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US-backed Pacific trade deal a boon for e-commerce – FedEx, DHL

A landmark US-backed Pacific trade deal will give a boost to an already booming e-commerce industry in the region, executives at global delivery firms FedEx Corp and Deutsche Post DHL Group told Reuters.

The Trans-Pacific Partnership agreement, which seeks to liberalise commerce across 12 Pacific Rim nations accounting for 40 per cent of the world’s economy, was reached last month. The deal has yet to be ratified by each country.

“E-commerce is huge. It’s a $2 trillion economy in itself,” David Cunningham, chief operating officer of FedEx Express, the air and ground delivery arm of FedEx Corp, said on the sidelines of an Asia-Pacific Economic Cooperation summit in Manila.

“As long as we continue to advance trade liberalisation and make substantial steps forward like TPP, then I think we are going to see e-commerce continuing to grow,” he added.

This will particularly benefit SMEs to trade more internationally

Some of the reduced or eliminated tariffs will help to drive greater trade flows among the TPP countries and translate into bigger shipment volumes, Deutsche Post DHL chief executive Frank Appel said in an email.

“Among the new trade issues which are included in the TPP are e-commerce. This will particularly benefit SMEs to trade more internationally,” he added.

If ratified, TPP will be a legacy-defining achievement for US President Barack Obama and his administration’s pivot to Asia.

But the deal, facing stiff opposition from many Democrats and unexpected resistance from Republicans, is unlikely to be voted on by the US Congress before Obama leaves office, according to some Republican lawmakers and aides.

FedEx Express COO Cunningham said the support of businesses was important to help ensure the ratification of the deal in the United States.

“I think the key for that is really going to be that businesses come out to support this,” he said. “Not only bigger businesses like FedEx, but also small and medium sized enterprises who are the primary beneficiaries of this agreement.”

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