TPP11 Possible To Boost Trade Amid Slower RCEP Negotiations

by Massita Ahmad SINGAPORE, Feb 8 (Bernama) -- With the Trans-Pacific Partnership Agreement (TPPA) having been aborted by the United States (US), what option now do the remaining 11 countries that negotiated it, have? Will they proceed without the US, the country that initiated the pact? The 11 TPP members in question are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Each of these participating countries went through five years of tough negotiations. It would not be easy to let go of the consensus forged, as it promised a better tomorrow in terms of trade and their respective economies. Singapore for instance, whose economy relies heavily on external demand, has three courses of action to boost trade and one is to get on board a TPP11 without the US. "I think it all depends on the perspectives of the individual countries," its Minister for Trade and Industry (Trade), Lim Hng Kiang was reported as saying recently in Parliament. "For some of the TPP countries, for example Singapore and Australia, we already have bilateral Free Trade Agreements (FTAs) with the US. The TPP gives us an incremental market access. "Our main bilateral trade in goods and services and investments are covered by the FTAs. So, every country has to re-assess the situation," he said. Another option is for the remaining 11 to negotiate bilateral deals, including with the US, as the latter now wishes to embark on more such agreements rather than multilateral ones. The next option is for the TPP11 to continue with the ratification process and hope the US administration will change its mind and rejoin the deal, Lim was also quoted as saying. President Donald Trump signed a decree to withdraw the US from the TPP trade deal late last month and on his first official working day in the White House. Trump said the TPP would affect manufacturing and production in the US, and deprive US citizens of jobs. The TTPA had been in discussion since 2009, and during the presidency of Barack Obama. Negotiations concluded in October 2015. If the TPP agreement, with the US in it, had come into force, it would have been the largest regional trade agreement in history, covering 40 per cent of the global economy. According to Lim, the Regional Comprehensive Economic Partnership (RCEP) has registered "slower progress" than expected. The RCEP has become the focus following the effective demise of the TPP. The RCEP initiative aims to be an ASEAN-led process through which the regional grouping would broaden and deepen economic engagements with its FTA partners. RCEP negotiations, involving ASEAN together with Australia, China, India, Japan, South Korea and New Zealand, started in November 2012. The RCEP was supposed to have been concluded in "about three to four years", but negotiations between major economies such as China and India are taking longer than expected, Lim was quoted as saying. "It is going to take us a bit longer. The reason is because we are trying to put together the free trade agreements (FTAs) that ASEAN has with the various dialogue partners. "So the problem or challenge, is not within ASEAN, as we already have FTAs with our corresponding dialogue partners. "The challenge is the dialogue partners not having FTAs among themselves. For example, between China and India, there is no FTA. So, they are coming together for the first time and one can imagine what it is like, with two huge economies starting from scratch. It is a huge challenge," he said. Meanwhile, in December last year, Malaysia's International Trade and Industry Minister Mustapa Mohamed said the RCEP negotiations were expected to be concluded by end-2017. He noted that member countries would try to bridge the gap in several areas including movement of goods during the rounds of meetings scheduled this year. The TPPA involving 12 countries entailed five years of negotiations. As the RCEP has 16 countries, it is therefore more challenging, he explained. Mustapa said to-date, only two chapters out of the total 20 had been concluded, including one related to small and medium enterprises. "The leaders set a target for us to conclude the negotiations and that put pressure on us to work harder. However, we missed the targetas it was ambitious," he added. -- BERNAMA