The remaining members of the Trans-Pacific Partnership (TTP) are trying to reach an agreement on a new deal that would enable them to move forward without the participation of the USA at the Asia-Pacific Economic Cooperation (APEC) meeting of foreign and trade ministers in Vietnam.
The APEC summit is being carried out in Vietnam, where the participating representatives of all APEC countries talk about enhancing their cooperation and promote free trade in a time of rising protectionism.
The emerging Asian economies are most affected by the new protectionism strategy that is arising in many countries in recent years. The reasons can be found in the strategy of countries like Vietnam have opted for an economic model based on export-driven growth and trade-oriented industrialization, according to DW.
Nations with such an economic strategy are particularly dependent on the free movement of goods. The current free trade crisis is putting pressure on emerging, export-orientated states, as they urgently need to look for alternatives and take countermeasures.
Against the backdrop of increasing headwinds to global trade, the APEC gathering at least offers an opportunity for Asian countries to formulate a common position.
The Asia-Pacific Economic Cooperation is a forum for 21 Pacific Rim member economies that promote free trade throughout the Asia-Pacific region.
About the TPP
The Trans-Pacific Partnership is one of the world's biggest multinational trade deals and had been signed originally by 12 Pacific Rim nations. Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Those economies account for 40 percent of the global economic output and 26 percent of world trade.
The far-reaching deal, which notably excludes the People’s Republic of China, aims to dismantle tariff and non-tariff barriers to trade and investment between the participant countries. It also foresees streamlining regulations, and the implementation of common standards for the protection of foreign investment and intellectual property, among other things.
The reason for China missing in the agreement is explained by the country is not prepared to meet the high standards of free trade and investment encouraged in the TPP. It may be ready to join in the coming years ahead, though.
TPP without the USA
In January, in one of his first moves after taking over as US president, Donald Trump signed a decree pulling his country out of the Trans-Pacific Partnership, an ambitious trade deal of his predecessor Barack Obama's Asia-Pacific strategy.
Still, leaders of some of the 11 other countries party to the agreement have reiterated their support to the TPP and are looking for ways to salvage the pact.
The Australian government also suggested that China could replace the US in the TPP bloc, with Trade Minister Steven Ciobo quoted by the Australian Broadcasting Corporation as saying: "There would be scope for China if we were able to reformulate it to be a TPP 12 minus one, for countries like Indonesia or China or indeed other countries to consider joining. Beijing "hasn't been slow to spot the opportunity" to cast itself as a free trade supporter.
China proposing a new trade deal agreement
In the meanwhile, the government in China is already playing a leading role negotiating another economic-based agreement, the Regional Comprehensive Economic Partnership (RCEP) agreement. It is seen as a free trade deal that is widely regarded as a rival to the TPP.
The RCEP brings together the 10 members of the Southeast Asian grouping ASEAN plus China, India, Japan, South Korea, Australia and New Zealand, but notably excludes the USA.
There are considerable differences between the TPP and the RCEP deals. The TPP is a far-reaching pact, aimed at dismantling tariff and non-tariff barriers to trade and investment among the participant countries. It also foresees streamlining regulations, and the implementation of common standards for the protection of foreign investment and intellectual property, among other things.
The RCEP, on the other hand, is a much more narrowly conceived trade agreement, whose key aim is to lower tariffs among the participating nations.
For large parts of Asia, China is already a bigger export market than the USA, and its growth prospects are much better. By including Korea as well as the rest of ASEAN, more Asian countries are included in the RCEP talks than the TPP.
China, however, is not the sole beneficiary of the US' exit from the TPP. Countries like the Philippines, South Korea and Thailand, which are not part of the TPP, are also considered to profit from the development. "These countries would have seen their growth prospects suffer if the TPP triggered the formation of regional supply chains which excluded them.
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