Trans-pacific partnership update.

• Author: Salov, Alex
• Position: SPECIAL SECTION: International Trade

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) between the United States and eleven countries around the Pacific Ocean basin. The purpose of the TPP is to expand trade of nearly all goods and services by reducing the existing barriers in the region. The twelve negotiating countries account for nearly 40 percent of the world's GDP. It is the largest trade agreement since NAFTA and covers a wide range of aspects stretching from car manufacturing and intellectual property rights to e-commerce and tariffs on rice and dairy products.

TPP Timeline

The TPP negotiations started in 2005 between Brunei, Chile, New Zealand, and Singapore. The United States joined the negotiations in 2008 together with Australia, Peru, and Vietnam. During the following five years, Malaysia, Canada, Mexico, and Japan also entered the negotiations. Since joining the TPP talks, the idea of leading such a trade agreement became a part of the US "Pivot to Asia" strategy.

This strategy is based on the reorientation of American foreign and trade policies to the Asia Pacific region, where the twenty-first century political and economic activities will be the most prolific. It is also widely seen as a tool to counterbalance and restrain further economic expansion of China in the region. Therefore, from the US perspective, the TPP is also of a significant geopolitical importance.

Doomed to Fail?

During the recent presidential elections, the TPP one of the topics of which both candidates had similar views. They both considered it necessary to at least revisit the TPP if not to walk away from it. In an early post-election public statement, the President-elect was clear on the fact that the United States should withdraw from the TPP as it can be "a potential disaster for our country." As originally anticipated, if either the United States or Japan (the two largest GDPs of the TPP participants) fail to ratify the TPP domestically, then, almost certainly, the agreement is doomed to failure.

Japanese Diet [The National Diet is Japan's bicameral legislature] actually ratified the TPP in November 2016 (being the first country to do so), but it was rather a symbolic action given the current position of the new US government. Prime Minister Shinzo Abe stated that, without the participation by the United States, the TPP would be "meaningless," but still expressed a hope that the ratification would prompt the President-elect to change his mind.

Later...