2018/97, 31 October 2018
The first mega-regional trade deal, the tongue-twisting Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), has successfully passed the domestic legislative processes of 6 of the 11 negotiating parties. This means that the CPTPP will become a market reality by early 2019.
These six economies account for over 90% of cumulative GDP of the 11 CPTPP signatories with Japan, Canada, Australia, Mexico and Singapore, in order, being the five largest CPTPP economies. New Zealand is the tenth largest
. These six economies represent four of the CPTPP’s five sub-regions – Northeast Asia, Southeast Asia, Oceania and North America. Once Peru or Chile ratify the agreement then South America will become the last CPTPP sub-region to be included. In none of the six countries was the legislative passage of the CPTPP particularly problematic despite changes of government and leaders in some. In the Canadian parliament 84% of voting members supported ratification as did 93% in the New Zealand house and 75% in the Mexican Senate.
Not only is the CPTPP the first mega-regional trade deal since the World Trade Organization to be successfully negotiated and ratified and a good counter to protectionist populism in the US and elsewhere, it is currently the most promising trade diplomacy avenue for further Asia-Pacific regional integration. WTO negotiations are dormant and the ASEAN-led Regional Comprehensive Economic Partnership parties have been discussing what “substantial conclusion” means. We will know more in November when the RCEP leaders come to Singapore but what they agree on here may not be very substantial or very complete. Whereas for the CPTPP, the remaining five signatories will now be under greater pressure to complete their own ratification processes while other economies from South Korea and Taiwan to a post-election Indonesia and a post-Brexit United Kingdom will be more interested in joining the CPTPP. In trade diplomacy momentum is key and at the moment the CPTPP has the most.
Dr Malcolm Cook is Senior Fellow at the ISEAS – Yusof Ishak Institute.
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