Disagreement over TPP pact as ministers huddle in Vietnam

11-Nov-2017 Intellasia | AFP | 4:12 PM Print This Post

Asia-Pacific nations were still struggling Friday to salvage the sprawling TPP trade deal following America’s rejection of the original pact, with Canada refuting reports an agreement in principle had been struck.

The Trans-Pacific Partnership (TPP) was initially a US-led initiative between 12 nations accounting for 40 percent of global GDP, but deliberately excluding Washington’s regional rival China.

It was thrown into disarray when US President Donald Trump abruptly pulled out of the deal at the start of the year, dismaying allies including Japan, Australia, Canada and Vietnam.

Trade ministers from the remaining members – dubbed the TPP-11 – are trying to save the pact on the sidelines of the annual Apec summit in Vietnam.

Ministers from 11 remaining TPP members are in Vietnam wrangling over details of the deal Ministers from 11 remaining TPP members are in Vietnam wrangling over details of the deal (AFP Photo/Anthony WALLACE)

Reports in Japanese media late Thursday quoted Japanese delegation officials as saying an agreement in principle had been reached to press ahead without the US.

But optimism for a breakthrough was dashed by Canada’s trade minister Francois-Philippe Champagne who tweeted: “Despite reports, there is no agreement in principle on TPP.”

Malaysian prime minister Najib Razak said TPP-11 negotiators had been burning the midnight oil until 3am on Friday and would gather again in the afternoon in an attempt to hash out a deal.

“There’s a lot of progress, our ministers and officials are working very hard,” he said during a panel discussion Friday morning at the Apec summit.

“I am reasonably confident, I am quite sanguine that we’ll get a deal,” he added.

- ‘Metrics changed’ -

Japan, the world’s third largest economy, is leading the charge to revive the TPP, keen to demonstrate that multilateral trade pacts can thrive without US support.

Other nations, including Canada, Malaysia and Vietnam, are wrangling over whether some initial elements can be suspended to avoid the collapse of the pact.

Canada wants to keep the strong “gold standard” elements of the deal, including guarantees on upholding labour rights inside signatory countries.

But economies such as Malaysia and Vietnam, with its massive state sector, are less inclined to concede ground on testy areas like labour rights and the environment now thar the carrot of access to American markets has been taken from the table.

Without the US, TPP-11 only represents 13.5 percent of the global economy but the remaining countries are scrambling to avoid the deal’s collapse, especially given the increasingly protectionist winds sweeping through the United States and Europe.

In an interview with Bloomberg, Australian trade minister Steven Ciobo said Washington’s withdrawal had “changed the metrics” for a number of the remaining TPP countries.

He said that TPP negotiators were working on ways to “suspend the operation of certain parts” of the original deal in the hope of reaching an agreement over the rest of the trade pact.

Trump’s spectacular emergence has unpicked decades of US-led work towards more open global trade and lower tariffs.

The original TPP deal was previously described by the US as a “gold standard” for all free trade agreements because it went far beyond just cutting tariffs.

It included removing a slew of non-tariff measures and required members to comply with a high level of regulatory standards in areas like labour law, environmental protection, intellectual property and government procurement.

Washington’s withdrawal has paved the way for China to portray itself as the new global leader for free trade.

But critics say Chinese-led initiatives are much weaker on labour and environmental standards.




Category: FinanceAsia

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