from the more-important-in-the-short-term dept
Recently, Techdirt has written dozens of stories about the Trans-Pacific Partnership agreement (TPP). That's largely because it seemed to be coming to a conclusion, after many years of negotiations, and so it was important to capture the last-minute twists and turns -- and the dirty deals -- as they happened. But as we reported a few weeks ago, that final breakthrough and completion never happened. Instead, we had the "Maui meltdown", when a whole bunch of old and new problems raised their heads, with the result that TPP may have missed a key deadline that means it won't be happening soon, if ever. That may have seemed an extravagant claim, but it is a sentiment that is gradually beginning to spread among commentators in Asia. Here, for example, is The Diplomat, a specialist title covering that part of the world:
The Trans-Pacific Partnership is in trouble. Trade ministers failed last month to conclude the massive 12-nation trade deal by their hoped-for summer deadline, putting negotiations in danger of collapse.
The Straits Times offers a very similar view from Singapore:
The Trans-Pacific Partnership (TPP) seems to be in deep trouble. Earlier this month, negotiators in North America tried to resolve differences over auto parts which were -- along with issues on dairy and sugar -- among the key obstacles to the deal which was meant to be finalised last month in Hawaii.
Another specialist title for Asia, Nikkei Asian Review, goes further, and makes the following comment:
But as the weeks tick by, the chances are dwindling that these obstacles can be overcome in time to get the agreement to the United States Congress for approval before the US presidential primary elections begin in earnest in February next year.
And everyone seems to agree that once the primaries begin, the TPP is off the agenda indefinitely.
The truth is that the TPP is a second-best option for Asia that will create significant adjustment problems, especially for smaller countries. The priority for Asia should be the RCEP, and if the U.S. and other countries want closer trading relations with Asian countries, it should be in that context.
Techdirt introduced the Regional Comprehensive Economic Partnership (RCEP) back in June, pointing out that it could end up even worse than TPP. But while TPP is at a standstill, RCEP seems to be moving forwards, as this article in The Jakarta Post explains:
Southeast Asian countries and their trading partners will continue their talks on the Regional Comprehensive Economic Partnership (RCEP) this October as China and Japan eventually agreed on certain thresholds for import duties on Monday.
The biggest difference between TPP and RCEP is that China is part of the latter, but not of the former, while for the US, it's the other way around. China therefore has a big incentive to make RCEP happen quickly, and seems to be grasping the opportunity opened up by TPP's latest problems. Here's what Australia's Financial Review writes in an article entitled "Asian countries shift focus to regional trade after TPP delay":
The agreement between the two countries, which do not yet have bilateral free-trade agreements, will be a milestone for the RCEP as the duties had become one of stumbling blocks for the talks, which first began in 2013.
Australia has focussed more on the US-led TPP in recent months on the basis that it would set important new principles for 21st century commerce in areas including services and regulation but the government now appears to be less confident of any swift conclusion to the TPP.
The article also notes that RCEP has a big advantage in that it is not trying to define an ambitious set of new trading rules, as TPP is, but instead is merely attempting to harmonize existing trade agreements among RCEP's 16 nations, which also include another major economy absent from TPP -- India. The Financial Review column concludes with another small but telling indicator that Asian interest may be shifting away from TPP and towards RCEP:
A participant in the meeting said China appeared to be seizing the opportunity to bring the RCEP to a conclusion after it had been seen to be languishing. [Australia's trade minister] Robb supported the Chinese objective of pushing for a conclusion.
Thai deputy commerce minister Apiradi Tantraporn said that while Thailand might want to join the TPP in the future, the RCEP was more important in the short term.
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