Trans-Pacific partnership undone by geopolitical agenda
THE REGIONAL Comprehensive Economic Partnership's Asian trade deal charts a slow and steady progress despite the likely demise of the US-led Trans-Pacific Partnership.
The Trump shock is big, extending well beyond the US. For more than a week now, there has been a flood of commentaries discussing what the US president-elect’s Asian policy will look like and the probable winners and losers.
Lots of commentators said that as part of the Obama legacy, the Trans-Pacific Partnership (TPP), an initiative the United States joined to lead in 2008, is a loser.
At the same time, the Regional Comprehensive Economic Partnership (RCEP) — allegedly a China-led initiative — is described as a winner.
A forgotten fact is that neither of these free trade zone deals has really existed. The TPP was originally an agreement of four countries, Brunei, Chile, New Zealand and Singapore, in 2005. It was not until 2008 that Australia, Canada, Japan, Malaysia, Mexico, Peru, the US and Vietnam joined the discussion for a broader agreement.
The final proposal was signed by heads of state from the 12 countries in February this year in Auckland, New Zealand. A comprehensive 30-chapter agreement was awaiting ratification when the US presidential campaign started.
Candidates from both parties opposed the deal, Trump being the fiercer critic.
One salient feature of the TPP is its exclusion of China and India. And it does not include all members of the Association of Southeast Asian Nations — for instance, Indonesia and Thailand are left out.
Although no one said openly that China is not welcome, officials of the Obama administration took it at least in part as a political instrument, and repeatedly said (including Obama himself) that it would allow the US, not China, to write the rules for free trade.
But perhaps it is this added political purpose, chased by a government in haste (during the second term of the Obama administration), that will prove to be the TPP’s undoing.
After Trump’s election victory, the Obama administration announced it would no longer try to get the TPP approved by Congress.
An economic deal encumbered with excessive expectations can easily break. Too much unrelated significance attached to a deal can leave the dealmaker distracted and unready.
