisions


Chapter 1 - Initial Provision and General Definitions

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Parties to this agreement consistent with Article XXIV of GATT (1994) and Article V of GATS hereby establish a free trade area in accordance with provisions of this agreement. [Article 1.1]

Parties affirm this agreement will coexist with other agreements Parties are member to- be it the WTO Agreement or an agreement two Parties already have entered into. Existing rights/obligations therein will not change. If a Party believes there to be inconsistency between provisions here and elsewhere, they shall upon request consult to reach a mutually satisfactory solution. This is without prejudice to a Parties rights/obligations under Chapter 28 (Dispute Settlement). If another agreement provides more favorable treatment of goods/services/investments/etc than this, that will not be considered inconsistent. [Article 1.2]

This chapter kicks off the TPP. It affirms that existing rights and obligations by Parties under other agreements will not go away. It then defines many terms such as central govt, customs administration, etc for each Party.

My issue with this chapter- and with the TPP as a whole- is Article 1.2. There will be a lot of inconsistencies with this agreement and other agreements. For example, the Investor State Dispute Settlement (ISDS) process under NAFTA is more favorable than that under the TPP to the point where NAFTA allows suing for "lost profits" whereas the TPP does not (see Article 9 thoughts). Without affirmed consent that one agreement trumps the other, there is a danger of "shopping around" when it comes to provisions across multiple trade agreements.


Chapter 2 - National Treatment and Market Access for Goods

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

No Party shall increase an existing customs duty or adopt new customs duties on an originating good. They'll also slowly work towards eliminating customs duties on originating goods according to the given schedule in Annex 2-D with acceleration ok if 2+ Parties are cool with it. A Party can also speed up customs duty elimination towards any other Party unilaterally if desired. [Article 2.4]

Goods sent for repair/alternation to an external Party are exempt from customs duties, regardless if the repair could be done at home. [Article 2.6]

Commercial samples and single copy printed advertising packets are exempt from customs (yay?) [Article 2.7]

Goods required for carrying out business activities (including TV, movies, sports, displays/demonstrations, etc) on a temporary basis are now admitted duty free. Such goods must be used by the people bringing them in, cannot be sold/leased, have minimum security, is easily identifiable on import/export, and is legally allowed under the Party's laws. Containers and pallets are also granted temporary duty-free admission. The goods brought in under this temporary system shall be released into/out of the customs area simultaneously with the person carrying them. [Article 2.8]

Allows for freedom of choice in port of entry and port of exit so that traffic (vehicle and/or container) from one Party need not leave from the same port which it entered. Important from a land transportation perspective. [Article 2.8]

Sets up system to allow Parties to engage in trade discussions in a timely fashion [Article 2.10]

Removes import/export restrictions outside of those in accordance with the General Agreement on Tariffs and Trade from 1994 (GATT-94). This apparently now includes cryptographic goods. Also talks a little about import/export restrictions to non-Parties being ok and Parties being able to discuss such. [Article 2.11] Remanufactured goods are now exempt from import/export restrictions as well which are treated separate from used goods. [Article 2.12]

Ensures all Parties follow standards setup in the Import Licensing Agreement of the WTO. Says everyone will communicate new/existing licensing procedures and notify of new procedures/changes in timely fashions. Denied licensing will also be held accountable. [Article 2.13] All Parties will also be transparent in regards to the export licensing procedures by providing thorough documentation explaining said procedures. Parties will also be transparent about the aggregate number of licenses granted and any measures they've taken to restrict production/consumption or stabilize production/supply/prices of relevant goods [Article 2.14] Everyone will also participate in and follow the mandate of the WTO Information Technology Agreement. [Article 2.20]

Any fees charged outside of the GATT-94 shall be in accordance with approximate cost of services. Some restrictions apply and all fees associated with import/export must be published on the internet [Article 2.15] Export fees (duties/taxes/etc) are not allowed in most circumstances to other Parties [Article 2.16]

Parties will setup a trade committee to meet on occasion for purposes of discussing other barriers, reviewing amendments, resolving differences, etc, etc [Article 2.17]

Each Party will publish in an easily accessible manner info regarding all import/export/duty/tax/classification/restrictions/fees/penalties/etc in regards to import/export/transit trade [Article 2.19]

Work to eliminate agricultural export subsidies on any good destined for another Party [Article 2.23] Parties will also work together and with the WTO to eliminate state trading enterprises of agricultural goods [Article 2.24 and 2.25] No duties to be charged to Parties related to special safeguards (see WTO Agreement on Agriculture) taken on agricultural goods [Article 2.28]

It's recognized that food security is important and that Parties can restrict import/export due to security concerns (disease, shortage, etc), but have to be very transparent about it and notify other Parties in a timely fashion [Article 2.26]

Parties establish a committee on agricultural trade to promote trade, monitor imports/exports, consult with each other, meet occasionally, etc, etc [Article 2.27]

Bring about greater transparency in the laws surrounding biotechnology (especially in regards to agriculture) and also in reporting/handling low level presence incidents (LLP). That is to say, when some biotech approved in one country manages to get into another country where it hasn't been approved. Parties will work towards increasing approval of biotech to reduce likelihood of trade disruptions. [Article 2.28]

Require tariff-rate quotas (TRQ's) in accordance with GATT-94 for all Parties. TRQ's will be made public, must be fair, not administratively burdensome, and responsive to market conditions. TRQ's with allocation components have procedures in place to ensure fairness of fulfillment including returns of unused allocations. TRQ transparency will be increased and made available on the internet. [Articles 2.31, 2.32, 2.33, and 2.34]

Annex 2-A says national treatment (ie, treating external Parties like US firms) and export guidelines in Article 2 do not apply to logs of all species and the provisions of 46 USC 883 (Transportation of merchandise between points in United States in other than domestic built or rebuilt and documented vessels; incineration of hazardous waste at sea) and 46 USC 12108 (Fishery endorsements). Also rough diamonds are part of this agreement pursuant to the Kimberley Process Cert Scheme. Other restrictions on Article 2 applications apply to various countries in various circumstances.

This section is fairly straight forward and seems to contain content which any decent trade agreement should have: tariff, subsidy, import, and export measures relating to cost, transparency, and fairness. Not being a trade agreement expert, I cannot accurately comment on whether this is better or worse for the United States, but the way it reads seems like a win for the US in regards to participating in the global market. I don't see any problem thus far. I did not look through all the Appendices for US measures in regards to Article 2 and the tariff elimination schedule, TRQ's on ice cream and condensed milk, etc. because they are mainly country-specific details and agreements.


Chapter 3 - Rules of Origin and Origin Procedures

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Sets the standard for what constitutes an "originating good" (ie something born/created/mined/produced/remanufactured/etc wholly in the territory of participating Parties). [Article 3.2, 3.3, 3.4, 3.10] Provides formulation for regional value content (RVC, ie, percentage of goods that must be from an origin country) using different methods (focused, build up, build down, net cost). [Article 3.5] This allows non-originating goods to become originating should they undergo production changes or get used in production of something else. [Article 3.6] For purposes of origination consideration, things like accessories, spare parts, tools, instructions, packing materials for resale/shipping, etc are ignored for the most part. [Article 3.13, 3.14, 3.15]

Cost of imported materials used in production must be made known along with value of self-produced materials, which may include costs outside of the good itself such as freight, insurance, packing, duties, taxes, etc. [Article 3.7 and 3.8] Covers the concept of "net cost" in relation to goods including specifics relating to net cost of vehicles; however, vehicle net cost calculations in certain regards may be averaged over the producer's fiscal year. [Article 3.9] Sets a de minimis standard for origination with non-originating material at 10% of the value of the good and applies to RVC. [Article 3.11]

Origination status will remain will remain if the goods do not pass through a non-participating Party or, if they do pass through, the non-participating Party can only unload, reload, separate from other shipments, and do other operations necessary to preserve the condition of transport while remaining under control of the non-participant's customs administration. [Article 3.18]

With certification of origin and pursuant to other arrangements in Annex 3-A, importers can make claim for preferential treatment with applicable certificate of origination from an exporter/producer/other importer. [Article 3.20, 3.21, 3.22, 3.23] Establishes certain obligations relating to import/export certification and acceptance (ie, if certs are correct or not, legal consequences for false certification, etc). [Article 3.24 and 3.25] Records relating to preferential treatment will be kept for at least 5 years in any medium allowing prompt retrieval. [Article 3.26] Allows for origin verification through a written process but will not hold up goods from transit pending verification and payment of duties/taxes/etc with positive verification resulting in refunds of excess charges [Article 3.27 and 3.29] Sets some standards for granting or denying preferential treatment [Article 3.28] Penalties for violations are allowed on a per-country basis and confidentiality will be maintained to avoid prejudicing the competitive position of a person. [Article 3.30 and 3.31]

Also sets up a committee on rules of origin and origin procedures that will meet on occasion. [Article 3.32]

The Annexes to this section contain some transition details (over 12 years) for compliance [Annex A] along with minimum data requirements for origination certification [Annex B] and some specific exceptions to de minimis costs as defined in 3.11 (eg various products with dairy, animal feed, an dough). [Annex C]

Annex 3-D covers a lot of specifics when it comes to ratios in RVC, cost, and origination. There are classifications of materials along with percentages of materials necessary for a good to be counted as "originating."

Appendix 1 to Annex 3-D covers origin specifics in relation to vehicles and vehicle parts. Table C lists out percentage applicable to various parts like bumpers, safety belts, gear boxes, steering systems, etc for a part to be considered of origin with levels at 5% and 10%.

This section covers origination, preferential treatment, and certification for purposes of tariff, duties, taxes, and other fees that might be charged on imports and exports. For the most part, it makes logical sense in a trade agreement. The only concerns that rise up are the call-outs related to vehicles. I'm unsure of the current situation regarding automobile manufacturing in relation to Parties involved in this agreement so I cannot fairly comment on whether the origination and/or cost calculations discussed in this section help or hurt the US from a car manufacturing perspective. The general consensus seems to be that the cost calculations will result in "Made in America" products containing a larger percentage of non-American materials than American. This problem could extend to non-auto manufacturing as other countries join the agreement. A common concern is that a car could be 55% Chinese and still be "Made in America." I'm not sure that's the case given thresholds with specific parts of the car on top of the thresholds given for RVC calculations, but the exceptions do make me question why the call-outs were necessary in the first place.

One thing to point out is that origination really covers the entire TPP zone. "Made in Japan" and "Made in America" and "Made in Mexico" become somewhat ubiquitous in this fashion. This limits the "China" problem a good bit, I think, but raises the stakes for non-Chinese firms with regards to production. Japan's importation of low-cost parts coupled with its sizable market share with car manufacturing (even here in the US) raises some concerns because of these origination rules. It is possible that the US will suffer from this setup.


Chapter 4 - Textiles and Apparel

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Pertaining to textiles and apparel, it determines that the rules of origin from Article 3 apply but also sets up some new origination rules with regards to certain materials, fibers, and yarns based on weight of the produced good, itself- capping out at 10%. This applies to each item in a set of goods as well. There is a list of "Short Supply" materials under Appendix 1 of Annex 4-A which allows for non-originating materials on the list to be considered originating (some of which have end use requirements, like certain woven trousers or shorts). Duty-free exceptions to homemade textiles/apparel have been crafted for hand-made, cottage industry, traditional folklore goods. [Article 4.2]

Unlike Article 3, this Article has a section on Emergency Action which allows for one Party to alter preferential treatment due to the treatment resulting in destruction of domestic production due to mass import of foreign-made goods. There is written notification and transition periods setup to handle the "crisis." However, the Party taking such emergency action needs to compensate the affected Parties with equivalent trade effects of textile/apparel goods only (ie, no compensation to car part imports). [Article 4.3]

Sets up a level of cooperation for all Parties in regards to enforcing and assisting in enforcement of customs offenses. This requires taking "appropriate measures" including establishing and/or maintaining criminal, civil, and administrative penalties for customs offenses. Parties may notify other parties of typical high risk areas where offenses occur. [Article 4.4] There will also be setup programs and/or practices to identify and address such offenses and ensure the accuracy of such claims. Such info will be shared amongst Parties. [Article 4.5] On top of all this will be verification processes of the goods imported/exported along with site visits and records of sites by request of one Party to another. [Article 4.6].

Parties may deny claims for preferential treatment based on reasons in Article 3.28 or if it hasn't received sufficient info to determine if the textile/apparel is originating or not. [Article 4.7]

A committee will be formed to discuss conflicts, resolutions, concerns, etc relating to textile and apparel trade matters. They will meet on occasion. [Article 4.8]

Any data collected in relation to this Article will remain secure and confidential to avoid prejudicing the competitive position of a person. [Article 4.9]

I'm guessing there is concern about counterfeit goods. The majority of this section relates to customs offenses. Outside of that, there are requirements for origination in the TPP territory and a "short supply" list to solve production issues. I'm unsure how much of the short supply list really is "short;" might there actually be enough of XYZ materials to keep production of ABC shirts going but a Party wants to keep the material on the short supply list to ensure profit from purchase through, say, China? Besides that, from an origination perspective, it seems like this section is more favorable than others to the US in terms of materials within the TPP region. I don't see much of a problem with this Article aside from the counterfeit concern.


Chapter 5 - Customs Administration and Trade Facilitation

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This Article deals with predictable, consistent, and transparent customs procedures. It encourages cooperation through communication, legal compliance, and information sharing amongst other avenues. Suspicion of issues have a path for resolution which includes sharing of possibly confidential information. Such suspicions and requests need to be in writing and very specific in both purpose and the info requested. [Article 5.2]

Advanced ruling will be made available before importation of a good in regards to tariff classification, valuation criteria, origination, etc if requested by the exporter or producer of another Party. Such rulings will be made quick assuming all needed information is provided in a timely fashion. [Article 5.3] Other information concerns advice or information on tariffs, costs, origination, etc will also be responded to in a timely fashion by Parties when asked. [Article 5.4]

Various customs determinations can be appealed with independent review of the determination. In other words, the employee or office that issued the review in the first place will not conduct the appeal. Judicial review is also acceptable. [Article 5.5]

Automation will be used to help speed up the import/export process with Parties to work towards electronic, usable systems for procedures. [Article 5.6] Express shipment procedures will also be setup to allow one-time information submissions covering all goods in an express shipment, possibly through electronic means. A 6 hour timeframe is set for release of express shipments, but there is a recognized limitation with regards to shipments of certain size and/or value. [Article 5.7] Risk management systems will be used for managing high-risk goods from an inspection standpoint. This simplifies the clearance of low-risk goods. [Article 5.9] Simplified release procedures will be established to allow release of goods in a timely fashion through advanced electronic submission of customs info and/or if the goods are eligible but the taxes/fees/duties are not being calculated in a timely fashion. [Article 5.10]

Penalties are set for breaches of a Party's custom laws. Such penalties apply solely to the person(s) involved in said breaches. Breaches may revolve around procedure requirements, tariff classification, customs valuation, origination claims, etc. [Article 5.8]

Information collected via these procedures will be confidential. [Article 5.12] Information regarding the procedures, laws, guidelines, etc shall be made public on the internet and elsewhere. [Article 5.11]

Like Article 2, this Article doesn't give me any cause for worry in-and-of-itself. Procedures are required and speeding up the process of importing/exporting is advantageous to every Party involved.


Chapter 6 - Trade Remedies

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This Article deals with safeguards and remedies in relation to imports of particular products. It lines up with Article XIX of the GATT-94. Should there be a situation where imports and/or preferential treatment of imports results in domestic problems, investigation shall begin. No safeguard measures are allowed for any product imported under a TRQ. There are also limits on the number of safeguards that can be on the same good at the same time. [Article 5.2]

During the transition period of the agreement, certain transitional safeguards may be implemented by Parties if the result is that imports of a particular good increase to the point where domestic production is threatened or seriously injured. If such is the case, preferential treatment may be eliminated and tariffs/duties/taxes/fees/etc may be levied against the good(s) in question to the most-favored-nation rate in effect at the time. [Article 6.3] Safeguards will only be maintained until the situation is remedied, typically under 2 years (though a 1 year extension is possible). The tariff elimination schedule is unchanged in regards to safeguards during the transition phase. [Article 6.4] Only competent authorities in accordance with the Safeguard Agreement can apply safeguard measures and only after investigation. [Article 6.5] Other Parties must be notified in writing of the safeguard decisions and include evidence of injury, threat of injury, or other cause for said safeguards. [Article 6.6]

If safeguards are implemented, consultants with each Party (the implementer and those affected) will meet to discuss compensation to the exporter/producer Party affected. Such compensation will be substantially equivalent trade effects or the value of additional duties expected from the resulting safeguard measure. [Article 6.7]

Safeguard remedies from this section and Annex 6-A are not subject to dispute settlement (ISDS) nor are antidumping (AD) and countervailing duties (CVD). [Article 6.8]

Annex 6-A sets up practices relating to AD/CVD proceedings. Included are written notifications, quick response times, public files, verification of send and receipt of information, written reports, maintenance of confidentiality in a reasonable fashion, etc.

Like Article 2, this Article doesn't give me any cause for worry. Safeguards are necessary in international trade. The time limits and procedures given here seem fine to me.


Chapter 7 - Sanitary and Phytosanitary Measures

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This Article deals with sanitary and phytosanitary issues amongst Parties in the quest to protect humans, animals, and plants in Parties' territories by using the WTO SPS Agreement as a base. Any measure that may directly or indirectly affected trade applies here. Except for measures relating to halal requirements for food in accordance with Islamic law. [Article 7.2, 7.3, 7.4]

Establishes a committee on sanitary/phytosanitary matters to enhance implementation of measures, consider matters of mutual interest, help Parties understand issues, exchange information, etc. [Article 7.5]

Parties shall provide in writing descriptions of sanitary/phytosanitary responsibilities of its competent authorities and contact points for said authorities. [Article 7.6]

Sets up procedures for recognition and adaptation to regional conditions. This includes rationalization, zoning, and compartmentalization. Cooperation on procedures will be put in place to recognize pest/disease free areas and areas of low pest/disease prevalence. Exporting Parties may request conditions from importing Parties and shall be given a response in a reasonable time. If evaluation of evidence provided by exporters does not result in determination of pest/disease free areas as determined by the importing party, the exporter will be told why. [Article 7.7]

Each Party recognizes the equivalence of sanitary and phytosanitary measures, with this agreement applying Article 4 of the SPS Agreement on a system-wide basis where feasible/appropriate. Equivalence assessments can be asked for and importers will explain objectives concerning sanitary/phytosanitary measures, but importers shall take into account available knowledge/info/experience/regulatory competence of exporting Parties. If the exporting Party's measure achieves the same level of protection as the importing Party or has the same effect in achieving the objective, equivalence will be granted. [Article 7.8]

All Parties recognize importance of scientific principles in sanitary/phytosanitary measures and shall conform to relevant international standards, guidelines, or recommendations. It's own documented and objective scientific evidence will also be accepted as rationale for not following international standards, etc. Parties are allowed to establish their own levels of protection, risk analysis, and provisional sanitary/phytosanitary measures in accordance with the SPS Agreement. Measures will not discriminate between Parties where identical or similar conditions prevail on each Party's territory. Risk analysis is open for comment by other Parties and takes into account relevant WTO SPS guidelines, risk management options not more restrictive to trade than necessary to achieve protection, and select such options that are not more restrictive than required for sanitary/phytosanitary objectives when taking into account technical and economic feasibility. [Article 7.9]

Importing Parties shall have the right to audit the competent authorities of exporting Party's programs and even on-site inspections using the relevant guidelines of the WTO SPS Committee. Both Parties will discuss scope/objective of the audit prior to it taking place as well as procedure for conduct. The auditee can comment on findings. Auditor pays cost and procedures will be in place to keep confidentiality. [Article 7.10]

Import checks will be conducted without delay using appropriate and validated methods. Testing that occurs will be documented and import refusal will be backed by evidence. [Article 7.11]

Parties recognize that assurance to sanitary/phytosanitary measures may be provided through means other than certificates. If certs are required, it shall only be to the extent necessary to protect human/animal/plant life or health under SPS Committee guidelines and other international standards. Certificate info requirements shall only be for essential info related to sanitary/phytosanitary objectives. Parties may cooperate for formulating certs accompanying specific goods to be traded. Parties will move towards electronic certifications. [Article 7.12]

Transparency requirements will allow Parties to see, review, and comment on protective measures in proposed for implementation via electronic means. Should proposals not meet standards, Parties will provide each other on request the rationale for why. Final measures will be submitted through the WTO SPS notification submission system with specifics. Any info handed over in relation to proposals will comply with applicable privacy/confidentiality agreements. If actual implementation of measures differs from the submitted proposals, Parties will explain why. And any sanitary/phytosanitary risk that becomes known will be communicated to other Parties. [Article 7.13]

Parties will strive to cooperate with each other in these matters and may work jointly together to eliminate unnecessary obstacles. [Article 7.15] This includes information exchanges and use of Cooperative Technical Consultations. CTC communications will be kept confidential between Parties involved. [Article 7.16 and 7.17]

Dispute Settlement is allowed for equivalence charges, audits, import checks, and scientific risk analysis. Scientific and/or technical issues will have disputes advised by a panel of experts. [Article 7.18]

Sanitary/phytosanitary considerations are important. This could range from transportation of live cargo to processed goods, stray wildlife, flora, fauna, or anything else that might endanger another Party's ecosystem. It also seeks to ensure agriculture is grown/cultivated in sanitary, healthy conditions to keep us safe and well. Because it's rooted in the existing SPS Agreement, the main concern I see here is with the scientific analysis guidelines. Allowing Parties to follow their own rules based on their own research and standards is probably not a good thing. I question this and the related equivalence that could result from measures implemented abroad.

To take that a step further, consider the USTR's SPS Report from 2014. Section III deals with "major" SPS issues and, essentially, is a list of problems the US seeks to remedy in regards to the exports of flora/fauna (including food/food products). The US is complaining about certification requirements on each shipment, burdensome "attestations" as conditions for entry, and problems with US agriculture of the genetically engineered (GE) variety facing bans in a number of countries. Here it seems America is pushing for our standards of GE food instead of changing the way we produce food to fit with more "traditional" and/or "natural" methods. Hence the claims in this Article about scientific research as a proof; if the US can "prove" it's just as safe, then the equivalence will reduce those import bans. Same with regards to disease issues from the past with livestock-driven products (beef, poultry, etc). There are also calls to have the US's maximum residue levels of pesticide be acceptable to other Parties. Instead of lowering pesticide levels to those other Parties might deem worthy, we're pushing our EPA/FDA acceptable standards on others. Having eaten fruit around the world, I can tell you that America's fruit could use a bit less chemical influence and don't blame, say, Japan for wanting to limit imports or apples.

In short, I feel a lot of the "bad" food stuff people complain about in the US is true and am sad to see the US reduce standards around the world instead of raising our own.


Chapter 8 - Technical Barriers to Trade

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section covers items meant to facilitate trade. Included are the elimination of technical barriers, enhancing transparency, and promoting greater regulatory cooperation with good regulatory practice within the central government bodies of each Party. Central govt bodies will work with lower level govt bodies to ensure compliance and conformity. Where rules/regulations are covered elsewhere (like sanitary/phytosanitary content), see those sections. [Article 8.2 and 8.3]

A number of sections from the Technical Barriers to Trade Agreement (TBT Agreement) are incorporated here to restrict technical requirements that limit trade (but not reqs to protect consumers, the environment, etc). Notice will be given for technical requirements along with reasoning for such. Other Parties can comment on these requirements. TBT standards for conformity are incorporated with notification of such and time for conformity being given to Parties. [Article 8.4 and 8.5] Parties shall accord to conformity assessment bodies in territories of other Parties the same favorable treatment as their own conformity assessment bodies (specific conformities for specific products not withstanding). Deals with handling of information required for conformity, ensure confidentiality, and covers review procedures. Tests/certifications for conformity need not be done in the territory where conformity is required. Inspectors for conformity need not be from the territory where conformity is required either. Results can be verified and cannot be refused simply because the testing body is non-governmental, does not operate in the Party's territory, is for-profit, or even resides in the territory of a Party that lack procedure for recognizing accreditation bodies. Criteria for accreditation competency will be published (ideally electronically). Parties need to justify refusal of accreditation of another Party's body if they have their own accreditation body within its own territory for the particular technical requirement. Fees are limits to actual costs. [Article 8.6]

Parties are encouraged to participate in development of tech regulations, standards, and conformity assessment procedures of other Parties to aid in transparency. Proposals shall be sufficiently detailed and published, preferably online as will final technical regulations and requirements. This applies to all levels of government. New proposals and measures will be communicated to Parties and the WTO and allow for at least 60 days to comment. [Article 8.7]

A reasonable timeframe will be allowed for compliance and conformity of measures and proposals, starting at 6 months (unless 6 months is actually ineffective in implementing). [Article 8.8] Furthermore, it's recognized that there are a number of ways to facilitate conformity results and greater regulatory alignment amongst Parties with Parties to actively exchange info and collaborate on mechanisms to facilitate acceptance of conformity results and eliminate other unnecessary regulatory barriers. [Article 8.9 and 8.10]

Establish a committee on technical barriers to trade that will meet on occasion to discuss monitoring and implementation of operations from this chapter, other technical discussions, to encourage cooperation between Parties (govt to govt and govt to non-govt), etc. [Article 8.11]

Annexes spell out regulations and conformities in various scopes [8.12] Wine/distilled spirits [Annex 8-A], information and communication technology products (ICT) that use cryptography or relating to electromagnetic compatibility of IT equipment with functional radio transmission/reception [Annex 8-B], pharmaceuticals [Annex 8-C], cosmetics [Annex 8-D], medical devices [Annex 8-E], proprietary formulas for prepackaged foods and food additives [Annex 8-F], and organic products [Annex 8-G]. All Annexes allow for time to consider authorization to market/sell/distribute products in question and grant communication of reasons why products might be denied.

Most everything outside of the Annexes I don't see a problem with. Reducing technical barrier to trade, promoting transparency and greater regulatory cooperation between Parties is beneficial. Making sure conformity occurs, that testing is kosher, and that verification of standards is met receives my blessing. However, the section on accreditation worries me because of the "for-profit" element. When the government of the Party bears responsibility for accreditation, standards, and enforcement, such holds the Party responsible. By using non-government bodies for testing, especially ones that are "for-profit," intention and desire for money becomes a factor. America currently sees the problem with this model in our healthcare system and Contract Research Organizations that operate "for-profit" clinical trials for drug manufacturers. Studies show that such CRO's feel the need to conducting testing and trials favoring the drug company whose product is on the line because of the millions of dollars at risk. Ill-favor results in CRO's losing business. We do not want the same issue with "for-profit" accreditation services here in America or in other countries where American businesses might not receive as favorable treatment.

Concerning each Annex-

  • Wine/Distilled Spirits - don't see much of a problem here.
  • ICT products and ITE products - the section on cryptography troubles me. It says Parties shall not require the manufacturer/supplier of such products to provide technical details of implementation, private keys, of other secrets of the product unless the sale/distribution/use of it is by or for a government of the Party. In essence, it allows Parties to ban encryption technology unless the government is given knowledge or tools to decrypt the data, a disturbing privacy violation. Oh, and that requirement doesn't apply if it relates to central banks or financial institutions/markets.
  • Pharmaceuticals - it's good that condition of sale/distribution can rest in clinical trial data, manufacturing quality, labeling safety, and other matters that might affect consumer health/safety. But the Annex specifically says no requirement shall be made for financial data concerning marketing or pricing data when determining condition of sale/distribution of the pharmaceutical. Furthermore, any product requiring reauthorization to market will be allowed to remain on the market pending the decision. Market authorization from the manufacturing country is not a requirement for market authorization in a Party's territory, which is strange. This is a red flag concerning pharmaceuticals- lack of financial data requirements and allowing drugs to be manufactured in a cheap region for market authorization in TPP areas.
  • Cosmetics - interesting to see that market authorization will be given to "shade extensions" or "fragrance variants" of cosmetic products unless there is a significant health/safety concern. Most of this Annex deals with ensuring reviews take place, standards are met, and that cosmetics generally pose a less potential risk to health/safety than pharmaceuticals. Like pharmaceuticals, no marketing or pricing information will be required for authorization. Animal testing is not a requirement for determining safety unless there is no valid alternative to assess.
  • Medical Devices - there's an error in the text because #4 in this Annex is a copy of #4 of the cosmetics Annex. Whoops! Otherwise, this section suffers from the same problem the pharmaceutical Annex does: marketing, pricing, and financial data are not required in determining market authorization. Another red flag for the medical industry.
  • Proprietary Formulas - nothing out of the ordinary that I can see.
  • Organic products - this Annex is pushing for Parties to recognize as organic the products of another Party, ie establishing equivalence amongst TPP members. This concerns me because it could lower the standards on imports from the USDA National Organic Program levels. The Annex tries to push the "objective" of the standards rather than the standards, themselves, much like the sanitary/phytosanitary Article seemed to do in relation to scientific justifications.

All in all, this Article has good from a free trade perspective, but bad from a medical cost concern and organic foods concern. There may be concerns with wines/distilled spirits, but I doubt such would significantly harm Americans.


Chapter 9 - Investment

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Defines the scope of the chapter in relation to investors and investments tied to government entities. [Article 9.1 and 9.2] This Article is trumped by any other Article in the TPP. Bond posting requirements for cross-border service in and of themselves. [Article 9.3]

Parties shall treat each other equally with respect to investment management/acquisition/conduct/operation/sale/etc in its territories (national treatment). [Article 9.4] Furthermore, Parties will treat each other equally with respect to non-Parties as well (Most Favored Nation (MFN) treatment) except with respect to international dispute resolution. [Article 9.5] Ensures the international minimum standard of treatment of aliens is recognized by all Parties meaning fair/equal judicial proceedings and police protections. [Article 9.6]

Treatment extends to loss of investment due to armed conflict or civil strife by another Party, the result of which results in restitution/compensation towards the investor whose investment was taken/destroyed. [Article 9.6bis] Investments can be taken for expropriation by a Party if it serves the public, is non-discriminatory, is done with due process and appropriate compensation. Compensation must be immediate, fair market value plus interest as a commercially reasonable rate. IP rights and their revocation/limitation do not follow this rule. [Article 9.7]

Capital, profits, dividends, interest, capital gains, royalties, management fees, technical assistance fees, proceeds of sale of part/whole of an investment, payment under contract (including loans), and payments arising out of dispute can be freely and immediately transferred between territories of Parties. Transfers related to bankruptcy, securities/futures/options/derivatives, criminal offenses, financial reporting/record keeping that assists law enforcement, and anything ensuring judicial compliance doesn't apply here. [Article 9.8]

No Party may force any kind of "performance requirements" related to certain export levels, achieving levels for domestic production, accord preference to goods in their territory, restrict sales based on volume/value of exports or foreign exchange earnings, to adopt given royalty rates or contract durations, etc. Likewise, no advantage will be given to achieving levels of domestic content, purchases of goods produced in one's own territory, relate to the volume/value of exports, etc. IP rights lie outside of this Article and, as such, cannot be used by Parties without authorization as defined in Article 31 of the TRIPS Agreement. Practices protecting human/animal/plant life/health, conservation of exhaustible resources, govt procurement, requirements on content of goods to qualify for preferential tariffs/quotas, etc also don't apply. Measure to protect public welfare are ok unless they arbitrarily or unjustifiably disguise restriction on intl trade/investment. [Article 9.9]

Parties shall not require investments appoint persons of any particular nationality or have a majority of the board of directors (or equivalent) be a particular nationality or resident of a territory if it impairs the investor's ability to control their investment. [Article 9.10]

National Treatment, MFN Treatment, and the nationality non-requirements from earlier sections do not apply to govt procurement or subsidies provided by govt loans. Also, national treatment and MFN treatment follows TRIPS standards. [Article 9.11]

Investors screwed out of a guarantee/contract with another party in another Party's territory can go after them. [Article 9.12]

Special formalities like residency requirements are allowed under nation treatment if it doesn't materially impair protections of investors of another Party. Investors of other Parties may also be required to share info on the investment for info/statistical purposes (will be kept confidential). [Article 9.13]

Parties may deny benefits of this chapter if the investor is a non-Party member or member of the denying Party and has no substantial business activity in any territory other than the denying Party. [Article 9.14]

Investors are beholden to Party objectives in regards to environmental, health, and corporate social responsibility based on internationally recognized standards. [Article 9.15 and 9.16]

Investment dispute should start with consultation/negotiation in writing, which may include 3rd parties, and given 6 months to try and work out. Then there will be 90 days notice before a claim of arbitration with proper specifics (claimant, legal basis, relief sought, etc) be submitted under this section. Claims must be done under the ICSID Convention/Rules of Procedure for Arbitration/Additional Facility Rules, UNCITRAL Arbitration Rules, or any other arbitral institution if both parties agree to them. [Article 9.17 and 9.18] Each Party to this agreement consents to ISDS arbitration. [Article 9.19]

Claims must be less than 42 months old to be submitted. Interim injunction relief is allowed before judicial/administrative tribunal convenes as long as its sole purpose is to preserve claimant's rights/interests during pendency of arbitration. [Article 9.20]

3 arbitrators will be chosen to preside, with the Secretary-General appointing them, and will be chosen within 75 days of claim for arbitration date. Both parties must agree on arbitrator appointees. They will have arbitrators follow the Code of Conduct under chapter 28 (Dispute Settlement) unless both parties agree to modifications and whatever other guidelines everyone agrees with. [Article 9.21]

Arbitration will occur at an appropriate location under rules from Article 9.18 or have a place chosen for them. Written and oral submissions to the tribunal will occur and then, if agreed upon, amicus curiae will be allowed by those with significant interest in the proceedings. Objections regarding tribunal competence, jurisdiction, etc. will be treated without prejudice and must be submitted as soon as possible after the tribunal is constituted (with caveats) as long as the claim is one that falls under Article 9.29 (Awards). Objections suspends proceedings and things get sorted out no later than 150 days after the request is received, unless a hearing is involved in which case it can be 180 days. Standard rules of international law apply (prove breach, not innocence), receiving compensation/indemnification in insurance/guarantee contracts aren't allowed defense, and the tribunal can order interim measures of protection for the disputing party. Once decided, the tribunal will transmit the proposed decision/award to the disputing parties who have 60 days to comment on aspects of it and then the tribunal has another 45 days after to issue the final decision/award. If an appellate process comes into existence in the future, everyone will consider grandfathering TPP decisions into those. [Article 9.22]

Many documents related to arbitration will be made public with redactions given to protected information. Protected info is that which the submitter designates. [Article 9.23]

The tribunal will decide issues in accord with the TPP and applicable rules of international law, without prejudice to any consideration of domestic law of respondent when it's relevant to the claim at hand, unless said rules of law are not specified or agreed to, then domestic law may apply. [Article 9.24] If there is confusion over interpretation of the Annexes, the Commission on the issue will give its interpretation within 90 days, otherwise the tribunal decides for itself. [Article 9.25]

If two or more claims are submitted with claims that have a question of law or fact in common and are based in the same circumstances, they may be consolidated into one larger claim pending written agreements by all parties involved. [Article 9.27]

When making final awards, tribunal may only award monetary damages (plus interest) and restitution of property since this arbitration claim deals with proven loss/damage of an investment. Costs and attorney fees also may be awarded. If a claim is deemed frivolous, respondent may be awarded reasonable costs/attorney fees. No punitive damages allowed. Ruling is for the single case and has no effect on any other. Should the losing party not wish to pay, other measures may be taken under international convention. [Article 9.29]

Dispute Settlement may not be made in regards to a Party purchasing public debt of another Party unless the claimant can prove a default/non-payment constitutes a breach of an obligation under Article 9.7. Restructuring of debt as a breach may not be submitted unless it violate national treatment or MFN treatment. That rule no longer applies after 270 days. [Annex 9-G]

Breaches of investment rules given in this section in regards to Chile, Peru, Mexico, and Vietnam can only be brought to dispute settlement if the claimant has not (and will not) submit a claim to a court/administrative tribunal in those countries. [Annex 9-J]

This section sets up the procedures and protocols for investors and investor state dispute settlement. The contents make sense regarding international agreements. If anything, it seems to streamline to process a bit from the dispute settlement body (DSB) arbitration we have already. While folks might have issue with the concept of ISDS, I don't see an issue with it in-and-of itself. We already have ISDS under NAFTA and other free trade agreements, believe it or not.

I am not sure how the ISDS provisions here reconcile with those of NAFTA or other agreements. Under NAFTA, a company could sue for "lost profits" on expected investment returns. Under the TPP, however, ISDS can only be used to recover actual proven losses. Based on this difference and Article 1.2 which says Parties will work out inconsistencies between this and other agreements as needed, it remains to be seen how this will work out. But ISDS here does not seem to be as bad as people seem to think it may be.


Chapter 10 - Cross-Border Trade in Services

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section deals with cross-border "trade in services" by service suppliers, including production/distribution/marketing/sale/delivery of a service, purchase/use/payment for a service, access/use of distribution/transport or telecomm networks/services in connection with the supply of the service, and some financial security as a condition for supply of said service. Financial services, govt procurement, services related to the exercise of govt authority, and subsidies/grants provided by a Party do not count. However, investments described in this section will count. Air services (flights, repair, reservations, etc) are also exempt. There is also no obligation of a Party to help other nationals find jobs or work in the other Party's territory. [Article 10.2]

Services and service suppliers will receive national treatment and MFN treatment across applicable levels of govt. [Article 10.3 and 10.4] No Party will adopt/maintain measures limiting the number of service suppliers (numerical quotas, monopolies, exclusives, etc), total value of service transactions/assets in the form of numerical quotas/economic needs test, total number of service operators/quantity of output, or total number of citizens employed in a particular service sector or that a service supplier may employ. [Article 10.5] None of the above 3 sections apply to local govt or specific sectors set out by Parties in its Schedule to Annex II. [Article 10.7] No Party shall required service suppliers to establish or maintain residency/office in its territory as a condition for cross-border supply of service. [Article 10.6]

Parties will ensure all measures affecting services are administered in reasonable, objective, impartial manners- ie, if there are reqs/procedures/standards/licenses/other TBT, measures will have objective/transparent criteria (competence/ability to supply service) and not be a restriction on the supply of the service. If authorization of a service is required, competent authorities will let applicants know in reasonable time approval/denial/status along with reasons for such. Fees can be charged for authorization. Licensing/qualification exams will be scheduled at reasonable intervals. None of this applies to the non-conforming measures (ie, local govt and specifics covered Party's Schedule to Annex II). [Article 10.8]

Parties may recognize education/expertise/licenses/etc from other Parties. Such may be autonomous, but not to MFN levels. If autonomy is allowed, Parties will allow other Parties to demonstrate what should be recognized. Recognition will be non-discriminatory. [Article 10.9]

Service suppliers of another Party may be denied benefits in this chapter if they are an enterprise owned/controlled by a non-Party or non-Party national or if the enterprise is owned/controlled by a Party who has no substantial business activities in the territory of any Party other than the denying one. [Article 10.10]

Parties will be responsive and transparent in responding to inquiries from interesting persons regarding regulations. They'll also allow advance notice and comments on regulations prior to publication, with reasonable time given to do so. [Article 10.11]

Parties will permit all cross-border related transfers and payment freely and w/o delay into/out of its territory. Prevention/delay may occur if it relates to bankruptcy, insolvency, issues with securities/futures/derivatives/options, financial reporting/record keeping of transfers needed to assist law enforcement, criminal/penal offenses, or compliance with judicial orders/proceedings. [Article 10.12]

Parties may consider working together to liberalize air services, ie agreements allowing air carrier the flexibility to decide on routes and frequency of travel. [Article 10.13]

Parties are encouraged to open dialogue with each other in regards to the relevant bodies for various licensing/qualification requirements. Parties may consider temp or project specific licensing/registration based on supplier's home license/professional body membership. Such temporality should not prevent gaining of a real local license. Parties will recognize APEC Engineer and APEC Architect framework licenses and relevant bodies and requirements towards becoming a member of such. Parties will consult with their relevant professional bodies for recommendations concerning when/how to grant temp licenses. [Annex 10-A]

Parties recognize transnational legal service is essential to trade/investment/etc. If Parties wish to regulate foreign lawyers/transnational practices, they shall consider whether such lawyers can practice, if they can appear in various arbitration/mediation proceedings, what ethical/conduct/disciplinary standards are applied to them (as long as they aren't worse than for local lawyers), and what measures are necessary to allow such practice (fly-in, fly-out, use of internet, having a commercial presence, etc). [Annex 10-A]

Parties will establish a Professional Working Group made up of members of each Party to liaise relevant professional and regulatory bodies relating to activities discussed herein. They shall meet annually or as needed. Decisions will affect only Parties that participated in the meeting where the decision took place unless all Parties agree or a Party requests to be covered. [Annex 10-A]

Parties shall move to maintain a level of market openness for express delivery services (ie, UPS/FedEx/DHL/etc) while recognizing postal monopolies in each other's territories (ie, US Postal Service). If a Party thinks market openness is not maintained, it may request consultations on the matter. Suppliers of postal monopoly services cannot subsidize/own any express delivery service with revenue derived from the postal monopoly. Postal monopolies will also not abuse their positions with respect to express delivery services and national treatment/market access guidelines defined earlier. Express services will not be required to function as basic postal service or assess them fees for purpose of funding the supply of another delivery service. Anyone regulating express services must not be accountable to any specific service; such decisions will be non-discriminatory/impartial/transparent and apply to all express delivery services. [Annex 10-B]

This section relates to a myriad of services that one might provide the marketplace. It seeks to establish equal treatment under national treatment and most-favored-nation guidelines while simultaneously seeking to establish reasonable, objective, and impartial measures for professional license/accreditation/etc. of other Parties. That APEC Engineers and Architects get called out as definitively being recognized is pretty interesting to me. Most of the stuff in this section are "mays;" that is to say, guidelines rather than authoritative requirements of implementation.

Possible service restrictions based on enterprise control/ownership could be a double-edged sword for America. News reports discuss China's investment and/or purchasing of US businesses (same with Mid East and other foreign investors), so it's possible that this provision could bite us in the ass. Our current laws don't place a whole lot of restriction on *who* can own or have controlling interest in an enterprise, which means service exports one day may be cut off if another non-TPP Party takes over. In a world of "economic warfare," would it be far-fetched to see China or other party investing billions into American businesses with express purpose of hindering service exports at the same time they get a decent return on their investment locally?


Chapter 11 - Financial Services

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section covers measures by a Party relating to financial institutions of another Party, investors (and their investments) of another Party in financial institutions in Party's territory, and cross-border trade in financial services. Parts of Article 9 and Article 10 are incorporated into this chapter (9.7-9.9, 9.13-9.15, 10.10, and 10.12). Services/activities related to public retirement plans or to accounts/services conducted using financial resources of a Party nor does it apply to govt procurement of financial services, subsidies, or grants with respect to cross-border supply of financial services. [Article 11.2]

Investors and investments of another Party will be given national treatment and MFN treatment down to the regional level of govt (ie state). MFN treatment is ceiling of favorability for TPP and non-TPP Parties but does not encompass intl dispute. [Article 11.3 and 11.4] No Party will adopt/maintain measures limiting the number of financial service suppliers (numerical quotas, monopolies, exclusives, etc), total value of financial service transactions/assets in the form of numerical quotas/economic needs test, total number of financial service operators/quantity of output, or total number of citizens employed in a particular service sector or that a service supplier may employ. [Article 11.5]

Parties shall allows suppliers of financial services to supply such in their territories and allow persons located therein to purchase services from them. Parties don't need to permit financial service suppliers to do business or solicit in their territory, just provide access. Such services may require registration/authorization. [Article 11.6] Financial institutions of another Party may provide new services if the Party would allow its own institutions to supply said service (pending authorization in reasonable timeframe). [Article 11.7]

No Party shall require Parties to furnish or allow access to info related to financial affairs/accounts of customers or suppliers or another other confidential info that would impede law enforcement or be contrary to the public interest or legit commercial interest of an enterprise. [Article 11.8]

No Party shall require natural persons of any particular nationality be senior management/essential personnel nor more than a minority of the board of directors be nationals/residents of the Party. [Article 11.9]

Previous sections will not apply to local govt nor regional/central govt as defined in Schedule to Annex III. Also doesn't apply to sectors as defined in Schedule to Annex III, National Treatment defined in Article 18.8 (Intellectual Property), or applicable parts of the TRIPS Agreement. [Article 11.10]

With exceptions from other Articles, nothing prevents Parties from adopting/maintaining measures for safety/security/integrity/responsibility of financial institutions. This includes measures in pursuit of monetary/credit related policies- including exchange rates. Barring other free transfer Articles incorporated here, financial institutions may have transfers prevented/limited to preserve safety/soundness/integrity/responsibility to a Party. Nothing shall prevent compliance with laws/regulations consistent with this chapter. [Article 11.11] Parties may recognize prudential measures (measures aimed at mitigating risk) of another Party or non-Party. [Article 11.12]

Parties recognize transparent regulations and policies governing financial institutions/financial service suppliers are important. They shall try to publish regulations/proposals in advance and allow comments within reasonable timeframes. Such will be publically available. Applications related to the supply of a financial service will be administered within 120 days or notify applicant of delay. [Article 11.13]

Any requirements for self-regulatory organization membership/participation will comply with national treatment/MFN sections. [Article 11.14]

Parties shall grant financial institutions in its territories access to payment/clearing systems operated by public entities as well as funding/refinancing facilities. This does not mean access to Party's lender of last resort facilities. [Article 11.15]

Parties will try to maintain/develop regulatory procedures to expedite offering insurance services of licensed suppliers including, but not limited to, allowing products to be introduced, not requiring product approval/authorization of insurance lines, or imposing limits on number/frequency of product introductions. [Article 11.16] Parties will try to avoid imposing arbitrary requirements on the performance of back-office functions of financial institutions. [Article 11.17]

A committee will be established to supervise implementation of this chapter, consider issues regarding financial services, and participate in dispute settlement procedures. It will meet annually or whenever it decides. [Article 11.19] Parties may request consultations with other Parties ad hoc concerning matters herein related to financial services. They may request info on non-conformity at various levels of govt. [Article 11.20]

Parties agree that in dispute settlement matters, panelists shall have expertise in financial service law/practice. Panels may be established to discuss whether exceptions in Article 11.11 are valid defenses to a claim without consultations, with report given within 150 days. [Article 11.21]

If an investment dispute claim is submitted challenging regulation/supervision of a financial institution/market/instrument, expertise in financial matters will be taken into account during arbitrator appointments. If the respondent invokes Article 11.11 (Exceptions) as a defense, both parties will submit in writing to authorities on the matter their side of the story. Said authorities will decide on the matter within 120 days and such will be binding on the arbitrating tribunal whose decision/award must be consistent with it. [Article 11.22]

Parties will allow financial institutions in other Party territories to provide investment advice and portfolio management services (excluding trustee/custodial/execution services not related to managing) as long as the institution adheres to each Party's "collective investment scheme." For the United States, that means being a company registered with the SEC. Info may be transferred electronically or otherwise into/out of territories for data processing as long as it adheres to Party measures that protect personal data/privacy/confidentiality of individual records/accounts. [Annex 11-B]

Certain additional measures/regulations will go into effect if a Party's postal service offers insurance/insurance services (Japan, for example, does this). [Annex 11-B]

Payment services for payment card transactions (ie debit/credit/prepaid cards, etc) shall be allowed. Registration/authorization with relevant authorities may be required. Suppliers of such cards may need to offer service in Party's territory and/or maintain an office/representative therein. This is business-to-business payment only. Personal data/privacy/confidentiality will be maintained as Party's decide and any fees associated with these transactions may be regulated. [Annex 11-B]

Any new regulations being developed in relation to this section may allow commenting on. [Annex 11-B]

The Dept of the Treasury is the authority responsible for all matters involving banking/securities/financial services other than insurance. The USTR and Dept of Treasury together cooperate as authority on insurance. [Annex 11-D]

This section deals with financial services and suppliers of such services. Honestly, it seems pretty fair. Like other TPP chapters, it covers national/MFN treatment, transparency in regulations and measures implemented by Parties, and generally will allow US financial institutions greater expansion overseas (and vice-versa, but I'm not sure how likely that is). There was concern that this section of the TPP allowed Wall St to challenge any future regulations/legislation that may be directed towards it under ISDS, but the text does state that prudential measures are allowed by Parties and that no awards to damages in respect to those measures will be given. I think my biggest complaint here is that the payment card transaction requirements don't go so far as to make my Visa work all over Japan when I visit for martial arts practice (works some places but not others).


Chapter 12 - Temporary Entry for Business Persons

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Covers measures that affect the temporary entry of business persons of a Party into the territory of another Party. Measures here don't apply to measures related to seeking employment in another Party territory or measures regarding citizenship, residency, etc. Nothing prevents Parties from regulating entry of other Party nationals when it comes to integrity/security/etc and the border. [Article 12.2]

Applications for an immigration formality will be processed ASAP. Fees charged will be reasonable and won't unduly impair/delay trade in goods/services. Granted applications will include conditions of stay (length allowed, etc). [Article 12.3] Commitments to temporary entry of business people will be spelled out in Annex 12-A. If one follows said application procedures and meet requirements, they will be granted access. Temp entry does not mean a person meets any other licensing/operating requirements including code of conduct. Entry may be refused if it might adversely affect labor disputes in progress or the employment of a natural person involved in such dispute. [Article 12.4] Parties are committed to each other in context of the APEC Business Travel Card program. [12.5]

Parties will publish (online if possible) requirements for temp entry including paperwork needed and timeframe for processing along with a way for interested persons to inquire into such measures. [Article 12.6]

A committee will be established to review implementation and operation of this chapter and consider opportunities to improve upon it. They'll meet every 3 years or whenever they agree to. [Article 12.7]

Parties will share and cooperate on how to best handle visa processing and border security. This includes sharing experience with border tech, expediting certain personnel, etc. [Article 12.8]

No provision of this chapter shall impose any obligation on a Party regarding its immigration measures. [Article 12.9]

There will also be no dispute settlement allowed for refusals of temp entry unless all other avenues of resolution have been exhausted- that is to say, if a final determination on the matter hasn't been issued within a reasonable period of time after proceedings to such take place. [Article 12.10]

This section is pretty straight forward when it comes to expediting temporary entry of business persons into Party territories. That there is even an option for dispute settlement in this matter makes no sense to me. The lack of defining "reasonable time" in this matter could be a burden. This is a rather minor quibble, though, since I don't suspect such dispute settlement to occur over this issue with any kind of frequency.


Chapter 13 - Telecommunications

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This chapter covers any measure applying to access/use of public telecomm services, obligations regarding suppliers of public telecomm services, and any other measure relating to telecomm services. It does not apply to broadcast/distribution of radio/TV outside of transparency defined in 13.22 and access/use as discussed in 13.4. Parties cannot compel enterprises to build/lease/operate/etc a telecomm network/service not offered to the public generally, require broadcast/cable facilities be available as a public telecomm network, or prevent a Party from prohibiting persons operating private networks from using its private network to supply a public telecomm network/service to 3rd parties. [Article 13.2]

Parties recognize value of competitive markets to deliver choice and enhance consumer welfare. As such, regulation may not be needed if there is effective competition or if a service is new to a market. Parties recognize regulatory needs/approaches differ from market to market. Parties may engage in direct regulation in anticipation of issues or to resolve a market issue, may rely on the role of market forces (particularly with segments that may be competitive with low barriers to entry), and may use other appropriate means that benefit the long-term interest of end users. Still, when engaging in direct regulation, Parties may forbear from applying such to a service if the telecomm body or other competent body determines enforcement is not needed to prevent unreasonable/discriminatory practices, not needed to protect consumers, and is consistent with public interest (ie, promoting/enhancing competition between suppliers). [Article 13.3]

Enterprises of other Parties may access/use any public telecomm service in another Party's territory with flexibility in purchase/lease of equipment relating to such service. They may also use the operating protocol of their choice. Parties will ensure cross-border connection is available for data transfer while maintaining security/confidentiality requirements that protect personal data as long as they aren't a disguised restriction on service. No conditions for access/use will be imposed outside of those to safeguard service responsibilities and protect technical integrity of public telecomms. [Article 13.4]

Parties will ensure suppliers of public telecomm services provide interconnection with suppliers of another Party. Party's authoritative regulatory body will set reasonable rates. Parties will take reasonable steps to protect confidentiality of commercially sensitive data and data of end users. Telecomm providers will ensure number portability and access to numbers on a reasonable and non-discriminatory basis. [Article 13.5] Parties will work to be transparent and set reasonable rates on international roaming and may also work to minimize impediments to use of tech alternatives to roaming so consumers can access service with their device of choice. Parties may chose to adopt/maintain wholesale rates on intl roaming services and will give those rates to suppliers of other Parties (MFN rates don't necessarily apply; MFN is satisfied with access to wholesale rates in general). Voice/data/text rates will be offered to consumers of other Parties when they visit with info kept fairly up-to-date. Nothing here requires Parties to regulate rates/conditions for international mobile roaming services. [Article 13.6]

Major service suppliers must treat suppliers of other Parties equal to subsidiaries/affiliates/non-affiliates with regards to availability/provisioning/rates/quality/etc and availability of technical interfaces for interconnection. [Article 13.7]

Parties will maintain measures to prevent major suppliers from being anti-competitive, which includes in particular cross-subsidization, using info from competitors with anti-competitive results, and not making available certain commercially relevant info on a timely basis. [Article 13.8]

Resale of service shall not be prohibited. Major suppliers must offer for resale at reasonable rates to suppliers of other Parties the same services it offers retail end-users without unreasonable/discriminatory conditions or limits on resale (minus resale of service that is only applicable to a limited category of recipients). Parties will determine which services must be offered for resale and allow requests for resale if they choose based on need for competition or long-term interest to end-users. [Article 13.9] Party's regulatory body with respect to telecomms shall have authority to require major suppliers to offer access to network elements on an unbundled basis. [Article 13.10]

Major suppliers with provide interconnection as feasible points, under non-discriminatory terms/rates, and at quality equal to its own services in a timely manner as economic feasibility allows. Parties will make public applicable procedures for interconnection negotiations, rates, terms/conditions, etc. [Article 13.11] Major suppliers will also provide leased circuit services to suppliers of other Parties at reasonable rates in non-discriminatory fashion. [Article 13.12] They will also provide suppliers of other Parties physical co-location equipment necessary for interconnection or access to unbundled network elements on a general availability offer, on a timely basis, and on terms/rates that are reasonable/non-discriminatory. If co-location isn't practical, alternatives will be provided. Parties will determine what suppliers are bound by the interconnection co-location obligations. [Article 13.13] Parties will also ensure access to poles/ducts/conduits/right-of-ways/etc owned/controlled by a major supplier to suppliers of other Parties at reasonable rates and non-discriminatory terms. Parties may determine what poles/ducts/etc must be made available based on economic/competitive factors. [Article 13.14] International submarine cables access will be allowed by Parties as well at physical landing stations. [Article 13.15]

Parties will ensure telecomm regulatory bodies are separate from suppliers to ensure independence/impartiality. The body may not hold financial interest (but other parts of govt may). Regulatory body decisions/procedures are impartial with respect to all market participants. National govt ownership of a supplier trumps like service of another Party when it comes to favorability. [Article 13.16]

Parties can decide on what (if any) universal service obligations they wish to maintain. If such a service is chosen, it must not be more burdensome than necessary. [Article 13.17]

If licenses are required, the conditions/criteria/procedures for such will be public and applicants receive notice of denial/revocation/etc of said license(s). [Article 13.18]

Party management of market scarce resources (ie, spectrums/frequencies/etc) will be public outside of those for specific govt uses. Assigning/managing frequencies are not per se inconsistent with market access or investor operation detailed under 10.5 and 10.2.2. Spectrum allocations will be made openly/transparently using market-based approaches (including auctions). [Article 13.19]

Party's competent authority has the power to enforce this section including implementation of sanctions and/or license suspension/removal. [Article 13.20]

Parties will ensure telecomm regulatory bodies can handling disputes regarding measures based in this article and review of interconnection requests. Legally protected interested adversely affected by a determination/decision of the regulatory body may be appealed for reconsideration. [Article 13.21]

When the regulatory body seeks input, the proposals will be made public, include explanations, provide the ability to comment on, and respond to all significant/relevant issues. Other measures related to telecomms like tariffs, tech specs, permits, etc will also be made public. [Article 13.22]

Parties will not prevent suppliers from choosing the tech they wish to use to supply their services outside of reqs to public policy interest. When a Party finances the development of advanced networks (included broadband), it may make its financing conditional on the use of tech that meet its specific public policy interest. [Article 13.23]

This chapter will trump others in cases of inconsistency. [Article 13.24] Parties will try and follow international standards. [Article 13.25]

A committee will be setup to review/monitor the implementation and operation of this chapter, discuss related issues, etc. Representatives of relevant entities other than the Parties (ie, private sector) may be invited as they have expertise relevant. [Article 13.26]

There is good and bad in this section when it comes to telecommunication services. For the most part, I assume the FCC to be the regulatory body here in America concerning these issues. On the plus side, we have greater transparency, resale, interconnections, and other content that does what any decent trade agreement should: remove barriers. However, the bad comes into play when you consider the current state of America's telecomm industry. There are only a few major suppliers of cell and internet service, which gives them great economic power. In this section, Article 13.3 allows for a competent body that is non-regulatory to decide if a regulation or enforcement is not necessary. That's kind of ass-backwards when it comes to regulatory bodies; the sector being regulated should not be allowed any circumstance to forbear the regulators.

Then there is Article 13.4 which says security/confidentiality "may" be allowed if the measures to ensure such are not arbitrary of unjustifiable or a disguised restriction on service. Security and confidentiality should always be required in telecommunications. The debacle with the NSA proves this. I'm not sure if the lack of a hard approach to security/privacy is a result of America's push towards intelligence gathering or that of other Parties, but it doesn't make much sense to me. I might be able to be placated on this if I knew what constituted arbitrary/unjustifiable to the fullest extent of the law, but going on a case-by-case basis leaves me worried.

I also worry that Article 13.23 might give US suppliers greater freedom with technologies like deep packet inspection that allow them to gather data or subvert privacy mechanisms of consumers. "Legitimate public policy interests" is not strong enough wording to prevent this. Seeing privacy maintained is crucial to both social interests and economic success.

Cheaper international roaming for everyone would be nice, but it's a minor quibble.

Finally, in Article 13.16, it says regulatory decisions/procedures are impartial with respect to all market participants. I would like to think network neutrality (which I support) fulfills this requirement, but this section could be interpreted as being unfair towards some market participants... like every telecomm provider that opposes it for whatever reason. I would not like it if the TPP ruined network neutrality here in the US.


Chapter 14 - Electronic Commerce

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section pertains to ecommerce. Parties recognize its importance and want to promote consumer confidence in it while avoiding unnecessary barriers to its use/development. This section does not apply to govt procurement or info held/processed by or on behalf of a Party relating to other sections (ie, investment, cross-border trade, and financial services). [Article 14.2]

No Party will collect customs/duties on ecommerce transmission between persons of different Parties. Taxes/fees/etc on the content of the electronic transmission are still allowed. [Article 14.3]

Digital products/works of other Parties will receive the same favorable treatment as digital products of the Party in question. This doesn't subvert IP, doesn't apply to grants/subsidies provided by govt, and doesn't apply to broadcasting. [Article 14.4]

Parties will maintain a legal framework governing electronic transmissions consistent with principles from UNCITRAL Model Law on ecommerce (1996) or the UN Convention on Use of e-communications in international contracts (2005). Parties shall try to avoid unnecessary regulatory burden on electronic transmissions. [Article 14.6]

Unless stated by its law, Parties will recognize validity of e-signatures. Determining authentication methods for a transaction must be allowed nor will preventing parties from judicial review that shows such transactions comply with legal requirements around electronic authentication. Parties may, however, require performance standards on authentication and will encourage interoperable electronic authentication. [Article 14.6]

Parties recognize importance of transparent measures to protect consumers from fraudulent/deceptive commercial activities in ecommerce. Parties shall adopt/maintain consumer protection laws as such. Cooperation as defined in Article 16.7.5-16.7.6 includes cooperation with online commercial activities in regards to cross-border protection of consumers. [Article 14.7]

Parties recognize importance of protecting personal info in ecommerce and will adopt/maintain a non-discriminatory legal framework to do so that takes into account principles/guidelines of relevant international bodies. Parties will publish info on the protections they provide along with remedies for individuals/businesses. Parties will work to develop mechanisms that promote compatibility between themselves since each Party handles legal approaches differently. [Article 14.8]

Trade administration docs should be publically available electronically and submission of them electronically is legal equivalent to submitting paper versions. [Article 14.9]

Parties recognize benefits to consumers in the realm of internet choice and devices used to connect, subject to reasonable network management. [Article 14.10]

Cross-border transfer of info by electronic means is covered by all Parties for business related to covered persons unless justifiably required. Restrictions won't be arbitrary, though. [Article 14.11]

International internet connection suppliers can negotiate with suppliers of another Party on a commercial basis. [Article 14.12]

Parties may have their own requirements regarding use of computer servers/storage including security/confidentiality of communication reqs. No req shall be made to use/locate such servers/storage in a Party's territory as a condition for doing business there. Any measure that does so must not be arbitrary/unjustifiably discriminatory or require greater server/storage power than required. [Article 14.13]

Unsolicited commercial electronic message suppliers must allow recipients to prevent ongoing reception, require consent to receive (based on Party's laws/regulations), or otherwise provide for minimization of such messages. Parties will provide recourse for failure to comply and will try to cooperate with each other in cases of mutual concern. [Article 14.14]

Further cooperation amongst Parties will cover overcoming SMS obstacles, exchanging info on regulatory experience/practices/enforcement/etc, encourage private sector to self-regulate in ways that foster ecommerce, etc. [Article 14.15]

Parties recognize importance of building cybersecurity response capabilities and using existing collaboration mechanisms to mitigate digital maliciousness. [Article 14.16]

No Party shall require transfer of/access to source code of mass market software/products containing such software as condition of import/distribution/sale/etc in its territory. This doesn't apply if it's used by critical infrastructure. Parties may also require code changes to comply with local laws/regulations. [Article 14.17]

For a chapter that is meant to cover ecommerce and consumer protection, there is an awful lot of non-obligatory content here. Parties recognize numerous situations and may do certain things, but the lack of concrete action is bad for a trade agreement. Having a legal framework in Article 14.8 is a good start, but the specifics in regards to compliance are lacking. There are no international standards or guidelines for the protection of personal information- that's part of the problem! As such, when 14.8's footnote talks about comprehensive privacy, data protection laws, etc, I have no idea what that entails. My thoughts on data security standards differ greatly from those of other participants where security standards may cost them money. I want to see more encryption, more network security, more log analysis, more of what makes security worthwhile. Such goes against the Article footnote allowing voluntary undertakings by enterprises relating to privacy. Here in the US, I don't think that will trump any other privacy laws we may have or may implement, but for international businesses, I'm not sure if that can be guaranteed. Judicial outcomes related to such privacy issues will seek to be recognized between Parties, but are not guaranteed to be as such.

Article 14.10's discussion on internet access suppliers offering subscribers certain content on an exclusive basis would not violate the benefit of choice consumers have on the internet. In other words, if Comcast offers up a video streaming service to its subscribers, that is not a violation of this principle. I'm less concerned about that than I am the "subject to reasonable network management" component. There have been stories in the US of throttling network speeds for various reasons; any provision that suggests "reasonable network management" with no qualifications raises this red flag. Could Verizon throttle Netflix? Could Comcast slow down torrents? Enshrining such vaguery into a trade agreement is not good.

Article 14.14 is, honestly, worthless from an email spam perspective. It advocates opt-out or opt-in OR minimal sending. It's not an "and" system, but one of least good in relation to junk mail. Why even include it in the first place if minimization of such messages is allowed?

There are a couple good pieces here- namely the cross-border transfer of information and removing any server/storage requirements in the territory of doing business (ie, US businesses in Mexico don't need to use Mexican server/storage facilities). But overall, I don't think that level of good outweighs the bad from a privacy/security standpoint. Considering a vast majority of fraud cases in the US relate to level 4 card merchants who do not have any real data privacy/security standards to follow, the lack of teeth in this article tells me how little care the writers had for such measures.


Chapter 15 - Government Procurement

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section covers government procurement measures of goods/services as defined in the Schedule to Annex 15-A that are purchased/rented/leased/etc on contractual basis at a value at or greater than the value also defined in Schedule to Annex 15-A (130,000 SDR's for goods/services and 5,000,000 SDR's for construction services where 1 USD is about 1.38 SDR's). Exclusions apply, including purchase/rental of existing land/buildings/immovable property, non-contractual agreements (grants/loans/equity infusions/etc), fiscal agency services, services related to sale/distribution of public debt, public employment contracts, procurement funded by intl money or for providing intl aid (including stationing of troops), and procurement of goods/services outside Party territory for consumption outside Party territory. Schedule to Annex 15-A covers a number of pertinent pieces of info for each Party including who central govt is, what sub-govt entities are covered, goods covered, construction services covered, etc. Parties must comply with this agreement and must not try and cheat the system by dividing/separating a procurement into multiple-parts to avoid obligation. Parties can still develop new procurement policies. For valuation, entities will estimate maximum total value over entire duration including fees, commission, interest, option clauses, etc. [Article 15.2]

As long as it's not arbitrary/unjustifiably discriminatory between Parties, they and their procuring entities can adopt/maintain measures protecting public works/order/safety/life/IP/good or service of the disabled, non-profit, and prison labor. This includes environmental measures. [Article 15.3]

Parties afford each other and their procuring entities National Treatment relating to goods/services/suppliers. No discrimination may be made against suppliers on basis of foreign affiliation or due to goods/service offered is that of another Party. An open tendering procedure will be used barring exceptions as will rules of origin (ie, Article 3 and other agreements). Offsets will not be allowed. Parties will try to publish procurement info, notices, etc electronically using easily accessible technology. [Article 15.4]

Developing country Parties will be afforded a transitional period with measures put in place to ease them into these obligations as set out in the Schedule to Annex 15-A. [Article 15.5]

Any measures related to procurement- including changes- will be published promptly via the means outlined in the Schedule to Annex 15-A. Parties will respond to inquires relating to such publications. [Article 15.6]

With exception to limited tendering, procuring entities will publish a notice of intended procurement via means outlined in the Schedule to Annex 15-A. If electronic, they will be free of charge and available through a single electronic portal. Notices will include procuring entity info (name/address/etc), description of the procurement, time-frame for delivery, final dates of submission, languages allowed other than official language of procuring Party, any conditions for participation (documents/certs/etc), and so forth. If a limited number of suppliers are to be invited to tender that will also be made known. Fees may be charged for tender documentation. Each Party will try to use English as the language for publishing notices. Parties are encouraged to publish notices as early as possible in each fiscal year. [Article 15.7]

Procuring entities will limit any conditions for participation to those that ensure legal/financial capacities and the commercial/technical abilities to fulfill requirements. Conditions cannot including previous awarding of 1+ contracts or prior work experience in territory of that Party, but may require prior relevant experience if essential to meet requirements. In assessing conditions of participation, procuring entities will evaluate financial capacity and commercial/technical abilities of supplier inside/outside the Party's territory and base its evaluation solely on conditions it laid out in notices/tender documentation. Suppliers may be excluding if bankrupt/insolvent, gave false declarations, have significant/persistent deficiencies in performance of requirements, or fail to pay taxes. [Article 15.8]

Parties/procuring entities may maintain registration system where suppliers are required to register, but they cannot create unnecessary obstacles or prevent/delay the inclusion of suppliers of other Parties. Notices for selective tendering shall be published sufficiently in advance and allow all qualified suppliers to submit a tender unless notice states a limited number of suppliers and what that criteria/justification is. They may establish/maintain multi-use lists (ie, list of pre-qualified potential suppliers) provided it publishes annually (or is continuously available electronically) a notice inviting suppliers to apply for inclusion. Said notice will cover the list's category of goods/services, conditions for participation, names/addresses, period of validity of the list, deadlines for submission, and indication said list may be used for procurement related to this chapter. Suppliers applying shall not be excluded from consideration unless the entity cannot complete examination of application in time allowed. Suppliers will be notified of decision on application, including rejection. [Article 15.9]

Limited tendering (ie, entering into a supplier contract w/o competition) is allowed as long as it's not done to avoid competition, protect domestic suppliers, or in a way that discriminates. It's only allowed if prior notices go unanswered, not tenders can meet needs, or tenders were collusive. It can also be used if the good/service is only available from a particular supplier with no reasonable alternative because it's for artwork, involves IP protections, or there simply is not competition for technical reasons. Additional deliveries by an original supplier are ok if a change isn't feasible due to technical limitations (software compatibility, etc) or cause significant inconvenience/cost to entity. Commodity purchases are ok as are prototypes assuming prototyped products then go through regular process to build. Any additional construction services needed to complete reqs of a project that couldn't be done due to unforeseeable circumstances apply here as long as cost is less than 50% original value. Purchases made in advantageous conditions are ok (like from bankruptcies) but not for routine purchases. Winners of design contests are allowed if contest followed chapter rules. Or if extreme urgency makes open tender just not possible. Any limited tender award will have lots of documentation. [Article 15.10]

Procuring entities may conduct negotiations on procurement if notice said they were allowed and no tender has the clear advantage on fulfillment. Negotiations will be conducted to a common deadline and by criteria given in the notice. [Article 15.11]

Procuring entities won't prep/adopt/apply any tech specs or conformity assessment procedures meant to create unnecessary obstacles to trade. They can set tech specs in terms of performance/functional reqs rather than design and base such on standards that exist (intl/natl/building codes/etc). No tech specs will require or refer to a particular IP unless there's no other way of describing such reqs and the entity includes words like "or equivalent" in description. Entities may conduct market research in developing specs for a particular procurement. This chapter doesn't stop entities/Parties from prep/adopt/applying tech specs to protect sensitive govt info, conserve natural resources, or protect the environment. [Article 15.12]

Procuring entities will promptly make available necessary documentation to interest suppliers including nature/scope/quantities/specs/dates/etc. When establishing submission dates, entities will consider complexity of project. Prompt replies will be given to requests. If mods to the procurement are made prior to award, entities will let all participating parties know and give adequate time for resubmissions. [Article 15.13]

Sufficient time will be given for suppliers to obtain tender documentation and submit response, including complexity and non-electronic submission needs (snail mail). Selective tendering shall be at least 25 days from notice publication, 10 if super urgent. Open tendering will be at least 40 days from notice publication by can be reduced by 5 days for each of these conditions: electronic publication of notice, electronic publication of documentation, and electronic submission accepting. Urgent procurement must use commercial goods/services to be allowed as "urgent." [Article 15.14]

Procuring entities will treat all tenders fairly, impartially, and confidentially. If a supplier is allowed to correct an unintentional error, all suppliers must have that opportunity. Barring bad for public interest, the most advantageous supplier will get the award based on evaluated contract criteria, or the lowest price if that's the sole criteria. Options/cancelling/modifying/terminating awards to avoid obligations are not allowed. [Article 15.15]

Contract winners will be promptly notified. Others may be notified of loss. The procuring entity will promptly publish in an official manner the winner, contract description, value, date, etc. Such data will be kept for at least 3 years after contract award. [Article 15.16]

Parties can request info of each other to ensure a procurement was conducted fairly/impartially/by the chapter rules. Such info won't be disclosed to any suppliers by Party receiving unless giving Party agrees. No procuring entity will disclose info that would prejudice legitimate commercial interests of or competition for a supplier unless required by law (including protecting IP). [Article 15.17]

Parties will have criminal or administrative measures to address corruption in govt procurement. May include temp/permanent removal of procurement eligibility of a Party. Conflicts of interest over procurement will also strive to be solved. [Article 15.18]

Parties will have 1+ impartial administrative/judicial authority independent of procuring entities to review challenges/complaints by suppliers (with an interest) regarding this chapter. Party will encourage supplier and procuring entity to work things out through consultations in an impartial/timely manner. No prejudice will be given to supplier's future procurements. If a breach is determined, Party may limit compensation for loss/damages to either costs reasonably incurred in tender prep or in bringing the complaint or both. If the review authority is not a court, certain procedures will be followed in writing and review. Otherwise, Parties will have procedures to keep supplier able to participate. All measures in this section may be overridden if there are strong interests to do so, including public interest. [Article 15.19]

Changes to the Schedule to Annex 15-A will be made in writing and have compensation if necessary. No compensation needed if changes are purely formal/minor changes like names, mergers, website references, etc. If a Party would be affected, they will notify other Parties of any objection within 45 days. Consultations will be used to try and rectify objections. [Article 15.20]

Parties recognize importance of SME's (small-medium enterprises) in economic growth/employment and importance of their participation in govt procurement. Measures providing preferential treatment to SME's will be transparent (includes criteria for eligibility). To extent possible, Parties shall provide comprehensive procurement-related info in a single electronic portal, make tender documentation free, conduct procurement through electronic means and/or new technologies, consider size/design/structure of the procurement and possibly sub-contracting by SME's. [Article 15.21]

Parties recognize cooperation key to intl procurement markets. Parties will strive to cooperate more, especially with SME's, sharing frameworks/best practices/statistics, increasing electronic systems, etc. [Article 15.22]

A committee will be established by Party members. Shall meet on request of members to discuss cooperation, SME participation, transitional measures, and discussion further negotiations. [Article 15.23]

Parties may hold future negotiations to improve market access/coverage, revise thresholds/formulas in Annex 15-A, and in reducing/eliminating discriminatory measures. This will have no later than 3 years after TPP goes into effect. Parties may also cover state/local govt procurement during negotiations. [Article 15.24]

A large number of US agencies are affected by this, including the DoA, DoC, DoEd, DoEn, DoHH, DoHS, DoHUD, DoI, DoJ, DoL, DoS, DoT, DoTreas, VA, EPA, EO of the President, ExIm Bank, Federal Reserve, FEC, FDIC, FCC, FTC, GSA, Nuclear Regulatory Commission, SEC, SBA, SSA, and others. But there are limits with a few of these departments. For example, DoD nuclear ordnance/space vehicles/specialty metals/weapons/guided missiles/etc are all not covered. Likewise, nothing supporting the safeguarding of nuclear mats/tech with the Department of Energy are covered. No state/local govt procurement is covered. Certain other entities like the Tennessee Valley Authority, Rural Utilities Service, and Western Area Power Administration are covered for procurement over $250k (goods/services) or 5 million SDR's (construction). RUS won't impose domestic purchase reqs as a condition of financing any power/telecomm proj above those thresholds. Certain other US military-related areas are also not covered (ie, military forces overseas). This chapter doesn't apply to any set-aside preference of small/minority owned business. Set-asides may also include any form of preference, like exclusive right to provide good/service or price preference. SDR thresholds will be revised every 2 years based on rates. [Annex 15-A]

This chapter covers federal govt procurement and the "equivalence" factor in regards to other Parties. Content here is very similar to content in NAFTA Chapter 10. The idea that procurement would be the same across international borders is not new. Some of the specifics are. For example, the threshold it established is approximately $180k for goods/services and $6.9 million for construction projects compared to $250k/$8 million under NAFTA (for govt entities; the fed itself is $50k/$6.5 million). The callout for SME's is another. There are a lot of exceptions carved out for public interest, national security, etc. that would keep sensitive information safe. There are also no requirements set for state/local govt procurement, but negotiations will be conducting down the line to work that out... something I'm not a fan of.

From a "get everyone on the same page" perspective, this chapter does that. It will give opportunity to US businesses in regards to other govt partners. Not sure how much that helps SME's in regards to Asia, but it could definitely benefit us with Canada and Mexico. However, those countries would benefit from a more open market here as well. Procurement reform is something I want to tackle in the federal govt as I feel it wastes billions of dollars. Expanding the competitive landscape can help do that, especially for smaller projects where outsourcing development for a website to another country may be a viable option. I know numerous folks who have outsourced internationally the cutting up of photoshop files into XHTML because $200 for a few pages is cheaper than several hours of someone's time at $100/hr. Purchase provisions may save taxpayers money if, say, goods were bought directly from Japan instead of through an intermediary at a markup.

Now with competition comes the possibility of US firms losing business and/or jobs. It's the nature of capitalism and leads to the philosophical conflict of whether this chapter is "un-American." In thinking about it, I feel such claims would be far stretched. We already have trade agreements that setup procurement between ourselves and 9 of the 12 TPP countries (Vietnam/Malaysia/Brunei are lacking) and our economy has not suffered from govt procurement openness thus far. Of course, from a tendering perspective, there are ways in which contracts can be setup which eliminate a large majority of international firms (same with them to us). If there are in-person meeting needs for strategy, planning, etc that are too difficult for email/conference calls, that can eliminate competition that don't have offices here in the US. Change Orders post-project are also possible to get around certain project thresholds. Both may be considered "unnecessary obstacles" or "skirting obligations" but there is legitimate need for both, especially in the world of technology where govt managers may not be the most savvy. I can accept this chapter for what it is, knowing that if we really want to change the rules we would need to fix our WTO Govt Procurement Agreement (GPA) obligations that took effect in 2014 in addition to NAFTA and other FTA's. It could actually be used as a starting point for procurement reform by getting more domestic SME's involved while making more effective/efficient use of taxpayer dollars. And don't forget the Annex says various preferences for small/minority owned businesses remain kosher here in America.


Chapter 16 - Competition Policy

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Parties will adopt/maintain national competition laws proscribing anti-competitive biz conduct to promote economic efficiency/consumer welfare. Should take into account APEC Principles to Enhance Competition & Regulatory Reform (1999). Parties shall try to apply such national competition laws to all commercial activities in its territories. Certain exemptions are allowed based on public interest grounds. An authority will be responsible for enforcement of such laws. [Article 16.1]

Parties will inform people info/reasons before sanctioning them for anti-competition. Persons shall be able to defend themselves. Rules/procedures will be adopted/maintain towards investigation. All Persons will be granted review if desired. If a public notice of ongoing investigation is revealed by a Party, they shall avoid implying in said notice the person who has engaged in the alleged conduct. Investigations will treat confidential info as such and protect it. [Article 16.2]

Parties recognize private right of action by persons to seek redress of injunctive/monetary/etc remedies caused by violation of competition laws. Parties should adopt/maintain laws to provide such enforcement. If no laws are adopted/maintained, Parties still need to allow persons to request investigation and seek redress. Persons of one Party must be treated the same as other Parties in this regard. Parties may establish criteria to exercise rights in this section. [Article 16.3]

Parties recognize importance of cooperation between national competition authorities and shall exchange info on development of policy and as appropriate on law enforcement issues. [Article 16.4]

Parties shall consider undertaking mutually agreed technical cooperation activities, including advice/training on relevant issues, exchanging info/experience on competition advocacy, and assisting in implementing new competition laws. [Article 16.5]]

Parties recognize importance of consumer protection policy. Fraudulent/deceptive commercial activities may include misrepresenting material facts, failure to deliver after consumer is charged, or charging consumers w/o authorization. Parties shall adopt/maintain laws to stop this and promote cooperation/coordination in matters of material interest here through public bodies/law enforcement. [Article 16.6]

Parties shall endeavor to make their competition enforcement policies as transparent as possible, making info available upon request including any exemptions/immunities to other Parties (with explanation for such exception/immunity). Violations to national competition laws will be made public in writing so other Parties can become acquainted with them (minus confidential info). [Article 16.7]

Consultations will be used between Parties over relevant issues in this chapter. [Article 16.8] No dispute settlement is allowed over this. [Article 16.9]

Competition is good in a capitalist society, helping to spur innovation and bring costs down for consumers. The US already has anti-trust and anti-competitive authorities like the FTC. What this chapter does is ensure other Parties have similar setups. I don't think anything would change regarding US law based on this chapter. There are no concretely-worded sections that say the US will do anything to protect consumers that we doesn't already do, or encourage more of it. No dispute settlement over this chapter makes sense. I do wish it called out the dangers of monopolies/duopolies/etc, at least in a "recognized" fashion so we could curb those practices where a handful of companies do more harm than good (ISP's, telecomms, pharmaceutical makers, etc). The next chapter talks about those, however...


Chapter 17 - State-Owned Enterprises and Designated Monopolies

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This article covers state-owned enterprises (SOE's) and designated monopolies. A monopoly is a sole provider/purchases of a good/service but does not include entities granted IP exclusivity (ie, IP monopoly is not counted). State-owned means Party owns more than 50% of share capital, more than 50% voting rights, or holds power to appoint majority of board members/equivalent management body. [Article 17.1]

Central banks/monetary authorities of Parties are excluded (ie, they can conduct policy w/o chapter considerations). Financial regulatory bodies (even non-govt) are also allowed to exercise authority as normal over service suppliers. Parties can "bail out" failing/failed financial institutions/enterprises if need be w/o concern for this chapter. Sovereign wealth funds are exempt for the most part as are independent/enterprise pension funds (non-commercial assistance sections will still apply). Govt procurement is exempt and SOE's providing goods/services exclusively to a Party for govt functions are exempt. Parties can designate SOE's and monopolies. Articles 17.4, 17.6, and 17.10 won't apply to services supplied in the exercise of govt authority. [Article 17.2]

SOE's/monopolies must act in ways consistent with the whole of the TPP. [Article 17.3]

SOE's engaging in commercial activities acts in accordance with commercial considerations except to fulfill public service mandates consistent with this chapter. When purchasing goods/services or accords a covered investment, SOE's will treat those of other Parties no less favorably than anyone else's (Party or non-Party). Same with sales of its goods/services. Designated monopolies follow these rules as well. They cannot use monopoly positions to engage (directly/indirectly, via subsidiary or otherwise) anti-competitive practices in a non-monopolized market that negatively affects trade/investment between Parties. SOE's/monopolies can buy/sell under different terms/conditions/prices or even refuse to buy/sell services. [Article 17.4]

Party courts will have jurisdiction over civil claims against biz owned/controlled by foreign countries based on commercial activity in its territory unless it doesn't have jurisdiction over similar claims by non-foreign owned/controlled biz. Authorities/regulators will be impartial with respect to the SOE's and other non-state-owned enterprises. [Article 17.5]

Parties will not cause adverse effects to interests of other Parties through non-commercial assistance it provides (direct/indirect) to SOE's with respect to production/sale of goods or supply of service from one Party territory to another (via covered investment or not). Parties shall not cause domestic injury to each other (ie, hurt domestic producers whose collective output constitutes a major proportion of total domestic production of said good) through use of non-commercial assistance (direct/indirect) to any SOE that's a covered investment in territory of another Party. SOE services of a Party in its own territory won't be causes of adverse effects. [Article 17.6]

Adverse effects arise when SOE's production/sale of good receiving non-commercial assistance displaces/impedes Party's imports of like goods of another Party or those of a covered investment in its territory. Non-commercial assistance that's a significant price undercut by the SOE when compared to other like goods of a Party/covered investment will also be considered adverse. Services supplied by a SOE which displace/impede from market like service of another Party also adverse, as is price undercutting of service offered if there's significant change in market share over an appropriate period (to demonstrate a real trend) of at least 1 year. Initial capitalization or acquisition by a Party of a controlling interest of an enterprise will be deemed not giving way to adverse effects. [Article 17.7]

With regards to "injury" in 17.6, it will mean domestic injury (see 17.7), threat of material injury, or material retardation of establishment of such an industry. Material injuries will be based on positive evidence/objective examination of relevant factors (volume of production from non-commercial assistance, effect on prices, etc). A myriad of factors are involved in determining injury and it's possible none of them give decisive guidance on injury. Relevant economic factors/indices having a bearing on the state of the industry will play a role in determining injury (ie industry stats on production, sales, prices, profits, etc). It must be demonstrated that goods produced/sold by the covered investment via non-commercial assistance cause injury within context of this Article. Determinations of threat of material injury must be based in facts and not mere allegation/conjecture/etc. [Article 17.8]

Non-discriminatory treatment and non-commercial assistance section will not apply to non-conforming activities of a SOE/monopoly that Parties list in schedule to Annex IV or to those in Annex 17-D. [Article 17.9]

Parties will make public on an official website list of SOE's within 6 months of TPP enters into force. Parties will provide on written request info on SOE's/govt monopolies if the request has explanation over why it affects trade. Info shall include percent of shares Party/SOE controls, special voting rights, govt titles, annual revenue and assets over last 3 years, legal exemptions, financial reports, 3rd party audits, etc. Parties will respond with legal basis/policy objective for the non-commercial assistance, the form it takes (loan/grant/etc), amount budgeted (current and previously), duration of the policy/program, statistical data assessing effects on trade/investment, etc. If info is considered confidential, the requesting Party will not disclose it w/o prior consent of providing Party. [Article 17.10]

Where appropriate/subject to resources, Parties will engage in mutually agreed technical cooperation including exchanging info regarding experiences in corp governance/SOE operation, best practices, organizing intl seminars/workshop/etc. [Article 17.11]

A committee will be established on SOE's/Monopolies with reps from each Party to review operation/implementation of this chapter, consulting on chapter matters, developing cooperative efforts, promote chapter principles, etc. Will meet within 1 year of agreement signoff unless otherwise agreed upon via phone/video conference, in-person, or whatever. [Article 17.12]

Nothing prevents Parties from adopting/enforcing measures to respond to a temp natl/global economic emergency. Will also not apply to financial services of a SOE by govt mandate if service supply supports imports/exports not displacing commercial financing or are offered on terms no more favorable than those of the competitive commercial market. Same applies if a local presence is required. SOE's that assume temp ownership via foreclosure/similar action (defaulted debt, payment of insurance claim, etc) is exempt from chapter provided the actions are to recoup SOE investment via restructuring/liquidation/etc that will result in ultimate divestiture from the enterprise. sections of this chapter won't apply if the SOE/monopoly comes in under the annual revenue thresholds for commercial activities in one of the last 3 years, calculated according to Annex 17-A (must be evidence backed when invoked). [Article 17.13]

Further negotiations on this will occur in 5 years and Annex 17-B shall apply in any ISDS dispute. [Article 17.14, 17.15]

Initially, the revenue threshold will be 200 million SDR's (approx $276 million). The formula for adjustment is in Annex 17-A and is calculated on weighted sum of cumulative % changes in GDP deflators over 3 year periods based on data from IMF's International Financial Statistics database. Parties will consult if major changes to currency would create significant problems based on these calculations. [Annex 17-A]

If a dispute arises, the tribunal will get written info/responses from Parties within various timeframes (15-30 days, depending) and give Parties time to respond to each other. Confidential info will be designated and kept as such. Non-cooperating Parties may have their non-cooperation viewed as an adverse inference in a dispute. Timeline for resolution may deviate to give Parties room to accommodate information requests/answers. [Annex 17-B]

Within 5 years, Parties will conduct further negotiations regarding the extension of this chapter to sub-levels of govt and to address effects caused in markets of non-Parties through supply of services by SOE's. [Annex 17-C]

17.4.1(a),(b),(c)(i) don't apply to SOE's/monopolies (non-discriminatory treatment). Neither does 17.4.2 or 17.5.2 (courts/administrative bodies). 17.6.1(a) and 17.6.2(a) (non-commercial assistance) doesn't apply to production/sale of like good in the US territory. 17.10.1 (transparency) also does not apply to the US. All these exceptions are in regards to sub-levels of govt (ie state/local). [Annex 17-D]

This article covers state-owned enterprises and designated monopolies in regards to central governments, for the most part. There is recognition that financial services/monetary policy needs to be off-limits in regards to these measures, which is a good thing. A need for factual/material evidence of domestic injury is a dual-edged sword in that it can be easy to show lack of injury based on market conditions, but at the same time there may be genuine problems with a SOE/monopoly that are being covered up by the overall economic factors at play. The concrete rule on keeping SOE/monopolies from engaging in anti-competitive behavior in the commercial market is also good to have as is the allowance for temporary measures due to economic emergencies or investment recovery. Other non-commercial assistance that affects goods/services in territory of another Party are rightfully considered problematic. The overall non-discriminatory nature of the SOE's to other goods/services of other Parties also is a plus.

But there is bad here as well, I think. The transparency piece does not apply to any sub-level of govt, meaning citizens will still not know the full extent of SOE/monopolies outside of the federal govt level. That's a big problem considering ISP/telecomm monopoly/duopoly existence in various states here in America, not to mention municipal broadband possibilities. State/local govts will still be able to engage in discriminatory practices regarding SOE/monopolies because of this.

Transparency aside, applying this chapter to the state/local levels of govt in the future (as Annex 17-C says) may be a good thing. I'm thinking along the lines of infrastructure and technology competition like ISP/telecomm industries. Removing the ability to discriminate in favor of pre-established enterprises through legislation, right of ways, ease of access, etc could go a long way to improving goods/services offered to consumers at all levels of govt. I'm not sure how this would affect non-infrastructure goods/services at the same level, though, mainly due to my lack of knowledge over what SOE/monopolies are out there (hence the transparency problem).


Chapter 18 - Intellectual Property

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This article concerns itself with protection/enforcement of IP rights in a manner conducive to social/economic welfare and balancing rights/obligations. [Article 18.2] Parties may adopt/change laws as necessary towards IP to protect public health/nutrition, promote public interest of sectors of vital socio/econ/tech dev importance provided such measures are consistent with this chapter. Measures curbing IP abuse may also be needed as long as they are consistent with this chapter. [Article 18.3]

Parties recognize the need to promote innovation/creativity, diffuse info/knowledge/tech/culture/arts, and foster competition and open/effective markets through their respective IP systems while respecting transparency/due process and taking into account interests of relevant stakeholders (rights holders/service providers/users/the public). [Article 18.4] Parties are obligated to this chapter and may provide more extensive protection/enforcement of IP under law as long as it's consistent with this chapter. [Article 18.5]

Parties affirm commitment to TRIPS. This chapter does/should not prevent Parties from taking measure to protect public health and the chapter should support Parties' rights to promote access to medicines for all. Parties can determine what constitutes natl health emergencies. Recognitions of emergencies will still adhere to Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health (compulsory licenses, specific quantities needed, adequate reimbursement, etc). [Article 18.6] Parties will ratify (if they haven't already) the Berne Convention, Paris Convention, Patent Cooperation Treaty (1979), and other various agreements. [Article 18.7]

IP covered in this chapter will receive national treatment by Parties. With respect to secondary uses of phonograms by means of analog comms, free OTA broadcasting, and other non-interactive comms to the public, Parties may limit right of performs and producers of another Party to those its persons are given within jurisdiction of said Party. Natl treatment may be derogated in relation to judicial/administrative procedures if it's needed to comply with laws/regulations not inconsistent with this chapter and not a disguised restriction on trade. [Article 18.8]

Parties will strive to make its laws/regulations/procedures/etc on IP available on the internet, including registration systems for patents/trademarks/etc. [Article 18.9]

Unless otherwise stated, anything protected upon entry into this agreement or that upon which protection is claimed/meets the criteria for protection in the chapter will be so. Parties will not be required to restore protections that has fallen into public domain in its territory. [Article 18.10] Nothing prevents Parties from determining conditions for IP exhaustion under its legal system. [Article 18.11]

[Section B]
Points of contact for cooperation under this chapter may be established. [Article 18.12] Parties will strive to cooperate on the subject of this chapter. Cooperation may cover development of natl/intl policy, IP administration/registration systems, education/awareness of IP, IP of SME's, IP in research/innovation/econ growth, implementing multilateral agreements like those under WIPO, etc. [Article 18.13] Parties recognize importance of simplifying/streamlining procedures/process of patent systems (approvals, etc). Parties will try to cooperate amongst their patent offices to facilitate sharing/use of search/examination works of other Parties. They will strive to cooperate and reduce diffs in process/procedures of patent offices to reduce complexity and cost of obtaining patents. [Article 18.14]

Public domain is considered important and Parties recognize need for ways to recognize what has fallen into public domain (ie, a public database on registered IP). [Article 18.15]

Parties recognize importance of understanding the relation between IP and traditional knowledge associated with genetics. They will strive to cooperate in understanding these issues concerning IP and traditional knowledge associated with genetics/genetic resources. Parties will strive to pursue quality patent examination, including prior art determinations that may be based on publically available documentation on the genetic resource, opportunity for 3rd parties to cite prior art disclosures that might prevent patent, use of databases/digital libraries containing info on the genetic resources, and cooperation in training the patent examiners. [Article 18.16]

[Section C]
Parties won't require signs be visually perceptible as condition of trademark registration, nor can signs composed of sounds. Parties will try to allow scent marks to be registered. Parties may require description/graphic representation/both for trademark registration. [Article 18.18] Collective/certification marks are included in trademarks, as are those that serve as geographical indications. [Article 18.19]

Owners of registered trademarks have exclusive right to prevent 3rd parties w/o consent from using identical or similar signs for goods/services related to those of the owner's (likelihood of confusion). Identical signs for identical goods will automatically assume confusion. [Article 18.20] Exceptions like fair use of descriptive terms may be allowed provided it takes into account legitimate interest of own of trademark/3rd parties. [Article 18.21] In determining if a trademark is well-known, no req shall be made for registration within a Party's territory, nor will recognition outside of the trademark's sector be a req for well-knownness. [Article 18.22]

Parties will provide systems for examination/registering trademarks including written communication for refusal, allowing contestation of refusal, provide opportunity to oppose a trademark or seek cancellation of a trademark. Electronic means of doing the communication pieces are encouraged. [Article 18.23] There will be an electronic, online database of trademarks/applications. [Article 18.24] Trademarks will be classified consistent with the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. Classification is not grounds for dissimilar defenses. [Article 18.25]

Trademarks will be protected/renewed for at least 10 years. [Article 18.26]

Recordal of trademark is not necessary to establish validity/condition of use by a licensee. [Article 18.27]

Procedures for settlement of disputes along the lines of the ICANN Uniform Domain-Name Dispute-Resolution Policy will be followed regarding TLD's for country codes (.us, .jp, etc). Appropriate remedies will be available in cases where a person registers/holds a domain name identical or confusingly similar to a trademark with bad faith/intent to profit. A database of reliable/accurate registrant contact info will be maintained. [Article 18.28]

[Section D]
Parties shall provide legal means to prevent commercial use for a country name that misleads consumers as to the origin of a good. [Article 18.29]

[Section E]
Parties recognize geographical indications (GI's) may be protected through a trademark or other legal means. [Article 18.30] If procedures for GI protection exists within a Party, that Party shall accept apps/petitions w/o requiring intercession on a Party national, process such apps w/o overly burdensome formalities, ensure laws/regulation are public/readily available, provide for cancellation of protection/recognition of the GI, etc. [Article 18.31] Grounds for opposition/cancellation must at least cause confusion with a (good faith) pre-existing trademark in Party's territory, cause confusion with a pre-existing trademark whose rights were acquired in Party law, or the GI is a term customary in common language as the common name (ie, GI's for wines/spirits/grape variety/etc). Procedures will be available to seek cancellation where GI's are protected. Cancellation due to the GI term no longer meeting original protection recognition conditions is acceptable. If GI protection is granted to translation/transliterations of a term, the same rules/procedures will apply. Wines/spirits are exempt from this provision as determined by Party. [Article 18.32]

Party authorities will be able to determine if the term is customary in the common language on factors like whether it's used to refer to a type of good by competent sources (dictionaries, newspapers, websites, etc) and how the good uses the term in trade/marketing. [Article 18.33] Multi-component terms will not be protected if individual components are customary terms in a common language. [Article 18.34]

If terms are to be protected, info surrounding them such as the terms, their status of protection, the ability to oppose such protections, etc must be allowed. Exceptions for existing agreements that protect terms are allowed. [Article 18.36]

[Section F]
[Subsection A]
Parties will make patents available for any invention (product/process) in all fields of tech provided it is new, involves and inventive step (ie, is "non-obvious"), and is capable of industrial application (ie, "useful"). Parties will consider claims of obviousness to a person skilled or having ordinary skill in the art as prior art. New uses of a known product, new methods of using a known product, or new process of using a known product are patentable with new processes being unallowed to those who do not claim the product as such. Parties may exclude from patentability that necessary to protect ordre public or mortality (human/plant/animal life/health) or to avoid serious prejudice to nature/environment provided such is not merely prohibited by law. Diagnostic/therapeutic/surgical methods for treating humans/animals and animals/microorganisms/biological processes for product of plants/animal/non-biological processes may also be excluded. Plants may be excluded, but inventions derived from plants cannot be. [Article 18.37]

Info contained in public disclosures used to determine prior art will be disregarded if the disclosure comes from the applicant (direct/indirect) and occurred within 12 months of filing for patent. [Article 18.38]

Patents may be cancelled/revoked/nullified only on grounds that would have justified refusal to grant in the first place. Fraud/misrepresentation may also be grounds for such action, as is anything consistent with Article 5A of the Paris Convention and TRIPS. [Article 18.39] Parties may provide limited exceptions to patent exclusive rights if they don't unreasonably prejudice legitimate interests of owner, taking into account legitimate interests of 3rd parties. [Article 18.40]

Nothing in this chapter limits Party's rights/obligations under Article 31 of TRIPS (other uses w/o authorization of rights holder, time to negotiate deals, adequate compensation, etc). [Article 18.41]

If invention is made independently by more than one inventor, the first to file will be granted the patent. [Article 18.42]

Patent applicants will be granted at least one opportunity to make amendments/corrections/etc with its application. [Article 18.43] Parties will endeavor to publish pending patent apps 18 months after filing date or as soon as possible afterwards to promote transparency. [Article 18.44] For published apps/granted patents, Parties will make available at least the following info to the extent it's held by competent authorities: search/examination results for prior art, non-confidential communication from applicants, and patent/non-patent related literature citations by applicant/3rd parties. [Article 18.45]

Parties will try their best to efficiently exam/pass/reject patents and provide procedures to request expedition of examination. If there are unreasonable delays, the patent term will be adjusted accordingly to compensate (unreasonable is 5+ years after filing and 3+ years after examination request). Some periods may be excluded from this delay count by Parties (ie, time not occurring during processing). [Article 18.46]

[Subsection B]
If Parties require for marketing/sanitary approval of new agricultural chemical product the submission of private data/tests concerning safety/efficacy of a product, 3rd persons will not be given access to such for at least 10 years from market granting without owner approval. If evidence of prior approval in another territory is required, Party will also keep such data/test results protected from 3rd persons for at least 10 years from market approval. New agricultural chemical products are those w/o approval in the Party's territory. [Article 18.47]

[Subsection C] Best efforts will be made by Parties for market approval of pharmaceutical products in efficient/timely manners with term adjustment compensation for unreasonable curtailment due to the market approval process. Conditions/limits may apply if Parties still abide by this Article. Parties may adopt procedures to expedite processing of market approvals. [Article 18.48] Parties will adopt/maintain regulatory review exceptions for pharmaceutical products consistent with 18.40 (ie, take into account legit interest of owners/3rd parties). [Article 18.49]

If Parties require private data/test results as condition for market approval, such data will be protected from 3rd persons submitting the same/similar product based on such data or marketing approval granted to the person that submitted such info for at least 5 years from market approval in Party's territory. Same with conditions regarding prior marketing approval in another territory. Parties granting less than 8 years of protection under this section will grant at least 3 years of protect to new clinical info submitted as required for market approval covering new indication/formulation/method of administration or 5 years if the new product contains chemicals not previously approved in that Party territory. Parties may take measures to protect public health in accordance with the Declaration on TRIPS and Public Health, Article 18.52, and other areas herein. [Article 18.50]

If Partys allow "me too" products that rely on safety/efficacy data of an approved product, notice will be given to patent holder/licensee and judicial/administrative proceedings to resolve validity/infringement will be given. Remedies can include preliminary injunctions. [Article 18.51]

Parties will protect data/test results related to new biologics for at least 8 years from first marketing approval or protect data/test results for 5 years from first marketing approval and through other measures and in ways that deliver a comparable market outcome. At a minimum, Parties recognize this applies to products containing protein produced using biotech processes for use in people to prevent/treat/cure a disease/condition. Parties will consult 10 years from entry into this Agreement to review exclusivity period with aim of providing effective incentives to developing new biologics as well as facilitating timely availability of "me too" drugs. [Article 18.52]

Products subject to market approval but that are also patented in territory of a Party will not have their protection periods altered in the event that patent term ends earlier than specified in 18.47/18.50/18.52. [Article 18.54]

[Section G]
Parties shall ensure adequate/effective protection of industrial designs and designs embodied in part of an article or have particular regard to part of an article. Articles 25/26 of TRIPS apply here. [Article 18.55] Parties will strive to improve their industrial design registration systems as well as cross-border rights acquisition. [Article 18.56]

[Section H]
Parties shall provide authors/producers/performers exclusive rights to authorize/prohibit all reproduction of their works/performances/phonograms in any manner/form including electronic. [Article 18.58] Without prejudice to various Articles in the Berne Convention, Parties shall provide authors exclusive right to auth/prohibit communication their works to the public by wire/wireless means including making available to public at a time/place individually chosen by them. Mere provision of physical facilities for enabling/making communication does not itself amount to communication per this chapter or Berne Convention. [Article 18.59]. Authors/performers/producers of phonograms have exclusive right to auth/prohibit making available to public original/copies of their works/performances/phonograms through sale/transfer of ownership (ie fixed copies that can be put into circulation as tangible objects). [Article 18.60]

If authorization is needed from both author and performer/producer of a phonogram by a Party, both will always be required. [Article 18.61]

Rights in this chapter will be given to performers/producers of phonograms that are nationals of another Party and to performances/phonograms first published/fixed in the territory of another Party. First published means published in a territory within 30 days of original publication. Performs will be given exclusive right to auth/prohibit broadcast/communication to public of unfixed performances (unless its already a broadcast), fixation of unfixed performances, by wire/wireless means and making available to public these performances or phonograms accessible from time/place of their choosing. Analog transmission, non-interactive free OTA broadcasts, and other exceptions may apply as determined by Party law. However, these retransmission must comply with relevant rules and cannot occur over the internet. [Article 18.62] Works/performances/phonograms will be protected for life plus 70 or no less than 70 years from first authorized publication unless more than 25 years has passed since creation of the work. [Article 18.63]

Limits/exceptions/etc permitted by the Berne Convention are permitted as long as article 18 of the Berne Convention still applies (public domain/special agreements between countries). [Article 18.64] Limits/exceptions/etc will only be allowed if they do not conflict with normal exploitation of work/performance/phonogram and do no unreasonably prejudice legit interest of rights holder. Scope of applicability in TRIPS/Berne Convention/WCT/WPPT aren't reduced or extended. [Article 18.65]

Parties will strive to achieve balance in copyright and related right systems by limits/exception consistent with 18.65- including those in the digital world- for purposes like criticism, comment, news reporting, teaching, scholarship, research, etc as well as facilitating access to published works for the blind/visually disabled/print disabled as recognized in Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled (2013). Commercial uses may be considered legitimate. [Article 18.66]

Parties will provide the ability to transfer copyright/related rights between persons based on contract, including contract of employment. Parties may establish what contracts outside of written ones this applies to and reasonable limits to protect interest of original right holders while taking into account legit interests of the transferees. [Article 18.67]

People who circumvents effective tech measures controlling access to a work/performance/phonogram (knowingly/having reasonable grounds to know) or who makes/imports/distributes/sells/rents/etc products/components/services that are promoted/advertised/marketed for circumvention purposes, are only commercially significant for circumvention, and are primarily designed for circumvention are liable and subject to remedies in 18.74. Criminal procedures/penalties will be applied if person is found to willfully engage for commercial advantage/financial gain (ie, they have knowledge and there is commercial purpose). Parties may choose not to apply criminality to non-profit libraries/museums/archives/educational institutions/public non-commercial broadcasting entities. Remedies from 18.74 may also not apply if Parties choose provided activities are carried out in good faith w/o knowledge that such conduct is prohibited. Parties will not require designs/selection of parts for consumer electronics/telecomms/computing products provide responses to any particular tech measure that does not otherwise violate circumvention. Violations of this Article are to be treated independent of violations under Party's laws on copyright (unless Party applies criminality for circumvention). Parties may deem circumvention allowed in certain cases if a legislative/regulatory/administrative body determines there to be an actual/likely adverse impact on such non-infringing uses, but must also give due consideration of evidence that rights holder has given users the ability to enjoy the work w/o circumvention. Such cannot benefit anyone outside of the beneficiaries. Parties shall not undermine adequacy of the legal system by providing such limits/exceptions. [Article 18.68]

Rights Management Information is info identifying a copyrighted work, info on terms/conditions on use, and codes representing such info. Parties will make liable anyone who removes/alters RMI or knowingly distributes/imports RMI knowing the RMI has been altered without consent, or who knowingly distributes/imports/broadcasts/makes available/etc works where RMI has been removed/altered without consent. Willfully doing so will result in criminal procedures/penalties, but such do not apply to non-profit library/museum/archive/educational institution/public non-commercial broadcasting entity. Party's may allow such for authorized law enforcement/essential security interest/other govt purposes. Parties will not be required to ask rights holders to attach RMI to copies of their works. [Article 18.69]

Parties recognize important role of collective management societies for copyright/related rights in collecting/distributing royalties based on fair/efficient/transparent/accountable practices. [Article 18.70]

[Section I]
Parties will ensure enforcement procedures specified here are available under law (note law is not limited to legislation). Remedies will be available for private and SOE violations. 18.74/18.75/18.77 applies to trademarks as well as copyright infringement in the digital world. Procedures concerning enforcement will be fair/equitable and won't have unnecessarily cost/complications/time-limits/delays. No obligation for a judicial system will be put in place purely for IP nor require any kind of resource distribution between IP enforcement and general law enforcement. Parties will take into account proportionality of infringement seriousness and applicable remedies/penalties as well as interest of 3rd parties. [Article 18.71]

In civil/criminal/administrative proceedings involving copyright, person whose name is indicated as author/performer/etc of a work is the rights holder unless proof to the contrary is given. Trademarks that have been substantially examined by Party's competent authorities as prima facie valid. Patents that have been substantially examined/granted by Party's competent authority will be considered prima facie valid in Party's territory, but the competent authority can allow challenging of patents. Patent/trademark challengers shall be required to prove its not valid. [Article 18.72]

Final judicial/administrative rulings will be published in writing (online preferable) in Party's national language. Parties recognize importance of collecting/analyzing statistical data concerning infringement and best practices to combat infringement. Parties will make public info on efforts to provide effective enforcement of IP rights such as statistical info collected for such purposes. [Article 18.73]

Parties will make available civil judicial procedures for enforcement of IP rights covered in this chapter. Judicial authorities have power to issue injunctive relief conforming to Article 44 of TRIPS. In civil proceedings, judicial authorities can order infringer to pay rights holder damages adequate to compensate for injury because of infringement (knowingly/reasonable grounds to know). Amounts paid will take into consideration legit measure of value the rights holder submits which may include lost profits, value of infringed goods/services measured by market price, or suggested retail price. Copyright infringements will see judicial authorities pay, at least, profits attributable to the infringement (lost profits/value/suggested retail price). Copyright damages and trademark counterfeiting damages will be pre-established by Parties or additional damages (ie, punitive). Pre-established damages will be an amount sufficient to compensate right holder for harm caused by infringement with view of deterring future infringements. Judicial authorities can award damages they consider appropriate regarding all relevant matters. They may also award prevailing party court costs/fees and attorney fees/other expenses under Party's law. Parties will seek to ensure experts that have costs are reasonable costs. [Article 18.74]

In civil judicial proceedings, pirated works can be ordered destroyed without compensation, materials/implements used to manufacture infringing goods may be destroyed/disposed of to minimize future risk, and removing of infringing trademark will not be considered sufficient for allowing goods to be commercially available (unless there are exceptional circumstances). Judicial authorities may order (alleged) infringer to provide info for evidence purposes including info regarding other persons involved in any aspect of the infringement (confidentiality laws/processing personal data protections still apply). Sanctions may be imposed for violation of judicial orders concerning protection of confidential info in a proceeding. Judicial authorities have power to order adequate compensation to parties who are victim of abusive IP enforcement, including attorney fees. [Article 18.74]

In civil proceedings, Parties will give judicial authorities power to seize/take into custody devices suspected of being involved in prohibited activity, order damages, order court costs/fees, and order destruction of devices involved in prohibited activity. Damages won't be available against non-profit libraries/archives/educational institutions/museums/public non-commercial broadcasting entities if they prove they were not aware it was a prohibited activity. [Article 18.74]

Party authorities shall act on requests for IP rights relief inaudita altera parte, i.e. without prior hearing of the other side, where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed. Judicial authorities can order seizure of infringing goods/materials/etc relevant to infringement. Sufficient belief of rights violation is needed. [Article 18.75]

Counterfeit/confusingly similar trademarks/pirated goods imported will not be allowed in by Parties. Such requires prima facie against the rights holder regarding infringement and the rights holder must supply reasonable information to allow recognition by competent authorities as long as such does not unreasonably deter recourse to those procedures. Security/equiv assurance will be given to the defendant to prevent abuse, including in the form of a bond holding defendant harmless from loss/damage resulting from suspension of import should the goods be determined to not infringe. Rights holders will be notified of any goods being held that might violate along with detailed info on importer/exporter, quantity, names, addresses, etc within 30 days. Competent authorities can initiate border measures w/o a formal complaint on goods imported/exported/in transit that are suspected of counterfeit/being pirated. Procedures will be implemented to determine legitimacy. Illegitimate goods may be destroyed/disposed of to prevent harm to the rights holder. Fees associated with holding goods will be set amounts not unreasonable. All this also applies to goods sent in small consignments, but Parties may exclude small quantities of goods of non-commercial nature in traveler's personal luggage. [Article 18.76]

Parties will provide criminal procedures/penalties at least in cases of willful infringement (trademark/copyright) on a commercial scale- ie, acts for commercial advantage/financial gain and significant acts that have substantial prejudicial impact on interest of rights holder in relation to the marketplace. Willful import/export of counterfeit trademark/pirated copyright goods on a commercial scale to be criminal. This includes use of a trademark on packaging without authorization. Unauthorized copying cinematographic works in a movie theater will at least be criminal. Criminal procedures/penalties for aiding/abetting will be available. Criminal penalties will include imprisonment and monetary fines high enough to deter future acts consistent with crimes of corresponding gravity. Judicial authorities can account for serious of situation in penalty giving (ie threats/effects on health/safety). Counterfeit/pirated goods may seized in regards to alleged offenses. Judicial authorities can order forfeiture of assets derived from/obtained through infringing activity (in serious offenses at least). Like in civil procedures, goods seized/forfeited in criminal procedures may be destroyed without compensation if unauthorization is determined. [Article 18.77]

Parties will ensure persons have legal means to prevent disclosure/acquisition/use of trade secrets by others (including SOE's) without consent in manners contrary to honest commercial practices (ie, breach of contract, breach of confidence, and inducement to breach). Trade secrets encompass, at a minimum, undisclosed info as described in Article 39.2 of TRIPS. Violations via unauthorized/willful access to a TS on/by a computer, unauthed/willful misappropriation, or fraudulent/unauthed/willful disclosure. Criminal proceeding availability/penalties may be limited depending on the nature of the act (ie, for commercial/financial gain, related to natl/intl commerce, intention to injure, natl security, etc). [Article 18.78]

It will be criminal to make/assemble/modify/import/export/sell/lease/distribute/etc any tangible/intangible device/system that is purposefully/primarily for decrypting encrypted program-carrying satellite signals without authorization. Same for receiving such a decrypted signal or redistributing. Civil remedies will be available to those injured as a result. [Article 18.79]

Parties will adopt/maintain appropriate laws/regulations/policies/orders/etc stating central govt will only use non-infringing software protected by copyright in the manner authorized by the relevant license. [Article 18.80]

[Section J]
Parties recognize importance of continued development of legit online services consistent with Article 41 of TRIPS that allows effective enforcement of copyright online. Parties will ensure legal remedies available for rights holders and shall establish/maintain safe harbors in respect to online services that are Internet Service Providers (ISP's). The framework/safe harbors shall include legal incentives (form may vary) to cooperate with rights holders to deter unauthorized storage/transmission and limitations in its law that preclude monetary relief against ISP's for infringements they do not control/initiate/direct that take place on their systems. This includes content transmission, cached content, storage in a medium the ISP provides (ie, ISP cloud storage, email, etc), and referring links that may appear online. Conditions for safe harbor qualifications will exist including need to expeditiously remove/disable access to material on their network upon obtaining actual knowledge of infringement or through notice of alleged infringement. If counter-notices are allowed under Party law, ISP may restore it unless giver of original notice seeks judicial relief within reasonable time. Monetary remedies will be available via legal system against persons knowingly misrepresenting in a notice/counternotice that causes injury to the party as a result. ISP's will not be required to monitor their services or affirmatively seek facts indicating infringing activity. Parties will provide procedures to enable copyright owners with sufficient claim to obtain expeditiously from an ISP info identifying the alleged infringer for purpose of protecting/enforcing copyright. Other limitations/exceptions available to ISP's are not prejudiced by this section. [Article 18.82]

For Party to comply with safe harbor allowances, a stakeholder organization with both ISP/rights holders must be established w/ govt involvement. Such org develops/maintains effective/efficient/timely procedures for entities to verify validity of notices before forwarding to relevant ISP. There also need to be appropriate guidelines including the requirement of prompt removal of content contained in notices. Also need to have liability measures for when an ISP has actual knowledge of the infringement or is aware of apparent infringement. [Article 18.82]

[Annex 18-E]
Annex to Subsection J.

Safe harbor shall not apply to Parties that prescribe to law circumstances where ISP's do not qualify or Parties that provide statutory secondary liability for copyright infringement cases where person provides service whose purpose is to enable acts of infringement, has knowledge of that, what acts they take to prevent that, economic viability of such a service, etc. ISP's will be required to carry out functions described with notice forwarding and require liability if ISP fails to do so. Parties will induce ISP's offering location tools to remove within specified timeframe any reproductions made and communicate such as been removed. Parties will also induce ISP's to remove/disable access to material upon becoming aware of Party's court decision.

This Article is the longest of the TPP outside of the National Treatment/Market Access chapter (Article 2). It also covers a ton of specifics related to intellectual property (copyright/patent/trademark/geographical indicators). There are some good parts to it, but overall the section is crap and solidifies restrictions and rules into law that which should not be. The US is already teetering on the edge when it comes to IP abuse, especially with bad/non-obvious patents. Numerous provisions contained herein keep us from fixing those issues. Article 18.4, at the very outset of the chapter, brings a monetary component (foster competition and open/efficient markets) to IP- something our Constitution explicitly does not have. The foundation of America cannot be based in IP for money, especially given the number of copyright/patent/trademark abuses over the last 15 years.

But I did say there was good. Let me cover that first. The good is that it brings all countries into alignment concerning IP. It gets all Parties involved to adhere to various treaties we're already a part of (good or bad). It applies national treatment/MFN status across Parties for the most part. It increases transparency pertaining to laws/enforcement/remedies across Parties and establishes systems for registering/searching for IP. Same for inter-Party cooperation on IP. Recognition of public domain is good as are safe harbors for ISP's, especially since earlier leaked versions had more active monitoring requirements. Enforcement together with seizure/forfeiture of counterfeit/pirated goods on import/export is a good thing to have consistent across Parties. Traditional knowledge (ie, stuff passed down over generations related to health/genetics) can be used as prior art in combating patents. GI's (geographical indicators) won't trump already registered trademark. Fair use for the blind/visually impaired is a plus. Rights exhaustion is good. And... that's about it.

The bad far outweighs the good-

  • To start, fair use in Article 18.66 has no teeth and isn't even a requirement in this agreement. "Shall endeavor" and "due consideration" are far more forgiving that "shall provide."
  • Violations for national emergencies/health crises may be restricted by "adequate compensation." Consider that in light of the ridiculous prices on medicine- in part because of the bad IP laws and bad patents we have in place right now.
  • That issue is exasperated in Article 18.14 which seeks to streamline our already bad USPTO system of granting patents. Pushing for more IP is not the answer to any problem except how to get more money for less work as a frequent filer (the USPTO passes more bad patents in frequent filer industries according to research).
  • As I said, public domain recognition in 18.15 is good... the lack of teeth to setup/enforcement/etc of it is bad.
  • Trademarks can be considered similar even if they are registered in different classifications. This may be a problem as there was a recent case involving the NJ Turnpike and a Florida pizza joint (ruling favored the pizza joint).
  • Under Article 18.22(2) well-known trademarks can be protected regardless of whether the good/service is identical or similar provided such use would indicate a connection between those goods/services and the trademark owner such that the owner is likely to be damaged by such use. This becomes more problematic when the condition for "well-known" doesn't require awareness outside of sector to which it belongs.
  • TLD management by Parties instead of ICANN is not good, no matter how closely modeled the Party version may be. Holding domains "with bad faith intent to profit" is a lesser requirement than the ICANN Uniform Domain Name Dispute Resolution Policy.
  • Allowing patents for new uses of a known product, new methods of using a known product, or new processes of using a known product (Article 18.37) is a big problem. It's one of the reasons the "me too" drugs (called "follow on" drugs in the TPP) are quick to market and make companies billions while also raising insurance premiums.
  • "Non-obvious" still remains vague and elusive given how many bad patents the USPTO grants.
  • A 12 month grace period to file a patent after public disclosure is too long.
  • Fair use in patent infringement is just a consideration, not a guarantee (18.40).
  • Requiring a database of domain name registrants that's publically accessible is uncool from a privacy standpoint. Parties can implement law to protect such, but there is no obligation to do so.
  • Protections of data/test results related to agricultural chemical products and medical products (biologics, etc) is a decent idea, but not for the length of time given and not without review of the data. The US already has a problem with poor/incomplete clinical data that results in drugs being approved with problems and/or without confirmation of a truly independent party. A number of studies have been done showing drug companies tend to make testing as favorable as possible for themselves and choose Contract Research Organizations that will likely give them favorable results. This ends up keeping health/safety info in the dark. Such data should be made available while also preserving the IP protections. It might make generics/"me too" drugs more plentiful after protection ends, but that's the point. Protection of 3-12 years (depending on product/data) is just ridiculous. It may be consistent with the Hatch-Waxman Act, but that doesn't make it a good idea.
  • Consider as well the 10 year protection on agricultural chemical product data/test results in regards to Article 7 on Sanitary/Phytosanitary measures. Based on that chapter, the US' latest SPS Report, and this chapter, I seriously question our govt's commitment to agricultural safety at the expense of market efficiency. If they were truly serious, they would allow data to be evaluated by 3rd parties a lot sooner.
  • Biologic exclusivity with "comparable [market] outcomes" is confusing and suggests monetary compensation/adjustments or longer data protections (like the full 8 years).
  • Enshrining copyright to life + 70 is crap. Not just because it is too long, but because it raises problems of figuring out what is/is not in the public domain at the time of the agreement.
  • Enshrines the concept of "making available" as a copyright violation in 18.60, something we currently do not have under 17 USC 106. This is most likely due to the internet and any kind of cloud/file sharing/torrent service. Some folks feel that the possibility of infringement is the same as infringement in this regard. They are wrong.
  • Hierarchy checks (18.61) for copyright use absolutely sucks in the digital world when multiple layers of negotiations with multiple parties are required.
  • Allowing retransmission of OTA broadcasts but not retransmission over the internet is just dumb. Retransmission of "free" content (OTA costs me an antenna and TV) over the internet (slingbox or what-have-you) should definitely be allowed. The medium of transmission (OTA vs internet) shouldn't matter.
  • The fair use callout in 18.66 is so weak as to be laughable. There is no requirement, just "shall endeavor."
  • Contractual transfers of copyright in 18.67 screws over artists. The whole "works-for-hire" issue riled up artists years ago and this tries to implement that very same problem, again.
  • Anti-circumvention clauses are too strong; circumvention isn't even allowed when no copyright infringement is committed, barring exceptions which may not be in place. Exceptions are also not allowed if the rights holder has already put measures in place to uses the work in an alternative way.
  • Anti-circumvention willfully becomes both a criminal and civil violation. Jail time for ripping movies or using a no-CD patch for a computer game?
  • Circumvention exceptions can be determined by Parties but must take into account the rights holders' interests and what they provide beneficiaries. If there is a similar way the IP can be used through mechanisms the rights holder provides, circumvention should not be allowed according to this article.
  • There's a nice contradiction in the text where footnote 88 says "financial gain" is "commercial purpose," thus broadening applicability of criminality in circumvention cases.
  • Enforcement provisions go too far by allowing destruction of property in infringement cases.
  • The idea of suing for "lost profits" is a bad one. It's one thing to have punitive damages (which this chapter has) but "lost profits" is another matter entirely. Consider the case of Eli Lilly who sued Canada under NAFTA for $500 million in lost profits when Canada rejected their patent for lack of utility. While the ISDS chapter claims states cannot be sued for lost profits, it remains to be seen if the civil remedies in this chapter will trump that idea.
  • Protections of trade secrets in 18.78 without allowances for whistleblowing or investigative journalism over malicious practices hurts us more than it helps.
  • Not a fan of the requirement that govt use acquired software for "the purposes it was intended for" (18.80). Then again, I would encourage more open source software in govt to avoid this problem in the first place.
  • The section on ISP's is better than leaks showed, but I'm still concerned over "...or becoming aware of facts or circumstances from which the infringement is apparent..." in regards to ISP's. Does that mean ISP's should recognize various file lockers, torrent sites, etc as being possible sources of infringement and act accordingly? It's not the active monitoring from earlier versions, but it is worded pretty strongly...

All in all, the TPP would be a much, much better agreement without this chapter. Everything here is to the benefit of businesses at the expense of consumers. At least other sections gives Americans a fighting chance at making necessary changes in areas that would benefit the public overall.


Chapter 19 - Labor

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section covers labor, labor rights/regulations, etc amongst Parties. It affirms obligations of Parties to the International Labor Organization (ILO) regarding labor rights. Parties won't use labor rights for protectionist purposes. [Article 19.2] They will adopt/maintain the rights/freedoms of collective bargaining, eliminating all forms of forced/compulsory labor, abolish child labor and prohibit the worst forms of it, an eliminate discrimination in employment/occupation. Parties will also have acceptable minimum wages, hours of work, and occupational safety/health as accepted by each Party individually. [Article 19.3]

Parties will not waive/derogate from labor laws, weakening/reducing them in order to encourage trade/investment. [Article 19.4] Parties must effectively enforce labor laws after this agreement goes into effect. If a Party fails these obligations, doing so based on lack of resources is not an excuse. Parties are allowed to determine reasonable enforcement and allocation of resources to the task as long as such isn't inconsistent with this chapter. No Party can undertake enforcement action in territory of another Party. [Article 19.5]

Parties recognize goal of eliminating forced/compulsory labor- including child labor. They shall discourage through appropriate initiatives the importation of goods from other sources produced in whole/part by such labor (as long as there is no conflict with this agreement, the WTO, or other intl agreements). [Article 19.6] Parties will encourage biz to adopt corporate social responsibility initiatives on labor issues endorsed/support by their Party. [Article 19.7] Parties will promote public awareness of labor laws and make them publically available. Those with recognized interest will have access to impartial/independent tribunals (judicial or otherwise) available to them with fair proceedings complying with due process. Decisions will be made on evidence made available and the reasons supporting them. Review/appeal/remedies are allowed. Nothing in this chapter will require a tribunal to reopen a decision made, without prejudice to Party obligations under this chapter. [Article 19.8]

Parties will accept written submissions on matters related to this chapter based on publically known procedures for receiving/considering. Submissions will be reviewed in a timely fashion. Further info may be asked of submitters. [Article 19.9]

Parties recognize importance of cooperation for effective implementation of this chapter. They will consider each other's priorities, level of development, available resources, mutual benefits, capacity to cooperate, resource efficiency, etc. Parties will invite views and possible participation from labor stakeholders to identify areas for cooperation through Parties/ILO/non-Parties. Funding to be decided on case-by-case basis. Areas of cooperation may include job creation/how to promote entrepreneurship, creation of quality employment linked to sustainable growth/skills in emerging industries, innovative workplace practices to enhance worker well-being and biz competitiveness, lifelong learning/continuous education, work-life balance, improving SME productivity, occupational health/safety, collecting labor statistics, labor inspection/compliance, addressing challenges of multi-generational workforces, addressing labor/employment challenges in economic crises, promotion of equality towards migrants and elimination discrimination based on age/disability/race/gender, protect low-wage/migrant/casual/contingent workers, social protection issues like worker's comp/pensions/etc, info sharing/dialogue on employment conditions with multinational enterprises, etc, etc. This may be done through workshops/seminars, trips/visits, research, specific exchanges, etc. [Article 19.10]

Parties may request labor dialogue with each other via written request and they shall engage in good faith. They will attempt to address all issues through dialogue- written or otherwise- upon receipt of the request. All issues must be addressed. Plans regarding implementation of the outcome (programs, independent review, timeframes, etc) will also be discussed. [Article 19.11]

Parties will establish a labor council of senior govt officials of each Party to meet at every 2 years unless otherwise decided. Council will consider matters related to this chapter, work on labor cooperation between Parties, oversee/evaluate general work programs in accordance with said cooperation, discuss mutual interest, etc. Council will review chapter implementation after 5 years with subsequent reviews possible. It will be chaired on a rotational basis and make public reports. As appropriate, it will liaise with the ILO and APEC. It may work with non-Parties as well. [Article 19.12]

Contact points will be designated within each Party's territory 90 days from agreement signoff. Parties will notify each other of these points. The contact points will assist/report to the council and work with govt and other Party contact points through in-person and/or electronic means. [Article 19.13]

Council will have a way for the public to submit views pertaining to this chapter. It will also consider them. Parties will establish/maintain a national labor advisory body for the public to provide views on matters regarding this chapter. [Article 19.14]

Parties may request labor consultations from other Parties, providing specific info regarding such needs. Replies will be given within 7 days and consultations will be in good faith. Parties who feel they have considerable interest in the matter between the other two Parties may participate upon delivery of written notice explaining such. Consultations will have sufficient info given, treating confidential material as such. Independent experts may be brought in to assist. If a resolution is unable to be reached, the Council may be requested to intervene via written request information other Parties. Specifics as to steps taken, timelines, etc will be documented for record keeping. If resolution is unreachable after 60 days from first request, it may go to dispute settlement, but resolution through methods given here must come first. [Article 19.15]

This section on labor rights brings everyone into accord with the International Labor Organization (ILO). It's a good start. Defining labor benefits like minimum wage, hours of work, and occupational health/safety requirements is in the interest of everyone. The recognition and prohibiting of child labor is good. The list of areas for cooperation by Parties is extensive and covers a lot of bases. Having a Council seems like a better idea than most of the "committees" other chapters seek to setup because this Council has a more participatory role in dealing with labor issues amongst/between Parties.

The biggest complaint here is the lack of concrete standards. Minimum wages, decent hours of work, etc are all good, but Parties are able to define those on their own. There is no "minimum" standard being applied here. If, say, Vietnam finds that the equivalent of $1 USD is ok for minimum wage, that fulfills this part of the agreement. I understand that there is concern from unions that this chapter's provisions don't go far enough to protect those in other countries. I also understand the fear that work will be outsourced more because of this agreement fixing the "moral" dilemma and other articles tackling the monetary factor through tariff/TBT elimination. From the union perspective, this deal has some teeth in that Parties can request consultations and those must be addressed in timely fashions that can ultimately lead to dispute settlement. The outsourcing part is, unfortunately, something that has been happening for years. It's the product of competition. However, it can be offset through other avenues- like tax reform and legislation aiming at keeping jobs here in the US. Labor cost alone is never the sole reason for a business to shift operations abroad; one has to take shipping/transit costs into account after the fact along with corporate taxes in said countries and other conditions. The fear is valid, but not something that can't be effectively addressed through other means.

I still would like to have seen a minimum standard for those benefits set in 19.3.


Chapter 20 - Environment

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This section talks about the environment. It defines environment law as a statute/regulation of a Party with primary purpose of protecting the environment or preventing danger to human life/health through prevention of pollutants/contaminants, controlling hazardous/toxic chemicals/substances/wastes/etc, or protection/conservation of wild flora/fauna including endangered species and protected natural areas (this included bio diversity). To clarify, this refers only to laws passed by Congress or pursuant to an Act of Congress that the federal govt enforces. [Article 20.1]

The objective is to promote mutually supportive trade & environmental policies, high levels of environmental protection, effective enforcement of such laws, and enhancing Parties abilities to do so (ie, cooperation). This is done in consideration of their respective national priorities. It's recognized as inappropriate to use environmental laws/other measures which would be a disguised restriction on trade/investment between Parties. [Article 20.2]

Parties recognize sovereign right of Parties to establish their own levels of domestic environmental protection/priorities and to adopt/modify laws that strive to encourage high levels of protection accordingly. No Party shall fail to effectively enforce such laws in manners affecting trade/investment between Parties. Parties retain right to exercise such at their discretion and their priorities. No Party will weaken/derogate/waive environmental laws in order to encourage trade/investment between Parties. No Party can take up environmental law enforcement in territory of another Party. [Article 20.3]

Parties are committed to implement multilateral environmental agreements that simultaneously support trade. [Article 20.4]

Parties will take measures to control production/consumption/trade of substances that can significantly deplete/modify the ozone layer (including those of the Montreal Protocol on Substances that Deplete the Ozone Layer from 1987). See Annex 20-A for measures that are acceptable for compliance. Parties will make publically available their programs/activities (cooperative or not) that are related to ozone protection. Cooperation on these matters may include (not limited to) environmentally friendly substance alternatives, refrigerant management policies/practices/etc, combating illegal trade in such ozone depleting substances, etc. [Article 20.5]

Parties will take measures to prevent the pollution of marine environments from ships, including provisions from various other agreements like MARPOL and those covered in Annex 20-B. Non-compliance still requires a Party to prove another has failed to take measures to prevent pollution from ships in manners affecting trade/investment between Parties. Public participation/consultation is recognized as important to developing these measures; info about Party's programs/activities will be made available to the public. Parties will cooperate on matters of mutual interest in ship pollution including accidental, routine operation, deliberate pollution, developing tech to minimize ship-waste, ship emissions, port waste facility betterment, etc. [Article 20.6]

Parties will promote public awareness and allow requests by the public to its competent authorities (with due consideration given) regarding alleged violation of environmental laws. Judicial/quasi-judicial/administrative proceedings will be available under law for enforcement in fair/equitable/transparent/due process obliging manners. Sanctions/remedies will be available for violation of these laws, including damages/injunctive relief or govt action. Appropriateness of factors will be taken into account when establishing sanctions/remedies, such as the nature/gravity of the violation, damage caused to the environment, the any economic benefit derived from the violation. [Article 20.7]

Parties will seek to accommodate requests for info regarding implementation of this chapter and establish mechanisms to facilitate such. [Article 20.8] Persons of a Party may submit written requests for info on implementation of this chapter. Requests in accordance with domestic procedures will be responded to in a timely fashion. Submissions/responses will be made public- through website or other means. Procedures for submission formats may require pieces of info like person making the request, explaining how the issue affects trade/investment between Parties, ensure ongoing judicial/administrative proceedings aren't brought up, etc. If a request assets a Party is failing its environmental obligations by law, other Parties (after a response has been given) may request the Committee on Environment discuss said submission/response and decide what to do then. No later than 3 years after this agreement goes into effect, the Committee will prepare a report for the Commission on the implementation of this Article. [Article 20.9]

Parties should encourage enterprises in its territory/jurisdiction to adopt voluntarily principles of corp social responsibility in regards to the environment; those consistent with intl recognized standards/guidelines endorsed/supported by that Party. [Article 20.10] Parties recognize flexible/voluntary mechanisms (voluntary auditing/reporting, market-based incentives, voluntary sharing of info/expertise, etc) can contribute to achievement/maintenance of high levels of environmental protection and complement domestic regulatory measures. Such should be done in a way that avoid creating unnecessary trade barriers. If private/non-govt orgs develop voluntary mechanisms, Parties will encourage them to be truthful/not misleading, based on relevant intl standards/guidelines/etc, promote competition/innovation, and do not treat products less favorably on the basis of origin. [Article 20.11]

Parties recognize importance of cooperation in implementing this chapter to protecting the environment/promoting sustainable development as they strengthen their trade and investment relations. Parties will cooperate to address matters of join/common interest between them when there is mutual benefit and as natl priorities/circumstances/resources allow. Such may include non-govt/non-Party groups. At least one authority will serve as contact point in each Party, with Parties notifying each other of such within 90 days of this agreement taking effect. Cooperation can take many forms, including dialogue, workshops, seminars, conferences, etc. Parties will periodically review implementation of this chapter and report their findings to the Environment Committee for evaluation. Parties shall encourage the public to participate in these cooperation efforts. If one Party feels an environmental law at the sub-level of govt of another Party is not effectively enforced, it shall start a dialogue with the other Party and include specifics. Cooperation is subject to the availability of funds/human resources/etc, with funding decided on a case-by-case basis. [Article 20.12]

Conversation/sustainable use of biodiversity also recognized as important. Parties will promote/encourage such, in accordance with its laws/policies. This includes respecting/preserving the knowledge/practices of indigenous/local communities engaging in traditional lifestyles related to such biodiversity. The importance of access to genetic resources within Party jurisdictions (consistent with intl obligations) is recognized. Some Parties may require informed consent to access such. Parties will cooperate in matters of biodiversity like in everything else in this chapter under Article 20.12. [Article 20.13]

Parties recognize that alien land/water species moving to a new environment can be problematic in many ways. Curbing such is recognized as a critical strategy. The Environment Committee will accord with the Committee on Sanitary/Phytosanitary Measures (Article 7.5) to deal with such invasive issues. [Article 20.14]

Parties recognize that transition to a low-emission economy requires collective action and such will reflect domestic circumstances/capabilities. Cooperation will occur consistent with 20.12 to address such joint/common interest matters, which may include energy efficiency, clean/renewable energy sources, sustainable transport, sustainable urban infrastructure development, etc. [Article 20.15]

Parties acknowledge their role as major consumers/producers/etc of fisheries products and its sector's importance to the fishing communities. Marine capture fisheries (outside of aquaculture) is a recognized urgent resource problem facing the intl community. Inadequate fisheries management, subsidies that contribute to overfishing/overcapacity, and IUU (illegal unreported unregulated) fishing can have significant bad impact on trade/development/environment. Parties will seek to operate a fisheries management system regulating wild capture fishing by preventing overfishing, reduce by-catch of non-target species, promote recovery of overfished stocks, etc. Such will be based on the best scientific evidence available and on intl recognized best practices for fisheries management/conservation (including , the FAO Code of Conduct for Responsible Fisheries, etc). Parties will promote long-term conservation of sharks/marine turtles/seabirds/marine mammals through effective enforcement/conservation measures including as appropriate fisheries by-catch mitigation measures, catch limits, fining prohibitions, etc. No Party shall grant/maintain subsidies within the meaning of Article 1.1 of the SCM Agreement that are specific within the meaning of Article 2 of the SCM Agreement, including those that negatively affect (based on best scientific evidence) fish stocks in overfished conditions (ie, if levels are so low that restrictions are needed to allow stock to rebuild), and those provided to any fishing vessel while listed by the flag State/relevant regional fisheries management org. Subsidies setup prior to this agreement will be brought into conformity ASAP (up to 3 years). Parties will try not to introduce new subsidies, based on social/development priorities. Parties will notify others within 1-2 years of subsidies granted in relation to these activities and include specifics like program name, legal authority for it, catch data by species, status of fish stock, imports/exports, etc, etc. Parties may request additional info and Parties will respond to such requests ASAP. In support of efforts to combat IUU fishing practices, Parties shall cooperate with each other on these matters; they will also support monitoring/surveillance, deter IUU vessels, etc, etc. [Article 20.16]

Parties recognize importance of combating the illegal take (capture/kill/collection) and/or illegal trade in wild flora/fauna and acknowledge such undermines efforts to conserve/manage those natural resources, has social consequences, and more. Parties will adopt/maintain/implement laws/regulations/measures to fulfill obligations under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). This also includes future amendments. Violations must have an affect on trade/investment between Parties to be considered as such. CITES procedures will be used to address possible issues between Parties first. Parties will exchange info of mutual interest in combating these illegal activities and endeavor to implement as appropriate CITES resolutions to protect/conserve species whose survival is threatened by intl trade. Parties also committ to protecting/conserving wild flora/fauna at risk in its territory and maintain/strengthen govt capacity/frameworks to promote sustainable forest management. This includes trying to develop/strengthen cooperation/consultation with non-govt entities to combat these activities. Measures to combat such activities will be based in credible evidence (TBD by each Party). They may include sanctions, penalties, etc that may deter such acts. Parties will try to take measures to combat trade of wild flora/fauna transshipped through its territory illegally (based on credible evidence). It's recognized Parties may take action/investigate/enforce such measures after taking into account the seriousness of the suspected violation and available evidence. Parties will look for ways to enhance law enforcement cooperation on these matters. [Article 20.17]

Parties recognize the importance of trade/investment in environmental goods/services as a means of improving environmental/economic performance and addressing global environmental challenges. They further recognize the importance of this agreement to promote trade/investment in such goods/services in a free trade area. The Environment Committee will consider issues between Parties related to such and try to address any barriers to trade. [Article 20.18]

Parties will designate contact points with its relevant authorities within 90 days of this agreement and notify others of such. The Environment Committee will be made of senior govt reps or their designees of relevant trade/environment national authorities responsible for implementation of this chapter. The Committee will provide forums to discuss/review aspects of this chapter, provide periodic reports, etc and will meet as deemed fit. Decisions will be made by consensus unless agreed to otherwise. Decisions/reports will be made public. 5 years after this agreement, the Committee will review/report on the implementation of this chapter. [Article 20.19]

Parties shall at all times endeavor to agree on interpretation/application of this chapter and will make effort through dialogue/consultation/info exchange/etc to address such matters. Parties may request consultation with each other via written request and will make efforts to arrive at mutually satisfactory resolutions to the matters, which may include cooperative activities. Parties may seek advice/assistance from anyone else they deem appropriate. [Article 20.20] If that doesn't work, they may request Committee reps of the Parties in question convene to consider the matter and attempt resolution. [Article 20.21] If there is failure to reach a resolution, Parties may refer the matter to relevant Ministers of their respective Parties. Such consultations will be confidential and w/o prejudice to the rights of any Party in future proceedings. [Article 20.22]

If Environment Committee, Senior Representative, and Ministers attempts all fail (ie, 20.20 to 20.22) to bring resolution, Parties may request dispute settlement panel under Article 28.7 that shall seek tech advice/assistance if appropriate from a CITIES authorized entity to consult and provide due consideration to any interpretive guidance in reporting finding/determinations under 28.17.4. A Party must determine if they have environmental laws substantially equivalent in scope to those that would be subject of dispute. If not, Parties will discuss in consultations. [Article 20.23]

I think Article 20.2 sums up this chapter best. The first 3 objectives have Parties "recognize" or "strive to do" something while the 5th commitment gives Parties leeway. In fact, the majority of the sections start with Party "recognizing" something and then providing no concrete requirements to address such. A lot of encouragement and striving, but too few "shall adopt/establish/maintain" sentences. Across three sections- General Commitments (20.3), Cooperation Frameworks (20.12), Conservation and Trade (20.17)- it is explicitly called out that enforcement in many environmental areas are subject to national priorities; in other words, lack of priority by a Party is ok as long as the few sections that have specific requirements are fulfilled. It's clear that trade and investment are the main goal with environmental concerns an afterthought.

The concrete measures in regards to trade/investment/trafficking of illegal wild flora/fauna is a good start (20.16). Combating ozone degradation (20.5) and ship pollution (20.6) are better than nothing. But then all that's said about forest management is Parties will cooperate on deforestation/forest degradation matters and commit to the promotion of sustainable forest management. There is no bite, no hardline, no signature requirement that makes this Article worthwhile.

And that's what I feel really bothers me about this entire chapter. All Parties were brought to the table and were given an opportunity to really address some environmental issues in ways that could have a massively positive global impact. And they all purposefully chose not to do so, purposefully chose to remind themselves in this very text that the trade/investment part is more important. Section 20.3.6 might say otherwise ("... it is inappropriate to encourage trade/investment by weakening of reducing the protection afforded in their respective environmental laws"), but such follows status quo. On a major issue like this, status quo is absolutely not good enough.


Chapter 21 - Cooperation and Capacity Building

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This article covers cooperation and capacity building activities, acknowledged as important by Parties and may be undertaken by 2+ Parties on a mutually agreed upon basis. They also recognize importance of the private sector involvement and that SME's may need assistance in participating in global markets. [Article 21.1]

Cooperation/capacity building activities may include (but aren't limited to) the areas of agriculture/industrial/service sectors, promoting education/culture/gender equality, and disaster risk management. Parties recognize tech/innovation provides added value to these activities. These activities may be undertaken via dialogue, workshops, collaborative programs, sharing of best practices, etc, etc. [Article 21.2]

Parties will designate a contact point on these matters and may request cooperation/capacity building activities through said points. [Article 21.3] Likewise, a Committee on Cooperation and Capacity Building (CCCB) will be formed from govt reps of each Party to facilitate exchange of info between Parties relating to these experiences/lessons, to discuss/consider issues for future activities, invite as appropriate other private/public sector entities to assist, review implementation/operation of this chapter, etc, etc. It will meet within a year of the agreement passing and then whenever in the future. Meetings will be recorded and reported to the TPP Commission. [Article 21.4]

Parties recognize differing levels of development in each other and will work to provide appropriate financial/in-kind resources for cooperation/capacity building activities, subject to

availability and comparative capacities. [Article 21.5]

There is not dispute settlement for this chapter. [Article 21.6]

This chapter on cooperation and capacity building pretty much seems like a "feel good" chapter with no other content to it. Most every other Article already discusses cooperation in some regard. This chapter seems to say Parties recognize cooperation in general is important, but also makes sure to not tie anyone's hands- financially or otherwise. A metaphorical throwaway chapter, in my opinion.


Chapter 22 - Competitiveness and Business Facilitation

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

This article covers competitiveness and business facilitation. Parties recognize that their business environments must be responsive to market developments to compete in domestic/regional/global economies and to better integrate in the free trade area. As such, they establish a Committee on Competitiveness and Business Facilitation (CCBF) made of govt reps of each Party. CCBF shall discuss/establish activities to support efforts towards a competitive environment conducive to the establishment of biz, facilitates trade/investment between Parties, etc. CCBF will provide advice/recommendations to the Commission on ways to further accomplish this. They'll also explore ways to develop/strengthen supply chains (cross-border network of enterprises). It will meet within a year and then whenever after. CCBF may work with other committees/groups established by the TPP. [Article 22.2]

CCBF will explored ways this agreement may be implemented so as to promote development/strengthening of supply chains and ultimately reduce cost of doing business within the FTA. CCBF will develop recommendation and promote workshops/seminars/etc with appropriate experts (including private sector/intl donor orgs) to assist participation by SME's in FTA supply chains. CCBF will review the effect of this 4 years after agreement goes into force, then 5 years thereafter unless otherwise agreed upon. A report to the Commission will be given 2 years after TPP agreement signoff and be made public unless Parties agree otherwise. [Article 22.3] CCBF will have mechanisms to allow interested persons in Parties to provide input on these competition/business facilitation matters. [Article 22.4]

No dispute settlement is allowed under this chapter. [Article 22.5]

This chapter on promoting competition and making use of supply chains within the free trade area established by the TPP is another "feel good" chapter, in my opinion. Yes, the concept of supply chains and working to integrate SME's into the global economy in ways that allow them to take advantage of goods/services cross-border is important, but it also fails to take into account the currency situation and sheer cost of doing business. Currency valuations make it easier and more difficult on SME's depending on the market while there is a time/ease of acquisition factor that plays a role as well. SME's don't usually have direct participation in the global market- about half of their global sales are made as "value added" additions to the direct exports of other traders according to the US International Trade Commission. There definitely is a growing interest among SME's to sell to the global market. Other chapters already covered ways in which SME's can be aided through this agreement.


Chapter 23 - Development

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Parties affirm commitment to promotion/strengthening of open trade/investment environments and seek to improve welfare/reduce poverty/raise living standards/create jobs in support of development. It's acknowledged that development is important in promoting inclusive economic growth/prosperity, including a more broad-based distribution of economic growth benefits through biz expansion, job creation, and reduction of poverty. Joint development activities are recognized as ways to reinforce this between Parties. [Article 23.1] Parties recognize their leadership is important towards implementing development policies (with transparency/accountability) including those that can make maximum use of this agreement. [Article 23.2]

Parties recognize broad-based economic growth reduces poverty, enables sustainable delivery of basic services, and expands opportunities for people. This in turn promotes peace/stability/democratic institutions/etc. Parties recognize the need to invest in public infrastructure/welfare/health/education and effectively/efficiently administer public institutions. Policies taken to enhance this growth may include those promoting market-based approached that improve trade conditions and access to finance for vulnerable areas/populations and SME's. [Article 23.3]

Parties recognize that enhancing opportunities for women to participate in this global economy aids economic development. Parties will consider undertaking cooperative activities aimed at enhancing the ability of women (biz owners or not) to fully take advantage of this agreement through activities like advice/training, developing women leadership networks, identifying best practices to workplace flexibility, etc. [Article 23.4]

Parties recognize that promotion/development of education/science/tech/research/innovation can play an important role in accelerating growth/competition/job creation/etc. Parties are encouraged to designed policies in these areas that take into consideration trade/investment opportunities arising from this agreement like those aimed at enhancing enterprises' ability to turn innovations into competitive products/start-up businesses. [Article 23.5]

Parties recognize joint activities between Parties to promote max development benefits derived from this agreement can reinforce natl development strategies. Such activities may include discussions to promote development assistance/finance programs with natl development priorities, ways to expand engagement in science/tech/research for innovative/development purposes, facilitating private sector (including SME) partnerships, etc. [Article 23.6]

A Committee on Development composed of Parties' govt reps will be established to facilitate info exchanges on lessons learned, forming/implementing natl policies, discuss future joint development activities, etc, etc. It will meet within a year of agreement signoff and then as necessary thereafter. [Article 23.7]

If there is conflict between this and other chapters, the other chapters trump this. [Article 23.8] There is no dispute settlement for this chapter. [Article 23.9]

This chapter seems to be a "feel good" reaffirmation that development activities play an important role in making this entire agreement work. It discusses good ideas like business expansion, job growth, building infrastructure, public funding of health/education, trying to promote innovation/competition, empowering women in the workplace, etc. But aside from the committee piece, everything is recognition and voluntary. Furthermore, the ideas in this chapter can be trumped by others. Therein lies the problem, in my opinion.

I refer to the intellectual property chapter, specifically. IP is a govt granted monopoly in the form of patent/copyright/trademark. The IP chapter goes very far in strengthening protections, which does the opposite of promoting innovation and competition; the longer an entity can prevent others from using the IP, the less innovation/competition there is. I recognize that there needs to be a balance, but within the last 10-15 years we've seen a rash of IP abuse and bad patents (vague/obvious/not significantly different) from the USPTO which has lead to higher costs in tech and healthcare, going against the ideology of this chapter. As such, I lump this in with the last two "feel good" chapters. Nothing in here is being forced upon the United States or any other country. We can do all of this already without this chapter.


Chapter 24 - Small and Medium-Sized Enterprises

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Parties will establish/maintain its own publically accessible website with info on this agreement, including the full text, summary, and info designed for SME's (provisions relevant/any additional info a Party considers useful). Website links to other Parties and to govt agencies/other appropriate entities that provide info considered useful to those interested in trade/investing/doing business in that Party's territory. This includes customs info (regs/procedures), IP rights info (regs/procedures), sanitary/phytosanitary regs/standards, foreign investment regs, tax info, etc. [Article 24.1]

Parties establish a Committee on SME's (COSME) of govt reps from each Party. It will identify ways to assist SME's to take advantage of this agreement, exchange/discuss experiences and best practices supporting SME's, develop/promote seminars/workshops/etc to inform SME's of benefits from this agreement, facilitate the development of programs to assist SME's in participation with the global supply chain, report to the TPP Commission, etc. It will meet within a year of agreement signoff and thereafter as necessary. [Article 24.2] There is no dispute settlement for this chapter. [Article 24.3]

This chapter briefly covers the concept of integrating SME's into the global supply chain so that they can maximize their benefit from this agreement. That's a very important idea because SME's are very important to the US economy- for example, startups/small businesses are the biggest job creators in the country. Concrete specifics are lacking, thus my need to give it the "feel good" label as well. I would love to see/hear ideas Parties might have to better balance the effect of this agreement on SME's.


Chapter 25 - Regulatory Coherence

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This chapter discusses regulatory coherence, that is, the use of good regulatory practices in the process of planning/designing/issuing/implementing/reviewing regulatory measures to facilitate achievement of domestic policy objectives/regulatory cooperation on a path of promoting intl trade/investment and economic growth, and job creation. Parties affirm importance of sustaining/enhancing the benefits of this agreement through regulatory coherence, Party's sovereign right to identify regulatory priorities/measures to address this at levels deemed appropriate, the role of regulation in achieving public policy objectives, etc. [Article 25.2]

Parties shall determine/make available the scope of its covered regulatory measures within 1 year of agreement signoff. They should aim for significant coverage. [Article 25.3]

Parties recognize regulatory coherence can be facilitated through domestic mechanisms that increase interagency consultation/cooperation in developing regulatory measures. Parties will try to ensure it has procedures/mechanisms in place to do this and review proposed measures, possibly creating a natl/central coordinating body for this purpose. These mechanisms/procedures should generally has the ability to review proposed measures for good practice adherence, strengthen consultation/cooperation to prevent overlap/duplication/inconsistent requirements, recommend systemic regulatory improvements, and publically report on all this. [Article 25.4]

Parties should generally encourage relevant regulatory agencies to conduct impact assessments when developing proposed regulatory measures exceeding a threshold of economic/regulatory impact as established by the Party. Differences in social/cultural/legal/etc circumstances mean Parties recognize specific regulatory approaches may be taken. Impact assessments should measure the need being addressed, feasible alternatives, reasons why the alternatives would work, and rely on the best reasonably obtainable existing info (science/tech/research/etc) within the boundaries of the authorities/regulatory agency/etc. Impact on SME's may be taken into consideration. New regulatory measures should be plainly written (clear/concise/etc) and publically available. Parties should review at regular intervals their regulatory measures to determine if the they should be modified/expanded/repealed/etc based on Party objectives. Parties should notify public annually (somehow) of any measures it expects to issue in the next 12 months. [Article 25.5]

A Committee on Regulatory Coherence (CORC) of govt reps from each Party will be established to consider issues associated with implementation of this chapter, future priorities, etc. Parties will designate a contact point for info requests from other Parties. CORC will meet within a year and whenever after. At least every 5 years after agreement signoff, CORC will consider developments in the area of good regulatory practices as well as their experiences in implementing it while considering recommendations for the TPP Commission on improving provisions of this chapter. [Article 25.6]

Parties shall cooperate in order to facilitate chapter implementation and maximize benefits. This may include info exchanges/dialogues/meetings with other Parties/SME's, training programs/seminars, etc. Parties will ensure regulatory measures are centrally available. [Article 25.7]

For transparency purposes and to serve as a basis for cooperation/capacity building activities in this chapter, Parties will submit notification of implementation to CORC within 2 years of date of entry and at least 4 years thereafter. Such will describe steps taken to establish processes/mechanisms for interagency cooperation and review of proposed regulatory measures, encourage relevant regulatory measure impact assessment, ensure measures are written/publically available, review regulatory measures, etc. Subsequent notifications will cover steps taken since previous notification. During notification review, Parties may ask questions. [Article 25.9]

If there are inconsistencies between this an other chapters, other chapters trump this one. [Article 25.10] There is no dispute settlement for this chapter. [Article 25.11]

This article covers regulatory coherence. It may not have much in it, but I think the coverage of regulatory measures with impact assessments, reviews, SME impact, etc are important. Basically, it serves as a sort of "accountability" chapter for regulatory measures as they relate to the TPP as a whole. As with some other chapters, there are a number of "recognitions" here in relation to the practices, but not a lot of concrete "this is what Parties must do" content. Still, for what is being said and the Committee established herein to back it up, I don't have a problem with it.


Chapter 26 - Transparency and Anti-Corruption

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Parties will ensure its laws/regulations/procedures/etc with respect to any matter covered by this agreement are promptly published/made available to the public. To the extent possible, Parties shall publish in advance measures it plans on adopting and allow interested folks opportunity to comment. To extent possible, when introducing/changing laws/regulations/procedures in matters of this agreement, a reasonable timeframe will be given between when its publically available and when it goes into force. Proposed regulations will be published in an official journal/on official website no less than 60 days in advance of date comments are due (or sufficient time decided upon). Adopted regulations will be promptly published and, if appropriate, include explanation on purpose/rationale for the regulation. [Article 26.2]

Parties will ensure administrative proceedings related to measure of general application of matters in this agreement are consistent/impartial/reasonable. Persons of another Party involved in these proceedings will be given reasonable notice of such along with description of proceedings, legal authority for it, the issue in question, etc. Said person of another Party will be given opportunity to present facts/arguments in support of their position, and such procedures will be in accordance with Party law. [Article 26.3]

Parties will establish/maintain judicial/quasi-judicial/administrative tribunals or procedures for prompt review/correction of final administrative actions with matters covered by this agreement. They will be impartial and independent of the office/authority entrusted with administrative enforcement. Entities involved in the proceedings will have reasonable opportunity to defend themselves and decisions will be made on evidence. Further review/appeal procedures will be available as determined by Party law. [Article 26.4]

If a Party feels any proposed/actual measure may materially affect operation of this agreement or substantially effect another Party's interests under this agreement, it will (if possible) inform the other Party of said measure and respond to info requests/questions about it. Info provided under this article shall be w/o prejudice as to whether the measure in question is consistent with the agreement. [Article 26.5]

Parties affirm their resolve to eliminate bribery/corruption in intl trade/investment. They affirm their adherence to APEC Conduct Principles for Public Officials (2007) and encourage observance of APEC Code of Conduct for Business: Business Integrity and Transparency Principles for the Private Sector (2007). The scope of this section is limited to measures against bribery/corruption on matters in this agreement. Descriptions of such offenses are determined/punished based on each Party's law. Parties will ratify/accede to the United Nations Convention against Corruption (UNCAC) (2003). [Article 26.6]

Parties will adopt/maintain legislative and other measures necessary to establish criminal offenses under law for intl trade/investment matter that are considered corruption. This includes promises/offerings/etc given directly/indirectly of an undue advantage for the official/person/entity (via action/inaction), solicitation/acceptance by public officials (direct/indirect) of undue advantage for the official/person/entity (via action/inaction), and promise/offering/giving to foreign public official or public intl org (direct/indirect) an undue advantage for the official/person/entity (via action/inaction) in order to obtain/retain businesses or other undue advantage in relation to conduct of intl business. Aiding/abetting/conspiring to do that is also criminal. It may not be an offense if the advantage was permitted/required by the written laws/regulations of the foreign public official's country. Liability will be established for such actions and will be subject to effective/proportionate/dissuasive criminal or non-criminal sanctions, including monetary. Tax deductions for expenses incurred in connection to any of these offenses are not tax deductible. In order to prevent corruption, Parties will adopt/maintain measures as necessary in accordance with its laws/regulations regarding the maintenance of books/records/financial disclosure statements/accounting standards/etc to prohibit off-book accounts, making off-book or inadequately identified transactions, record non-existent expenditures, use false documents, intentionally destroy bookkeeping documents earlier than foreseen by law (ie, under 15 USC 78 l and 15 USC 78o (d)). [Article 26.7]

To fight corruption and promote public official integrity, Parties shall try to adopt/maintain (as their legal system allows) measures to adequately select/train individuals in such positions, measures to promote transparency in these folks' behavior, policies/procedures to identify/manage any actual/potential conflict of interest, measures requiring senior/other appropriate public officials to make declarations on activities/employment/investments/gifts/etc from which a conflict of interest may result, and measures facilitating reporting by public officials of acts of corruption to the appropriate authorities. Parties will try to adopt/maintain codes of conduct for correct/honorable/proper performance of public functions and disciplinary measures for violations. If legal system allows, Parties will consider establishing procedures to handle officials with allegations of corruption leveraged against them (ie, suspension/removal/resignation/etc) bearing in mind respect for the principle of presumed innocence before guilt. Judiciary members will be held to similar standards to strengthen integrity and prevent corruption opportunities. [Article 26.8]

No Party shall fail to enforce anti-corruption laws adopted/maintained in compliance of this article through sustained/recurring action/inaction. Parties retain the right for its law enforcement/prosecutors/judicial authorities to exercise discretion in relation to anti-corruption laws with bona fide decisions regarding allocation of resources. They affirm their commitment to applicable intl agreement/arrangements consistent with their respective legal system to enhance effectiveness of law enforcement in regards to anti-corruption. [Article 26.9]

Parties will take appropriate measures (as legal systems allow) to promote public persons and private sector participation in anti-corruption fights affecting intl trade/investment and to raise public awareness to said corruption. This includes public education programs, adopting/maintain professional associations in their efforts to assist in developing internal controls/ethics/compliance programs (particularly for SME's), etc. They will encourage private sector enterprises (based on size/structure) to develop internal audit controls for actions and financials to prevent/detect corruption. Parties will make sure its anti-corruption bodies are well known to the public and will provide access to them, if appropriate, anonymously. [Article 26.10]

Nothing in this article will affect rights/obligations of Parties under UNCAC or other agreements. [Article 26.11]

Dispute settlement (Article 28), as modified, will apply to this chapter. Parties may only have recourse to such if it's felt another Party is inconsistent or fails to carry out obligations of this chapter. Dispute settlement isn't applicable to 26.9 (enforcement of anti-corruption). Dispute settlements consultations (28.5) will apply, but with these changes: a Party other than a consulting Party may request in writing to participate in consultations with the consulting Party no later than 7 days after request for consultations occur. Such requests will state how its trade/investments are affected. Parties will also involve officials of their relevant anti-corruption bodies in consultations. Parties will make every effort to find mutually satisfactory solutions to the matters. [Article 26.12]

Parties are committed to facilitating high-quality healthcare and continued improvement of public health for their nationals. They recognize important role pharmaceutical products and medical devices play in delivering this, in R&D related to such products/devices, the need to promote timely/affordable access to such products/devices through transparent/impartial/expeditious/accountable procedures w/o prejudice to Party's right to apply proper standards of quality/safety/etc, and the need to recognize the value of such products/services through operation of competitive markets or by adopting/maintaining procedures that appropriately value the objectively demonstrated therapeutic significance of such products/devices. The scope of products/devices subject to statutes/regulations will be defined by each Party and made publically available. [Annex 26-A.1]

Parties with natl health care authorities that have procedures for new pharmaceutical products or medical devices reimbursement purposes or that set amounts of such under natl health care programs will ensure all formal/duly formulated proposals for such products/devices are completed on time, rules/methods/etc used to assess such proposals is disclosed, applicants will be afforded timely opportunities to provide comments during the decision making process, provide applicants in writing enough info on the basis of recommendations/determinations for listing such products/devices for reimbursement, make available independent review processes/internal review processes (ie, by group of experts) that, at minimum, includes substantive reconsideration of applications if requested by applicants directly affected by the product/device reimbursement listing, and provide written info to the public regarding recommendations/determinations as long as confidential info is protected under Party law. None of this applies to govt procurement of such products/devices. [Annex 26-A.2]

As permitted by Party law/regulations/etc, pharmaceutical product manufacturers will be allowed to tell health professionals/consumers their their websites truthful/non-misleading info regarding its products that are approved for marketing. Parties may require info include balance of risks and benefits and all indications for which the competent regulatory authority has approved said marketing. [Annex 26-A.3]

For dialogue/mutual understanding issues, Parties will by sympathetic to and afford consultations in written requests for info from other Parties. They will be handled within 3 months of delivery and involve officials responsible for the overnight of natl healthcare authorities/officials and other appropriate govt officials. [Annex 26-A.4]

Dispute settlement does not apply to this annex. [Annex 26-A.6]

Throughout the annex, healthcare authorities for the United States refers to the Centers for Medicare & Medicaid Services (CMS) with respect to their role in marketing Medicare national coverage determinations. [Schedule to Annex 26-A]

This article covers transparency and anti-corruption matters in relation to laws/regulations/procedures related to intl trade covering aspects of this agreement. Ensuring laws/regulations/etc are public is a good thing. Combating corruption is a good thing. The note about making corruption costs not tax deductible was a nice touch. That the APEC standards being adhered to only apply to bribery/corruption in relation to this agreement and not all aspects of trade/investment is a downer, but still better than nothing. I like this chapter overall.

The annex is... a mixed bag. It reflects the current Medicare National Coverage Determination process we have in place here in the US, but then it also reflects the problems with said NCD process. NCD is better than litigation (which can take years and courts seem to defer to Medicare's judgment), this much is true. They also are usually related to tech that is heavily lobbied for; in the last four years, only 6 NCD's addressed services not related to a specific technology. NCD considerations are probably driven more by politicals/financials than by real necessity.

From what I understand, the annex here has more dramatic implications in regards to transparency/review provisions between the US and other countries via other existing free trade agreements. There is a sense from folks that this annex will hurt the US medical device market in other countries, like Japan, because it excludes transparency/review provisions from dispute settlement. I understand the concern but also think that allowing dispute settlement for the entire annex might lead to more problems than solutions- even here in the US with regards to creating more reimbursements. I'm fine with it being excluded here.


Chapter 27 - Administrative and Institutional Provisions

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Parties establish a TPP Commission (TPPC) comprised of Ministers/senior officials from each Party. [Article 27.1]

The TPPC shall consider matters relating to implementation/operation of this agreement, consider proposals to amend/modify the agreement, supervise committees established herein, conduct reviews of the economic relationship/partnership within 3 years and then at least every 5 years thereafter, establish rules/procedures for arbitral tribunals in dispute settlement, consider ways to further enhance trade/investment between Parties, etc. It may handle many aspects relating to this agreement including dealing with committees established herein, rules/procedures/arrangements for agreement implementation, interpret provisions of the agreement, consider/adopt modifications to annex schedules, etc. It will also review operation of the agreement, taking into account the various committees herein, developments in intl fora, and (as appropriate) input from non-govt entities. [Article 27.2]

Decisions made by the TPPC and subsidiary bodies will be done by consensus unless otherwise determined. Consensus means no Party at the meeting where a decision takes place objected. [Article 27.3]

The TPPC shall meet within 1 year and then whenever after. Meetings will be chaired successively by Parties. Work by the TPPC/subsidiaries can be done through any means necessary (email, video conferencing, etc). Other rules/procedures for TPPC conduct may be created. [Article 27.4]

Parties will designate an overall contact point for communication between Parties on TPP matters. [Article 27.5] They will also designate an office for administrative assistance to arbitral tribunals established in chapter 28. Parties are responsible for operation and costs of said office. [Article 27.6]

At each regular TPPC meeting, Parties with transitional periods will report on such. Parties may request further information in writing if desired. Failure to provide notification of transitional measures taken means such is automatically put on the next meeting agenda. [Article 27.7]

This chapter on the TPP Commission is pretty straight forward and to the point. It covers general setup of oversight regarding this agreement and also keeps tabs on transitional measures. No problems with it.


Chapter 28 - Dispute Settlement

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Parties will try to agree on interpretation/application of this agreement at all times and work towards mutually satisfactory resolution if issues arise. [Article 28.2]

Except as mentioned elsewhere, dispute settlement here is to help with avoidance/settlement of agreement interpretation disputes between Parties, when a Party/Parties feel a proposed/actual measure of another is inconsistent or fails to carry out agreement obligations, or when a Party feels a benefit it should have (like MFN status) is being nullified/impaired as a result of another Party's measure inconsistent with this agreement. Within 6 months of agreement signoff (when WTO members can invoke Article 64 of TRIPS), TPP Parties will consider amending the benefits to include chapter 18 (IP rights). Instruments entered into by 2+ Parties related to this agreement doesn't affect rights/obligations under TPP of Parties not subject to it and may be subject to dispute settlement. [Article 28.3]

When a dispute arises, the complaining Party may select the forum in which to settle to the exclusion of other fora. [Article 28.4]

Parties may request in writing consultations with each other for any matter under 28.3. Said request will include reasons for making such and will be shared with all Parties. Receiving Party will respond to all in 7 days unless otherwise agreed to. Parties other than the requesting on can write in an ask to participate (with reasons why) within 7 days. Consultations will be done in person of through tech (email/conference/etc) and Parties will try to reach a mutually satisfactory resolution by providing sufficient info on the measure(s) in question to do so. Confidential info will be kept as such. Party agencies with expertise may be requested to join in. [Article 28.5]

Parties may agree at any time to try alternative dispute settlement methods like good offices (ie, a 3rd Party serving as friendly intermediary), conciliation or mediation- all of which will be confidential and which can be terminated at any time. These methods can occur at the same time as panels under 28.7. [Article 28.6]

The Party requesting consultation may request in writing a panel be established along with details of the measure/issue in question and legal basis for complaint. If multiple Parties have multiple disputes over the same matter, a single panel should handle them if feasible. Panels may not review proposed measures. [Article 28.7]

Unless otherwise agreed to by Parties, the panel will examine the matter in the request and make findings/determinations/recommendations (with reasons) on it and confirm if there is a violation under 28.3. [Article 28.8]

Panels will be 3 members. Both Parties involved in the dispute will pick a panelist and notify the other. Failure to appoint by the complaining Party will cause the dispute to lapse; failure to appoint by the responding Party will result in the complaining Party(s) to pick a panelist from the responding Party's qualified list (if it exists under 28.10) or from the roster of panel chairs (per 28.10) or if that doesn't exist, randomly by complaining Party. This will be done within 35 days of panel establishment request. The panel chair should try to be appointed by mutual agreement of both Parties. If they can't within 35 days, the 2 panelists chosen will choose from the roster of qualified panelists (under 28.10). If they can't within 43 days, the 2 panelists will choose themselves and have the Parties agree. If that fails within 55 days, random selection will occur from qualified panelist rosters. And if that fails, either Party may request the chair be chosen by an independent 3rd party from the qualified roster (both Parties must agree to it). And if that fails, it goes back to random selection from qualified roster lists. If no such lists exists, nominations for panelists may be made. The panel chair will not be a national of any disputing Party unless agreed upon. [Article 28.9]

Panelists selected should be experts unless it involves Labor offenses (chapter 19), Environment offenses (chapter 20), or Transparency/Anti-Corruption offenses (chapter 26). For those chapters, experts should expertise in those specific areas of law. If a panelist can't resigns/can't serve, a replacement will be appointed within 15 days. If a disputing Party feels a panelist is violating code of conduct, they shall be removed and a replacement selected with the rules above. [Article 28.9]

Panelists shall have expertise/experience in law/intl trade/other matters covered by this agreement. They'll be chosen for objectivity, be independent of Parties, and comply with the code of conduct. People who participate in article 28.6 (good offices, etc) cannot be panelists. Within 120 of agreement signoff, Parties will establish a roster of agreed upon panel chairs. If they cannot, the TPP Commission will appoint them. Parties may nominated 0-2 people for the roster but only 1 may be a national of theirs. This roster is good for 3 years. Replacements can be appointed at any time by consensus if a member can't/won't serve anymore. Parties may create a list at any time of individuals who can/want to serve as panelists- nationals or not. These lists will be available to all Parties. [Article 28.10]

The panel will make objective assessments of the matters before it based on facts and applicability/conformity with this agreement. They'll make findings/determinations based on such. The panel will consider this agreement in accord with rules of interpretation under intl law from Articles 31 and 32 of the Vienna Convention on the Law of Treaties (1969) and with respect to WTO agreements relevant here. Findings/determinations/recommendation cannot add to or diminish rights/obligations of Parties under this agreement. Decisions will be made by consensus or majority vote if consensus not possible. [Article 28.11]

The Rules of Procedure will ensure a right to 1+ hearing before the panel for oral arguments, then hearing will be open to the public barring confidential info or otherwise agreed to. Parties will be able to provide written submission of their case and a written rebuttal. Oral/written arguments will be made public barring reasons (confidentiality/etc). Panel will consider requests from non-govt entities in disputing Party territory to provide written views on the matter. All arguments will be made in English unless agreed upon. Hearings will be held in the capital of the responding Party. [Article 28.12]

Parties not disputing but having an interest in the matter will request in writing to participate (with written submissions, oral arguments, etc). [Article 28.13]

The panel may seek info/tech advice from experts subject to terms/conditions disputing Parties agree to. The Parties will be able to comment on expert info/advice. [Article 28.14]

The panel may suspend/terminate its work at any time at the request of the complaining Party(s). Suspensions will be for a maximum of 12 months. Longer suspension causes the dispute to lapse. [Article 28.15]

Initial panel reports will be made w/o the presence of any Party. It will cover relevant provisions of the agreement, oral/written arguments, etc and, if requested, recommendations for resolution of the dispute. It will be presented to disputing Parties with 150 days of last panelist appointment or 120 days in cases of urgency (ie, matters related to perishable goods). Report include the panel's findings, determinations on inconsistency or whether a Party failed obligations or nullified/impaired another and reasons for such. Panelists may submit separate opinions not unanimously agreed upon. Parties may comment in writing within 15 days of the report, after which the panel will consider said comments and issue a final report. [Article 28.16]

Final reports will be be given to disputing Parties within 30 days of the initial report (unless otherwise agreed upon) and be made public 15 days thereafter (subject to confidential info). Panels may not indicate which panelists are associated with majority/minority opinions. [Article 28.17]

Parties recognize the importance of prompt compliance with panel determinations. Based on the final report, Parties will- whenever possible- eliminate the non-conformity/nullification/impairment within a reasonable timeframe if it can't be done immediately. If they can't agree to such a time, disputing Parties can take the matter to the panel chair for arbitration who will determine reasonable time within 90 days based on particular circumstances. [Article 28.18]

Should the responding Party decide not to comply or it's deemed to have not complied after the reasonable timeframe, negotiations will ensue for mutually acceptable compensation. This includes possible benefits suspension equivalent to the non-conformity/nullification/impairment at hand. Monetary sanctions are possible as well, but none of that is preferred over elimination of the problem in the first place. Parties will negotiate back and forth over whether responses to the issues and/or action taken to resolve the issue are acceptable or not (while also noting financial services and IP rights are special circumstances). These negotiations will be done through the panel who will ultimately determine if compliance is achieved or not. The panel also determines what actions can be taken by the complaining Party against the responding Party. [Article 28.19]

If a Party feels it has eliminated the source of the dispute, it will let the panel know in writing for them to decide within 90 days. If the panel determines compliance, any suspension of benefits under 28.19 will be reinstated. [Article 28.20]

No Party may provide for a right of action under its domestic law against another Party on grounds that a measure is inconsistent with agreement obligations or that they have failed to carry out obligations. [Article 28.21]

Parties will try as much as possible to use arbitration instead of dispute settlement and provide appropriate procedures to ensure observance of agreements to arbitrate and for the recognition/enforcement of arbibtral awards. [Article 28.22]

This section handles the rules and procedures for dispute settlement. There are a lot of conditionals given here in regards to picking panelists for the arbitration tribunal and in regards to suspension of benefits/compliance after panel determinations. It covers the topic fairly well and stresses how suspension of benefits together with monetary compensation is not the preferred way of resolving disputes. Even the dispute settlement process, itself, is not the preferred way of resolving issues- arbitration is.

Transparency in the dispute settlement process is good. Unlike with ISDS in chapter 9, I don't think Party disputes as outlined here will involve much confidential information. The worry is that even though disputes should be made public, Parties will invoke confidentiality unnecessarily to keep the public uninformed- something we very much don't want.


Chapter 29 - Exceptions and General Provisions

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Article XX of GATT-94 and its notes are incorporated into this agreement without affect the main points of chapters 2-5, 7, 8, and 17. Parties understand measures in Article XX(b) of GATT-94 include environmental measures necessary and that such relate to conversation of living/non-living natural resources. Paragraphs a, b, and c of Article XIV of GATS are incorporated without affect to the main point of chapters 10, 12, 13, 14, and 17. Parties recognize the environmental measures therein are necessary to protect human/animal/plant life or health. Nothing in this agreement stops Parties from taking action authorized the dispute settlement body (DSB) of the WTO or under another free trade agreement in which the Parties involved are TPP members and members of said FTA. [Article 29.1]

Nothing in this agreement requires Parties to furnish/allow access to info which might compromise essential security interest nor preclude them from applying measures considered necessary with respect to maintenance/restoration of intl peace/security or protection of its own essential security. [Article 29.2]

Parties may adopt/maintain restrictive measures regarding payments/transfers for current account transactions in the event of serious balance/external financial difficulties or threats thereof (like difficulties with macroeconomic management). Those measures, however, will be consistent with all national treatment and most-favored nation treatment provisions in this agreement, will be consistent with the IMF Articles of Agreement, avoid unnecessary damage to commercial/economic/financial interests of another Party, be temporary and phased out progressively within 18 months (exceptional circumstances may extend this, if written approved is given), not be inconsistent with non-discriminatory provisions that protect public welfare objectives (see Article 9.7), not interfere with investors' ability to earn market rate of return in Party territory on any restricted assets (those that cannot be transferred our of the territory), and not be used to avoid necessary macroeconomic adjustments. None of that applies to payments/transfers relating to foreign direct investments. Measures taken will be price-based or have a good reason for using quantitative restrictions. In the case of trade in goods, Article XII of GATT-94 (Restrictions to Safeguard the Balance of Payments) and the Understanding on the Balance of Payments Provisions of the GATT 1994 are incorporated into this agreement without affect on the main points. Parties adopting/maintaining measures listed above will notify other Parties in writing within 30 days, convey a schedule for phase out, promptly publish the measures, and promptly consult with other Parties to review the measures. [Article 29.3]

Except as stated here, nothing in this agreement applies to taxation measures or rights/obligations of a Party under any tax convention (which trump this agreement). If there is thought to be an inconsistency in a tax convention between 2+ Parties, the matter will go to the designated authorities (for America, that's the Assistant Secretary of the Treasury for Tax Policy) who will have 6-18 months to rule on inconsistencies. After that period, dispute settlement or arbitration claims may occur where the panel will consider the matter based on the determination of the designated authorities. National treatment provisions in this agreement will apply to taxation measures like Article III of GATT-94 as will Article 2.16 (related to duties/taxes/other charges). [Article 29.3]

National treatment (10.3) and CBT articles (11.6.1) apply to taxes on income/cap gains/corp profits/value of an investment or property (but not on the transfer of such) related to the purchase/use of particular services. National treatment and MFN treatment from articles 9.4, 9.5, 10.4, 11.3, 11.4, 11.6.1, and 14.4 will apply to all other taxation measures except taxes on estates/inheritances/gifts/generation-skipping transfers. Non-discriminatory treatment of digital products (article 14.4) will apply to taxes on income/cap gains/corp profits/value of an investment or property (but not the transfer of such) that relate to purchase or consumption of particular digital goods. [Article 29.3]

Nothing in the previous block of text will apply to MFN obligations with respect to advantage according by a Party via a tax convention, to non-conforming provisions of existing tax measures, amendments to non-conforming provisions of existing tax measures, measures aimed at ensuring equitable/effective imposition/collection of taxes (unless they arbitrarily discriminate between people/goods/services of another Party), provisions related to ongoing income plans like pensions/social security/trust fund/etc, or any excise duty on insurance premiums that, if levied by other Parties, is covered in the previous paragraphs. [Article 29.3]

Article 9.7 (treatment for loss of investments) will apply to taxation measures unless the such a claim is not considered expropriation (pending investigation by designated authorities). If it is determined to be so, the investor can move for dispute settlement under article 9.18. [Article 29.3]

Parties may elect to deny benefits of section B of chapter 9 (ISDS) with respect to claims challenging a tobacco control measure of the Party. Claims submitted against the Party will be dismissed. Tobacco control measures are those related to production/consumption of such products and their sale/distribution/marketing/promotion/use/etc. Measures related to tobacco leaves outside of such products are not tobacco control measures. [Article 29.5]

Nothing in this agreement will require Parties to give access to info that would impede law enforcement or is otherwise contrary to public interest or which would prejudice the legitimate commercial interests of enterprises- public or private. [Article 29.7]

Parties may establish appropriate measures to respect/preserve/promote traditional knowledge and traditional culture values. [Article 29.8]

This article covers general provisions and exceptions... and there seem to be a decent number of exceptions.

With regards to the tobacco carve-out, ISDS may be ineligible while state-to-state disputes can still commence. Will the US elect to have this ISDS exemption? Not likely. Regardless, assume for a moment that ISDS is possible here- who decides what is or is not a tobacco control measure? It seems fairly arbitrary in nature. Does it apply to vaping, e-cigarettes, or other mechanisms resulting in nicotine consumption? The lack of distinction in what a tobacco control measure is coupled with it being unknown whether the US will elect to not allow tobacco ISDS make this provision not as good nor clear cut as I would have hoped.

The incorporation of GATT and GATS articles is good for getting all Parties consistent with current WTO language and standards (national treatment, MFN treatment, etc). It also states that Parties (as applicable) may still use the WTO DSB for resolution under other free trade agreements. That raises the conflict of application with this whole agreement yet again: do the provisions of the TPP trump those of other agreements? As stated before Article 1.2 seems to think not, which means problems with inconsistency most likely will creep up.

There is no strict definition in this agreement for "essential security" as an exception and the usual footnote that forces tribunals and panels to acknowledge it is missing. That's a two-edged sword in that having such a provision would allow us to better strengthen national security but at the same time we've seen a lot swept under the rug in the name of national security; being able to challenge that in the US or abroad will be more helpful than hurtful.

It's good that taxes will be given fair treatment across the board, though I'm not sure if allowing dispute settlement for taxation that results in loss of investments is a good thing- expropriation or not.

Finally, I think it's good that capital controls (29.3) are put in place. The conditions here are fair in following national and MFN treatment in regards to trade in goods. If emergency situations require it, capital controls can be good for the macroeconomy. Not restricting Parties in this regard is beneficial.


Chapter 30 - Final Provisions

  • Original Text & USTR Summary

  • Detailed Summary

  • Thoughts

Annexes/appendices/footnotes constitute an integral part of this agreement. [Article 30.1] Parties may agree in writing to amend this agreement. All Parties must agree and it must be done through proper procedures/channels of each Party. [Article 30.2] In the event of an amendment to the WTO Agreement that changes a provision previously incorporated into this agreement, Parties will consult on whether to amend this agreement. [Article 30.3]

Any APEC member or state/customs territory Parties agree to may join this agreement pending accordance with applicable legal procedures, negotiations with a TPP working group, etc. The TPP Commission will review the report and decide on whether to accept the new Party. All Parties must agree to the new member. [Article 30.4]

This agreement goes into effect 60 days after all original members sign off and notify the Depositary in writing. If all Parties don't notify the Depositary within 2 years of signoff, it shall go into effect 60 days later if at least 6 Parties accounting for 85%+ of combined Parties' GDP in 2013 have notified the Depositary- or in however long a timeframe it takes to get 6 Parties with 85%+ combined GDP. [Article 30.5]

Parties may give written notice to withdraw from the agreement to the Depositary. The withdrawal will take effect 6 months after notice is given unless otherwise agreed upon. Remaining Parties are still obligated to the agreement. [Article 30.6]

New Zealand is the Depositary of this agreement. They will provide certified copies of texts and amendments to each State and acceding State/customs territory. [Article 30.7]

The English/Spanish/French texts are equally authentic. If there is a divergence, the English will prevail. [Article 30.8]

Nothing special to say about this chapter on final provisions. It legitimizes everything and sets up the procedure for new Parties to join and current Parties to withdraw. New Zealand becomes even more special and English versions trump other languages.

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