After US President Donald Trump announced the US’ withdrawal from the Trans-Pacific Partnership (TPP) Agreement, history’s largest trade deal to date congregating around 40 per cent of the world’s economy seemed to have fallen through. However, the eleven remaining member states decided to go ahead with the deal and may well reach a revised agreement at APEC Vietnam this November.
|The TPP would be history's largest trade pact to date (Source: asiapacific-security.blogspot.com)
On March 15 in Vina del Mar (Chile), TPP member states held their first meeting since the US’ withdrawal, expressing their determination to realise the deal. Since then, negotiators showed little signs of stopping, with Japan and New Zealand stepping up as the primary proponents of carrying through the deal, and have agreed upon hammering out the deal by the November APEC Summit in Danang, Vietnam.
The APEC meetings in Vietnam have indeed served as an important platform to further TPP negotiations. In the May APEC Trade Ministers' Meeting in Hanoi, participating ministers assigned their trade officials to prepare an assessment of the options available to realise the TPP. Additionally, the November summit in Danang will be the milestone to see decisive action from members, potentially culminating in the signing of an agreement or on agreeing to sign one.
Alan Bollard, executive director at the APEC Secretariat, told CNBC that there is a “reasonable chance” that leaders will actually sign a document in November or agree on signing one. However, there are a number of obstacles in front of the historic deal, one of them being the Japanese lower house elections on October 22.
As a major driver behind negotiations, a potential change in the country’s political setup would effectively take much of the wind from the TPP’s sails.
"Japan has been leading a lot of this renegotiation, and so we've yet to see who the new government will be and what their views will be," CNBC cites Bollard, a former governor of New Zealand's central bank. "It's not to say that will change, but there'll be some last-minute scrabbling around."
Originally, US President Barack Obama was a strong supporter of the TPP, which he aimed as a tool to remove international barriers to trade and investment, connecting 40 per cent of the world’s economy. However, President Trump’s decision to withdraw forced TPP member economies to reconsider the grounds of the deal.
Mexican Foreign Minister Luis Vindegaray was cited as saying that any future accord will have to be of the same “high quality” as the TPP in terms of labour regulations, environmental regulations, intellectual property protection, and other requirements. Additionally, any replacement deals would have to come “in the short term,” hence the rather tight deadline for decisive action by November.
Chilean Foreign Minister Heraldo Munoz , who hosted the meeting in Vina del Mar, saw the pact as a potential tool to “generate more certainty” at a time of “protectionist tendencies in some parts of the world.”
With the words of Alan Bollard, there is a reasonable chance the leaders will actually sign a document or agree on signing one in November in Danang, reviving member economies’ dreams of a historic trade pact, removing trade barriers between the most dynamic and some of the largest economies around the globe. However, a lot is still going on behind the scenes, with the US and members still evaluating their stances.