What is the issue?
- The US has come out of the Trans-Pacific Partnership (TPP) after Trump's election as the President.
- The other countries in the group are now discussing on the ways to rework the deal, overcoming the initial hesitation and uncertainties.
Why was TPP less attractive without the US?
- The TPP seemed more like a leaderless grouping after the US withdrawal.
- The anticipated economic impact with the loss of the US market hampered the progress of the deal.
- Ex: Countries like Vietnam and Malaysia lost the benefit of preferential access to the US and other North American markets with US withdrawal.
- Being a prominent actor in the regional affairs, the American withdrawal could have a significant impact on the geopolitical effect of the partnership.
- These factors made many countries sceptical of the TPP and drove them to give up on the Transpacific Partnership initially.
How is TPP still optimistic?
- Despite the above uncertainties, countries are now getting back to discussions to revive the deal.
- The rest of the members believe that TPP holds economic and strategic significance even without the US.
- The economic gains are still looked for, with markets like Canada and Mexico.
- Also, earlier members who did not have bilateral FTAs with the US found it hard to comply with US's demands on certain sensitive issues.
- These included issues like the intellectual property, investor-state-dispute-rules, state-owned enterprises and labour standards.
- The US withdrawal has become a source of some relief for these countries which include Brunei, Japan, Malaysia and Vietnam.
- The rework on the deal could make revisions in some chapters of the TPP agreement granting greater flexibilities to members.
- Besides these benefits for the members, TPP’s rules and regulations could possibly become templates for many future trade agreements.
- Also, with US withdrawal, Asia is becoming a more prominent actor in the new TPP.
- This is emphasized by the role Japan and Australia are playing in the efforts to taking forward the deal.
- It comes despite the presence of Canada and Mexico, who are preoccupied with revisions in the North American Free Trade Agreement (NAFTA).
What lies ahead?
- The existing TPP members should now focus on the basic issues that all members feel are must to revisit, to arrive at an agreeable deal sooner.
- TPP-11, if succeeds would be a precedent for a modern new-generation trade agreement formalized by ‘middle’ powers from Asia and America.
- It would be a deal without the traditional leaders of regional trade deals, the US and the EU.
- Also, it would be a grouping with Asian powers playing a role of prominence which signifies a new regional balance of power.
Source: Financial Express
