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AseanAffairs Magazine May - June 2011





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David Swartzentruber


Leaders of TPP member states and prospective member states at a TPP summit.

Many Asian countries are considering joining the new US-backed free trade agreement currently in the works, the Trans-Pacific Partnership. Will it work? What are its implications?


Billed as a “21st Century Trade Agreement “the Trans-Pacific Partnership (TPP) was first announced on December 14, 2009, by United States Trade Representative Ron Kirk. He notified the US Congress that President Obama intended to enter into negotiations of a regional, Asia-Pacific trade agreement, known as the Trans-Pacific Partnership Agreement with the objective of shaping a high-standard, broad-based regional pact. The TPP is the first regional agreement in which the US is participating in Asia. Its completion will also create one of the world’s most important trading blocs.

With the World Trade Organization (WTO) Doha Round of negotiations facing stalemate or collapse, the Trans-Pacific Partnership Agreement (TPP) will become the single most important US trade initiative after the US Congress passes the Korea, Colombia, and Panama free trade agreements (FTAs).

The TPP enjoys support from both political parties in the US and the current nine- Leaders of TPP member states and prospective member states at a TPP summit.

member TPP is seen as a potential building block for a larger Free Trade Area of the Asia-Pacific Agreement (FTAAP). The Asia-Pacific constitutes the most dynamic economic region in the world, accounting for about 60 percent of global gross domestic product, 50 percent of international trade and 40 percent of the global population. The TPP has overwhelming importance, not only for the United States but also for the Asia-Pacific.

The seventh round of TPP negotiations was in June in Vietnam and it is hoped that the trade pact will be ready for signing at the APEC meeting in Honolulu in November.

Many members are now suggesting that only “substantial progress” will have been made by November.

The nine countries currently on board in the negotiations are Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the United States. The nine TPP members are already linked by 25 different agreements at the bilateral or regional levels.


Japan and Thailand have also expressed interest in joining the pact, even though there were initially protests from Japan’s highly protected agricultural sector. However, in the wake of the tsunami and nuclear disasters, Japan is not sure that it can decide to join soon. Japan gave no time frame on the delay, although one cabinet member said a decision would have to be reached by November. The same Japanese minister charged with regulating nuclear energy is also the key trade official in Japan who would be responsible for TPP talks, so this delay is reasonable.

Foreign investors, led by Japanese firms operating in Thailand, have expressed their concerns and called on the Thai government to join the TPP negotiations, on which the US has taken the lead, said Srirat Rastapana, director-general of the Thai Foreign Trade Negotiation Department.

Many Asia-Pacific Economic Cooperation (APEC) members, a forum for 21 Pacific Rim countries, have continued to express interest in joining the negotiations. TPP ministers agreed to continue to work bilaterally with interested countries and to consider the membership of any APEC members if and when they are ready to meet the high standards of the agreement.     


TPP will feature what are described as “new horizontal, cross-cutting issues.” These include such issues as promoting connectivity to deepen the links of U.S. companies to the emerging production and distribution networks in the Asia-Pacific; making the regulatory systems of TPP countries more compatible so U.S. companies can operate more seamlessly in TPP markets; helping small- and medium-sized enterprises, which are a key source of innovation and job creation, participate more actively in international trade; and supporting development.

Negotiating teams have made good progress in negotiations over access to each others’ markets for industrial goods, agriculture, textiles, services, investment and government procurement, it is reported Though progress has been steady, competing interests and complex structural issues may slow down or stall the negotiations--including internal US divisions on central issues and substantive disagreements among key countries on questions related to intellectual property, investor-state relations, labor and environmental regulations, and the difficult task of creating a regional framework from existing FTAs.

TPP member countries must also come to an agreement on how to harmonize regulations that have a major impact on international trade. Officials have still not decided how to consolidate bilateral agreements together at the end of the process.

Reaching textual consensus on the major issues before the hoped-for November 2011 deadline is unlikely. TPP countries will probably settle for a broad framework agreement, with negotiations extending into 2012. Easy adoption of the pact is not a given.............


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