What now for the TPP?

The Myanmar Times - - International Business -

AF­TER Don­ald Trump vowed to aban­don the Trans-Pa­cific Part­ner­ship, here are some key ques­tions about a huge trade pact that sup­port­ers said would write the rules for 21st-cen­tury com­merce – but which might now be doomed.

What is the TPP?

The Trans-Pa­cific Part­ner­ship is one of the most am­bi­tious free trade pacts ever ne­go­ti­ated.

It brings to­gether some of the di­verse economies that abut the Pa­cific Ocean – Aus­tralia, Brunei, Canada, Chile, Ja­pan, Malaysia, Mex­ico, New Zealand, Peru, Sin­ga­pore, the United States and Viet­nam – and that ac­count for a whop­ping 40 per­cent of the global econ­omy.

Un­der US Pres­i­dent Barack Obama it has been sold to American al­lies as a unique op­por­tu­nity to seize the ini­tia­tive on world­wide trade – and en­sure China, with its surg­ing econ­omy and grow­ing global im­por­tance – doesn’t get to dic­tate the terms.

Sup­port­ers say it would do away with bar­ri­ers to the flow of goods, ser­vices and in­vest­ment cap­i­tal.

They claim it would also en­sure a level play­ing field for all firms, pro­tect­ing labour rights and in­cor­po­rat­ing im­por­tant en­vi­ron­men­tal safe­guards.

So why does Trump want to junk it?

Crit­ics say the TPP was ham­mered out dur­ing se­cre­tive meet­ings in lux­ury ho­tels and will do lit­tle other than ben­e­fit the usual sus­pects – big busi­nesses.

Mr Trump’s in­sur­gent pres­i­den­tial bid was built, in part, on a pledge to over­turn the trade deals that many of his sup­port­ers blame for what they see as a drain of US jobs and cap­i­tal.

They say the TPP would be an­other bad deal for Amer­ica’s in­dus­trial heart­lands, al­low­ing for­eign man­u­fac­tur­ers and food pro­duc­ers tar­iff-free ac­cess to the US mar­ket, mean­ing US firms and farms, whose pro­duc­tion costs are higher, could not com­pete.

What’s go­ing to hap­pen to the TPP now?

Many lead­ers have in­vested a lot of po­lit­i­cal cap­i­tal in the TPP, sell­ing it to re­luc­tant elec­torates as a way to yoke Amer­ica closer to the like-minded democ­ra­cies of the Pa­cific Rim re­gion.

Some will be hop­ing that Mr Trump changes his mind be­fore tak­ing of­fice.

If that doesn’t work and he sticks to his guns, a sized-down 11-mem­ber bloc could press ahead and get the agree­ment up and run­ning, leav­ing the door open for a fu­ture US ad­min­is­tra­tion to join up if the po­lit­i­cal tide changes.

Op­tion three is to re-open ne­go­ti­a­tions on the whole thing, which would of­fer Mr Trump the chance to sell an “im­proved” deal to his elec­torate as his suc­cess.

Fi­nally, they could just aban­don it and look else­where for a 21st cen­tury trade deal.

Are there other op­tions for a free trade pact?

Yes – the Chi­nese-backed Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship (RCEP), which brings to­gether the 10 South­east Asian coun­tries of ASEAN, as well as China, In­dia, Ja­pan, South Korea, Aus­tralia and New Zealand.

Some­thing of a mir­ror im­age to TPP, it in­cludes six of the Wash­ing­ton led group­ing’s 12 mem­bers – but not the US, and would en­com­pass more than 3 bil­lion peo­ple.

RCEP is gen­er­ally thought of as less am­bi­tious on things like em­ploy­ment and en­vi­ron­men­tal pro­tec­tion. –

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