11 nations agree in principle on TPP Pacific trade deal
Nikkei | 10 November 2017
11 nations agree in principle on TPP Pacific trade deal
UPDATES:
After months of negotiation, the remaining 11 members of the Trans-Pacific Partnership deal have reached agreement on the trade pact in principle on the ministerial level, a decision that could shape the future of business in the Asia-Pacific region for years to come.
"The 11 nations were able to reach a ministerial agreement," Japan’s Economy Minister Toshimitsu Motegi told reporters after talks ended on late Thursday on the sidelines of the Asia-Pacific Economic Cooperation meeting. Leaders of the 11 nations will look to officially agree on the deal on Friday.
The deal is a major achievement for the so-called "TPP 11," who spent months trying to salvage it after the U.S. pulled out when President Donald Trump took office.
The new TPP deal will come into effect once all the member nations have ratified the deal domestically, which only Japan and New Zealand have done so far.
While it is true that without the U.S., the economic impact of the agreement will be much smaller — TPP 11 only makes up 13.5% of the world’s gross domestic product and 15.2% of global trade volumes, as opposed to 38.2% and 26.5% with the U.S. — it is a statement of intent from the Asia-Pacific nations that multilateral trade is the future for them.
It will also give member nations a strong hand against the U.S. as the world’s biggest economy looks to draw favorable deals under bilateral trade agreements.
TPP talks began in 2010 with just eight nations — Australia, Brunei, Chile, New Zealand, Peru, Singapore, Vietnam and the United States. Four others — Japan, Malaysia, Canada and Mexico — asked to join later.
The center of trade negotiations will now shift to Manila, Philippines, where the 16 members that form the Regional Comprehensive Economic Partnership will hold its 21st meeting. While no agreement is likely to be reached in the talks, those supporting free trade hope that the successful conclusion of TPP talks will pressure the less enthusiastic members of RCEP to accept implementing higher standards to the 16-country trade deal.
The RCEP is a mega trade and investment pact being negotiated by the 10 members of the Association of Southeast Asian Nations (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and India, China, South Korea, Japan, Australia and New Zealand.
