Waiting with bated breath for the outcome of the Trans-Pacific Partnership (TPP)? Planning your company’s five-year strategy on the basis of a border-less market spanning Asia and NAFTA in a Pacific free market?
I am not surprised – this could be Doha 2.0 that no one has heard about.
We have all switched off the WTO’s failed Doha free trade agreement long ago and most business folks’ eyes glaze over at the mention of marathon intergovernmental negotiations attempting to reach agreements on anything.
However, as great as the challenges are, the TPP would be a major development for Corporate America – both exporters and importers – if ink dried on a final agreement.
“OK, you have got my interest,” I hear you say, so what is it?
The FT says the stated aim is to deepen trade by addressing issues such as government procurement, intellectual property protection and the conduct of state-owned enterprises. It is also meant to update trade agreements by dealing with post-WTO developments, including e-commerce and cloud computing, as well as addressing labor and environmental standards.
Ostensibly it is a proposed 12-member free trade zone, currently to include the USA, Australia, Canada, Malaysia, Mexico, Peru, Brunei, Chile, New Zealand, Singapore and Vietnam. So who’s missing?
Yep, China (more on them in a moment), and South Korea and Thailand. The latter two nations have both recently voiced an interest in getting involved. Japan is a surprise inclusion, often viewed as a free trade laggard according to the Financial Times, but now participating in negotiations armed with a list of special exemptions.
China and the TPP
The TPP group accounts for two-fifths of global output and one-third of international trade, and encompasses some of the fastest-growing economies in the world. Intriguingly, after loudly condemning the idea as a plot to contain China’s rise, the Communist state has altered its position in recent months and the FT suggests Beijing may even seek to join.
Their objection may have had much to do with one of the objectives of the agreement, namely to regulate the role of state-owned enterprises (SOEs), so that they do not enjoy unfair access to licenses, contracts or state finance. But if fully applied, most countries could be accused of falling foul.
Which ones? Continued in Part Two.