What is the TPPA?

The TPPA is a free trade agreement between twelve countries around the Pacific. The countries that have currently reached an agreement on the TPPA are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Discussions about the wide-ranging agreement have been going on since 2006, with New Zealand being one of the main negotiators.

Free trade agreements (FTAs), like the TPPA, are legal agreements between countries that remove or reduce the barriers on moving goods across borders. These can be include quotas, taxes on goods or other policies by governments.

Without an FTA, governments can place taxes on any products coming into their country, be it food, gadgets or clothing. These taxes are called tariffs, and they can be placed on goods coming in from outside of New Zealand, if there aren’t agreements in place.

When a free trade agreement is signed, these tariffs are reduced or removed entirely. The reason why countries like New Zealand look to sign FTAs with other nations is because it allows for producers of goods like dairy or meat to make better profits from international markets.

Another big trade barrier between countries is quotas. Quotas on imports are basically limits on how many things you can import from a certain country. For example, without free trade agreements, there could be a quota made on cars to limit the number entering New Zealand from foreign producers.

Without tariffs and quotas on the goods that are being sold from New Zealand abroad, business owners are able to make more profit off the goods they already sell. For example, New Zealand’s free trade agreement with China allows businesses like Fonterra to sell their products in China without having to pay to get it into the country, which means more money coming into New Zealand off our exports.