♠ Posted by Emmanuel in Trade
at 11/15/2017 02:50:00 PM
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| If you can't spot the sucker at the trade negotiating table, then it's probably Trump. |
With the United States out of the picture, though, it looks like it's not going to have the same exact terms. Rather, the parts of TPP that were put in largely at the behest of the United States are going to be put in abeyance for now should a "Comprehensive Progressive Trans-Pacific Partnership" deal be finalized:
The 11 remaining members of the defunct Trans-Pacific Partnership (TPP) on Saturday reached an agreement to proceed with the trade pact under a new name and without the United States, as China, which is not involved, said the revised arrangement would not affect initiatives backed by Beijing.
Vietnam’s Industry and Trade Minister Tran Tuan Anh said on the sidelines of the Asia-Pacific Economic Cooperation summit in Da Nang that following three days of negotiations, ministers from the countries involved had decided to call the new regional free-trade arrangement the “Comprehensive Progressive Trans-Pacific Partnership. We have reached agreement on a number of fundamentals,” he said.Tran said the spirit of the former TPP agreement would endure, maintaining its high standards regarding trade practices, but the members would suspend certain clauses in light of the new situation. The countries have yet to reach consensus in four areas so a date for signing the new deal has yet to be finalised.Tran said: “The ministers will have negotiations to discuss the remaining technical issues that have not been agreed yet as well as the legislative matters needed to put the agreement into implementation.” Japanese Economy Minister Toshimitsu Motegi hailed the Da Nang talks as a “success”, saying they had managed to limit the number of suspended items to 20.
Obviously, CPTPP is a misnomer since it would leave a lot of the bits from the original out. An important point is that the Southeast Asian countries participating in the original TPP negotiations, Malaysia and Vietnam, were most eager to participate to improve their access to the US consumer market--still the world's largest. Without that "carrot" on offer, those two and likely the other developing countries were less willing to take the "stick" of accommodating US preferences that were largely of benefit to the United States.
I'll take the opportunity to also point out that the United States doesn't exactly "stand still" by sitting out TPP negotiations. Insofar as countries in it will gain improved market access to each other while the United States does not, America stands to lose out. I'm thinking here of the likes of Australia and New Zealand which may gain market share in burgeoning Asian markets for agricultural products at the United States' expense:
Once the new deal is implemented, American farmers could be left at a disadvantage: The agreement seeks lower tariffs for goods traded among members, the bulk of which are Asia-Pacific nations. That means non-member countries, such as the U.S., will still face high rates when shipping to Asia-Pacific. "It's going to really benefit farmers and agricultural producers here in Asia-Pacific and not the U.S.," [trade specialist Arthur] Okun told CNBC.
Ditto for American SMEs:
American small businesses will also feel the pain, Okun explained. Many U.S. small and medium-sized enterprises depend on the exports of goods and services to Asia. They will likely become less competitive as a result of exclusion from the new TPP, which seeks to facilitate easier access to regional supply chains for SMEs.So, above all the ways the United States is screwed with Trump, this is probably going to be the cherry on top in the medium- to long-term. Then again, you don't expect the buffoon to be there forever. In fact, he may soon be removed from office due to his dalliances with Russians. If so, Vice-President Mike Pence is an avid free trader by contrast who'd probably complete TPP quickly. The reason why TPP's America-friendly provisions aren't being replaced altogether is partly based on the expectation that there's a good chance that a trade-friendly American leader will assume the presidency and make the TPP whole again. Perhaps during the 2020 elections, but right now, the rest of the world has literally left America behind.
