Commentary 2016/21, 14 June 2016
In a recent article in Bloomberg (Singapore Urges U.S. Against Tweaking Big Pacific Trade Pact; dated 12 June 2016), there is mention of Singapore’s role as an interlocutor for the US to ratify the Trans-Pacific Partnership (TPP) agreement in its current form. Ratifying the agreement becomes a pertinent issue as none of the US Presidential candidates – Donald Trump and Hillary Clinton – are supporting the TPP. Worse, they are sending signals of lack of support for the trade deal. Domestic interest groups, especially from the auto sector and labour activists, have expressed their unhappiness over the trade pact.
The TPP will fall through if there is any demand by the US for changes in the agreement. It has already been ratified by some member countries, including Singapore and Malaysia. The second largest member of TPP, Japan, has submitted the agreement in its parliament for ratification. Some of these countries and their investors are looking as if TPP is already into play. There is lot of enthusiastic discussion that investments are moving from Taiwan to Vietnam in the textile industry to take advantage of TPP clauses and Vietnam’s membership in the pact. Countries like Indonesia, Thailand, the Philippines and India, who are not yet part of the agreement, are also discussing the TPP in their domestic economies.
The TPP has immense strategic relevance for this part of the world. It is a legal manifestation of the enhanced US economic engagement with East Asian economies. The agreement is a final step in rounding off bilateral trade agreements between East Asian countries and the US that both sides have been contemplating or negotiating for long. For the US, TPP helps it to write the global trade rules.
In this scenario, it is in the best interest of all participating members that an agreement, that was put in place after intense negotiation for five years, gets through the US Congress. Proponents of TPP believe that the best chance for this to happen will be the lame duck session after the November 2016 election and before the new congressional term that begins in early January 2017.
Expectedly, TPP will be a key discussion point for Prime Minister Lee Hsien Loong when he visits DC in August to meet President Obama.
The strategic underpinnings of the TPP agreement is available for download here
Ms. Sanchita Basu Das is ISEAS Fellow and Lead Researcher (Economics) at the ASEAN Studies Centre, and Coordinator of the Singapore APEC Study Centre, ISEAS – Yusof Ishak Institute, Singapore.
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