Shadow of TPP fiasco hangs over China-led Asia free trade talks
tokyo — Negotiators from 16 Asia-Pacific countries on Monday held their first round of free trade talks since hopes faded of reaching a separate regional deal after the US pulled out.
The five-day Regional Comprehensive Economic Partnership (RCEP) talks in the western Japanese city of Kobe are being attended by senior officials from the 16 countries involved, a Ministry of Economy, Trade and Industry (Meti) official said.
The United States is not part of RCEP, which has been pushed by China. Apart from Beijing, the planned pact would group the 10 members of the Association of Southeast Asian Nations plus India, Japan, South Korea, Australia and New Zealand.
Within days of taking office, President Donald Trump pulled out of the separate Trans-Pacific Partnership (TPP), an ambitious free-trade agreement championed by his predecessor Barack Obama but which Trump claimed was harmful to the US.
The move fulfilled a key campaign promise but left allies in Asia on the back foot. The TPP had been seen as an economic guarantee of US commitment to the region in the face of the growing influence of China, which was not a member.
A more modest deal
RCEP is seen as a more modest deal that calls for lower and more limited regulatory standards.
During the meeting — the 17th round — participants are aiming to “push negotiations forward broadly in the fields of goods, services, investment, intellectual property, rules of origin, competition and electronic commerce,” the Meti official said.
“It is important to strike a quality deal in RCEP at a time when protectionism is emerging around the world.”
Trade negotiators are under pressure this week to make progress on the blockbuster Asia pact. But officials meeting in Japan face some significant sticking points.
China is championing the 16-nation RCEP. It’s a chance for it to seize the moment amid the US president’s protectionism.
Still, some nations are uneasy about rushing to get the RCEP done, even with the failure of the TPP. And while the talks should be simpler — the RCEP is more of a traditional trade deal — there are disputes over tariff cuts and the service sector.
“The stumbling blocks are multiple,” according to Iman Pambagyo, the RCEP trade negotiating committee chief. Pambagyo, who is director-general of international negotiations with Indonesia’s Trade Ministry, said negotiators had only agreed on about 700 of more than 5,000 tariff lines covered in the deal.
The RCEP could help develop supply chains in Asia, according to Japan’s State Minister for Foreign Affairs Kentaro Sonoura.
“This is the first meeting of the year,” he said. “I have strong expectations of progress towards the early conclusion of a high-quality agreement.”
‘Speed over quality’
Still, the Japan meeting may only take officials about 30 per cent of the way to a deal, said an official involved in the talks. Some countries want to offer different degrees of market access to member nations,
The seven countries in both the TPP and rCeP are busy scrambling to figure out what to do about TPP with the us withdrawal
Deborah Elms, executive director of the Asian Trade Centre
but that is not an approach with universal support, said the official.
For the RCEP, “it depends whether they prioritise speed over quality,” said Yorizumi Watanabe, a former trade negotiator with Japan’s foreign ministry, now a professor at Keio University. “It’s possible RCEP could take over from TPP as the model for future agreements. But if they try to rush, it might be thin.”
The shadow of the TPP will hang over the Kobe meetings. While China pushes the RCEP, some TPP members are calling for that pact to be revived: By proceeding without the US, or waiting for Trump to change his mind.
Australia insists the TPP can continue without the US and will seek support for that view in ministerial talks next month in Chile. A spokesperson for Trade Minister Steven Ciobo said negotiations on the RCEP are challenging and significant work remains on market access.
“The seven countries in both the TPP and RCEP are busy scrambling to figure out what to do about TPP with the US withdrawal,” said Deborah Elms, executive director of the Asian Trade Centre, a Singapore-based consultancy. “If TPP does not move forward, it is possible that many TPP provisions will be moved across into RCEP by some members.” — AFP, Bloomberg