‘GO AHEAD WITH TRADE PACT’
Give up on US and incorporate TPP standards into other regional deals, urges ASPI
ASIAN countries should pursue a Pacific trade pact even after the United States walked away, and its standards should be incorporated into other regional deals, according to a report authored by half a dozen former trade envoys.
Donald Trump withdrew from the 12-nation Trans-Pacific Partnership (TPP) in one of his first acts as US president, throwing an agreement that covered 40 per cent of the global economy into disarray.
That’s left the other nations scrambling on what to do: Either try and proceed without the US, hope Trump changes his mind (or Congress does), or prioritise a separate regional deal being championed by China.
The president has attacked trade deals in general and touted an “American First” doctrine that would punish countries whose policies are deemed by the administration to be undermining US jobs.
But the rest of the world shouldn’t embrace Trump’s protectionism, the Asia Society Policy Institute (ASPI) report argues.
“Just because the US is less supportive of trade and globalisation does not mean that the rest of the world will follow suit,” said the report authored by Wendy Cutler, a nearly threedecade veteran of the Office of the US Trade Representative, and six former trade officials from Australia, China, Japan, South Korea, Indonesia, and the Philippines.
“Should protectionism and isolationism prevail, the Asia-Pacific region could become less open and integrated, upsetting the regional economic and security balance,” said the writers.
Trump’s administration has declared the US isn’t bound by decisions made at the World Trade Organisation (WTO) and said America planned to defend its “national sovereignty over trade policy”.
The clouded future for TPP — a higher-valued pact that included provisions for things like intellectual property, state-owned enterprises and environmental and labour standards, has seen some Asian nations turn to the 16-nation Regional Comprehensive Economic Partnership (RCEP), seen as a more traditional deal.
The WTO and Asia-Pacific Economic Cooperation forum should take the lead communicating the benefits of free trade agreements “using concrete terms which are meaningful to the everyday interests and concerns of ordinary people”, said the ASPI report.
The authors concluded that regional trade pacts were the best path for liberalising trade, raising standards and promoting reforms.
And they called on the US to reconsider its participation in TPP and welcomed proposals by some TPP signatories to go ahead regardless.
Australia is pushing for a TPP without the US. At least 11 countries, including China, Japan and South Korea, would attend a March 14-15 summit in Chile on trade where the TPP would be discussed, according to a report by Bloomberg BNA.
The ASPI report recommended RCEP nations seek a “high-quality agreement and not be tempted to adopt the lowest common denominator approach”.
The latest RCEP talks concluded in Japan last week without signs of significant progress, with the next round expected in the Philippines in May.
Should protectionism and isolationism prevail, the AsiaPacific region could become less open and integrated.” ASIA SOCIETY POLICY INSTITUTE