Japan is leading the effort to foster an new free trade agreement among the remaining 11 members of the Trans-Pacific Partnership (TPP) at APEC talks this week following the withdrawal of the United States back in January.
Trade ministers from the 11 nations left abandoned when the United States dropped out of the Trans-Pacific Partnership free trade agreement in early 2017 are progressing on a new agreement without U.S. involvement.
The nations, meeting on the sidelines of the Asia Pacific Economic Cooperation (APEC) meetings in the Vietnamese coastal city of Danang, are trying to resurrect the sweeping Pacific Rim agreement that would eliminate tariffs on goods and services while also addressing intellectual property rights and labor conditions.
The talks, according to news reports, are being led by Japan, which is being pressured by the Trump Administration to engage in a bilateral free trade agreement with the United States. Trump walked away from the TPP also immediately upon assuming office, holding true to a campaign promise to ditch the trade pact. Trump and his trade advisors have characterized the TPP as unfair to U.S. businesses and workers.
By walking away from the deal, Trump effectively submarined the TPP, but the remaining nations almost immediately began discussing whether an 11-member TPP would be achievable. Some analysts believe the other members are hopeful that the United States could be enticed to rejoin talks if it’s clear a TPP without the United States would move forward. But the Trump administration has made bilateral FTAs a clear priority.
The fact that Japan is leading the way on this new plurilateral deal is a clear indication that other countries may not agree with Trump’s preference for bilateral agreements.
The other complicating factor for a revised TPP is whether Canada and Mexico are interested in moving forward without the United States. Both countries are heavily engaged in negotiations over revisions to the North American Free Trade Agreement (NAFTA) and had negotiated the TPP with the belief that TPP provisions could effectively replace many of those in NAFTA.
Though there has been urgency in talks this week among the 11 TPP nations spurned by the United States, it’s not clear whether an agreement can be reached before the APEC summit closes.
According to reports from Reuters news service, trade ministers for Canada, New Zealand, and Malaysia, in particularly, have been reluctant to fast track such a deal.
“We have collectively reached the stage where we can discuss a proposal for a final package for an agreement in principle of the TPP,” Japanese Economy Minister Toshimitsu Motegi told ministers from the other countries, as reported by Reuters. “I would like to emphasize once again the importance of reaching an agreement in principle right here.”
But according to a tweet from Shawn Donnan of the Financial Times, sources have confirmed to FT that the 11 countries have in fact agreed on a deal that will be announced tomorrow in Da Nang.
The TPP was seen by trade analysts as a way for members to offset China’s regional influence by boosting trade ties. Most TPP members rely heavily on trade with China, either as a consumer of finished goods produced in China, or as a supplier of raw materials or semi-finished goods to China.
Spurned TPP members press ahead with Pacific Rim trade agreement
