What now for the TPP?

Here are some key questions about the pact and its prospects.

What now for the TPP?

World Bulletin / News Desk

It was billed as the world's biggest trade deal, a feather in the cap of globalisation advocates that promised to re-write the rules for 21st century commerce.  

But the Trans-Pacific Partnership was tossed into disarray in January after President Donald Trump pulled the US from the pact, branding the deal a "job killer". 

On Sunday the 11 other signatory nations vowed to revive the deal, leaving the door open for the return of the world's biggest economy.

  What is the TPP

The Trans-Pacific Partnership is one of the most ambitious free trade pacts ever negotiated.

Initially, it brought together 12 Pacific Ocean economies -- the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Before the abrupt exit of the deal's largest partner -- the United States -- the signatories accounted for a whopping 40 percent of the global economy.

Under former US president Barack Obama it was sold to American allies as a unique opportunity to seize the initiative on worldwide trade -- and ensure China does not get to dictate global terms of commerce.

Supporters said it would scrap barriers to the free flow of goods, services and investment capital.

They also hailed the potential to ensure a level playing field for all firms, as well as protecting workers' rights and the environment -- breakthrough issues in emerging markets such as Vietnam.

 Why did Trump junk it?  

Scrapping the TPP was an oft-repeated Trump campaign promise, and the first major move on trade he took after taking office. 

He called the deal a "rape" of American interests and blamed free trade pacts like the TPP on the loss of American jobs, though most experts agree automation is behind a decline in industrial work.  

Trump trade officials have called for "fair" trade deals, vowing to plough efforts into bilateral trade pacts instead of multilateral deals, including with countries in Asia-Pacific.  

 So how can the deal survive?

Under the original terms of the TPP, the pact had to be ratified by six countries that account for a combined 85 percent of signatories' GDP. With the US out of the deal, that is impossible to achieve. 

But the remaining nations -- the so-called TPP 11 -- have options. They can change the clause outlining ratification rules to allow the deal to move ahead. 

Yet some fear that tinkering with the terms of the pact after years of already gruelling negotiations, could re-open treacly issues between the countries. 

  Can the US come back? 

Members have said the door remains open for the United States -- and other countries like South Korea and Columbia which have expressed interest -- to join. 

While analysts say it is unlikely that Trump will return to the deal any time soon, the unpredictable leader has been known to reverse his position on previous pledges. 

 What's in it for the TPP 11? 

The TPP is called a "high quality" trade deal, meaning that it goes deeper than other free trade agreement in terms of terms of labour regulations, environmental rules, intellectual property protections and other requi1rements.

Without the TPP, there are no other "high quality" deals on the table for signatories.

Plus, even though the pact is seriously weakened without the huge US market, it does still allow smaller economies like Vietnam greater access to big economies such as Japan's.

  What does China think? 

The TPP was seen as a mechanism to counter China's economic clout.

And the world's second largest economy is unlikely to welcome its revival. 

But China also has its own trade pact -- the Regional Comprehensive Economic Partnership (RCEP) -- currently under negotiation. 

That deal brings together the 10 Southeast Asian countries of ASEAN, as well as China, India, Japan, South Korea, Australia and New Zealand.

Something of a mirror image to TPP, it does not include the US and is less ambitious on issues like employment and environmental protection.

 

Last Mod: 21 Mayıs 2017, 16:01
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