Talks on TPP minus USA

In May Japan surprisingly indicated an interest in reviving the Trans-Pacific Partnership. Talks get under way in Japan this week without the US.

Donald Trump withdrew the US from the TPP as soon as he became president.

RNZ:  Japan’s change of heart on TPP good for English

The commitment of Japanese Prime Minister Shinzo Abe to the Trans-Pacific Partnership clearly came as a surprise to both Mr English and his Trade Minister Todd McClay.

In terms of Shinzo Abe’s sudden decision to get back on the TPP-train Mr English credits Mr McClay’s work getting around the region talking up the agreement and trying hard to convince the other remaining 10 nations that it’s worth sticking with.

It may be Mr McClay’s hard work that helped convince the Japanese, but it is also true that Japan is increasingly nervous about its rogue neighbour, North Korea.

The TPP is both a trade deal and a strategic deal and with Japan having it written into its constitution that it can’t use war as a means to settle international disputes, it needs strong allies – hence its obvious preference at having a deal which involves the United States.

Mr Abe wants the TPP text to remain as it is, which means the United States will get the benefits of the agreement even if it isn’t signed up.

But it also means it is easy enough for the United States to rejoin the grouping should it wish to in the future.

Either way the change of heart by the Japanese looked good for Mr English after his first major meeting in Asia as Prime Minister.

Now: TPP reps meet in Japan ahead of APEC

Countries that signed up to the Trans-Pacific Partnership (TPP) have sent representatives to Japan to work on an agreement this week – without the United States.

They’re hoping to have a proposal ready for trade ministers at November’s APEC meeting in Vietnam.

With continuing uncertainty over trade policy under the Trump administration in the US, there’s rising interest in how a regional trade deal might increase security.

New Zealand’s Trade Minister Todd McClay said economic and strategic benefits went hand in hand.

He said countries that traded with each other and were integrated economically were usually good friends.

“If you look over a period of time, it’s not the only reason, but often that’s why regions have been destabilised – when you don’t have that balance around opportunity and growth.”

There was more to trade and trade agreements that just people buying and selling, he said.

If there is a change in government in September I wonder if there will be a change in approach to the TPP.

One of the points of opposition to the TPP was giving concessions to the US.

Japan and NZ aim for TPP progress

Trade Minister Todd MaClay has visited Japan with Prime Minister Bill English, and both countries have announced a willingness to progress the Trans-Pacific Partnership agreement despite the withdrawal of the United States.

Newshub: English’s Japan trip breathes new life into TPP

Prime Minister Bill English has been meeting with his counterpart Shinzo Abe. He says he’s looking forward to working with Japan to move the TPP forward, without the United States.

“Acknowledging the leadership of Prime Minister Abe, I’m taking it forward. Like Japan, New Zealand has ratified the agreement, and we look forward to working together to progress the TPP.”

The 11 countries left negotiating the agreement after the United States pulled out will meet in Hanoi, Vietnam, this weekend.

New Zealand and Japan remain the only countries to have ratified the TPP.

It’s likely the text that was signed last year will be revised, now the US has left, before it’s agreed to by all member countries.

Japan Times: Japan and New Zealand agree to aim for progress on TPP by November

Japan and New Zealand confirmed they will aim to reach an agreement with other signatories to move the Trans-Pacific Partnership forward by November despite the withdrawal of the United States.

“What is important now is whether the (remaining) members can share a view about the future direction of the TPP … and we hope to make efforts to reach an agreement” by November when a summit of the Asia-Pacific Economic Cooperation forum will be held in Vietnam, economic and fiscal policy minister Nobuteru Ishihara told reporters after talks Monday with New Zealand trade minister Todd McClay in Tokyo.

Japan and New Zealand are among the 11 remaining Pacific Rim countries pursuing the TPP free trade pact without U.S. involvement, but some countries, including Vietnam and Malaysia, which hope to boost exports to the United States, are believed to be reluctant to put the agreement into force without the world’s biggest economy.

“It is extremely important that the 11 countries unite and be clear about the future of the TPP” despite the “differences in the ideas and motives of the member countries,” said Ishihara, Japan’s point man on TPP negotiations.

The two ministers met as representatives of the 11 states will try to narrow their differences at a TPP ministerial meeting, set to take place Sunday in Hanoi alongside an APEC trade ministers’ meeting that starts Saturday.

“The TPP meeting in Hanoi will be an important meeting as we look to discuss the direction of the TPP,” Ishihara said, adding that Japan and New Zealand will seek to “lead the discussions.”

New Zealand formally ratified the TPP deal Thursday, becoming the second signatory country to do so after Japan, which completed domestic ratification procedures in December.

So a revamped TPP could still go ahead without the US.

Trump orders TPP withdrawal

Donald Trump has signed an executive order that will pull the US out of the Trans-Pacific Partnership Agreement, as signalled in his campaign.

He has warned business leaders he will impose “very major border tax” if companies move their manufacturing out of the US. Unless he also acts on the huge number of companies who already manufacture outside of the US this will give existing off shore manufacturers a big price advantage.

He has also said he intends slashing company tax rates from 35% to 15% or 20%.

BBC: Trump executive order pulls out of TPP trade deal

President Donald Trump has fulfilled a campaign pledge by signing an executive order to withdraw from the Trans-Pacific Partnership (TPP).

During his presidential campaign, Mr Trump criticised the TPP as a “potential disaster for our country”, arguing it harmed US manufacturing.

“Great thing for the American worker what we just did,” said Mr Trump as he dumped the pact with a stroke of a pen.

This was well signalled.

He also cut funding for international groups that provide abortions, and freezed hiring of some federal workers.

Also on Monday morning, Mr Trump pledged to “massively” cut regulations and taxes on companies, but impose “a very major border tax” if they move factories outside the US.

“All you have to do is stay,” he told executives from 12 companies including Lockheed Martin, Under Armour, Whirlpool, Tesla and Johnson & Johnson.

After meeting the business leaders in the White House, Mr Trump pledged to lower corporate taxes to 15% or 20%, from the current 35%, and slash regulations by up to 75% if they keep jobs in the US.

As promised Trump will radically change business and trade regulations, tariffs and taxes for the US. How this will affect the US and the rest of the world is unknown – there is certain to be negative effects and unintended consequences.

When the world’s largest economy gets a good shake up it’s anyone’s guess what will froth over the top.

Japan, Australia still backing TPP

After an official meeting the leaders of Japan and Australia have said they were committed to proceeding with the Trans-Pacific Partnership agreement.

RNZ: Japan, Australia both back TPP

Japanese Prime Minister Shinzo Abe and Australian Prime Minister Malcolm Turnbull made the announcement after their official meeting as part of Mr Abe’s four-country trip to boost Japan’s trade and security in the Asia-Pacific region.

In his first visit to Australia since Mr Turnbull became Prime Minister, he said both leaders were committed to ensuring the 12-country TPP trade deal would come into effect.

“On the economic front we agreed that we should demonstrate anew the importance of free trade,” he said.

“We confirmed that we would coordinate toward the early entry into force of the TPP and the prompt conclusion of the RCEP [Regional Comprehensive Economic Partnership].”

There is still a major problem though – Donald Trump has said made a priority of taking the US out of the TPP.

The commitment came despite United States President-elect Donald Trump criticising the TPP as a “potential disaster” for the US and vowing to prioritise withdrawing from the pact.

Mr Abe, who had previously said the TPP would be meaningless without the US, said the countries also agreed to maintain “solid cooperation” with the Trump administration.

NZ Herald report that Bill English says a rethink on the TPP may be necessary in Bill English optimistic about Donald Trump US presidency

One of Trump’s first acts will affect New Zealand’s interests – Trump has pledged to initiate the US withdrawal from the Trans Pacific Partnership on his first day in office.

Australian PM Malcolm Turnbull and Japan PM Shinzo Abe met recently to discuss how to salvage the TPP and English said he was not ready to give up altogether either.

“I wouldn’t say it is futile, but I think along with those countries, we need to rethink our approach. It could be as soon as next week that the US executes its position and that means we need to rethink it.”

“I would hope there would be a way of keeping the US engaged in the Asia Pacific and the TPP certainly would have done that. There may have to be some adaptation or some other way of doing that.”

‘Rethink’ may mean trying to do a TPP without the US, unless Trump makes a major reversal on his stance.

Trump confirms US withdrawal from TPP

Donald Trump has announced that in his first day in office as president he will initiate a US withdrawal from the Trans-Pacific Partnership. He has already indicated this would happen.

Stuff: John Key responds to Donald Trump’s decision to quit TPPA: ‘The US isn’t an island’

Calling the 12-nation agreement “a potential disaster for our country,” the president-elect said he would file a notification of intent to withdraw from the deal pushed by President Barack Obama as soon as he takes office on January 20.

Prime Minister John Key has also said the US cannot just sit there and not trade, particularly with the fast-growing markets in Asia.

“The US isn’t an island, it can’t just sit there and say it’s not going to trade with the rest of the world.

“At some point the US would want to think about how it accesses those very fast-growing markets in Asia, and what role it wants to have in Asia.”

So it is now up to the other eleven countries to work out what they want to do with there. A modified agreement will presumably be necessary id things are to proceed without the US.

Or seek a bilateral agreement with the US. Trump said he would pursue ‘free trade’ agreements instead that suited the US better.

New Zealand would want to be near the front of the queue for talks with the United States about any bilateral trade agreement, Trade Minister Todd McClay says.

“Obviously, if the Trump administration wanted to look at new, bilateral FTAs, we would be keen to be near the front of that queue.”

McClay said despite this, the TPPA would still be the country’s first FTA with Peru, Mexico, Canada and Japan.

I expect that the US under Trump’s leadership will have greater priorities than a trade deal with New Zealand.

TPP without the US?

When Donald Trump was elected US president it was presumed the Trans-Pacific was history, but it’s possible the other eleven countries will go ahead without the US.

This would presumably require another agreement because the current agreement was dependant on the US ratifying it.

Stuff: TPP nations eye a future without the US with Trump in the White House

Leaders of the Trans-Pacific Partnership nations are openly considering going it alone, without the United States, in a so-called ‘TPP minus one’ in the wake of Donald Trump’s election.

The 12 countries are meeting on the margins of the 21-strong Apec meeting in Lima, Peru.

Talking to reporters shortly after arriving in the Peruvian capital, Prime Minister John Key made it clear the grouping faced a critical crossroads with Trump’s election.

.”Maybe it is one of the most important Apecs I have been to.”

It could be interesting, but I would be surprised if the US is in a position to make decisions or even give an indication where they stand as Trump transitions into the White House.

There were three scenarios: Go ahead without the US with an 11-member TPP, Trump changes his position and accepts the agreed text, or the countries go back to the table and start talks again.

New Zealand’s goal was a free trade agreement that included the US and Japan through the TPP. 

But a deal without the US, but with Japan would still be worth it from New Zealand’s point of view.

A meeting of TPP leaders is planned for Sunday and New Zealand was reserving judgement on a ‘TPP minus one’, he said.

“It might be, in the end, the way we go forward without the United States – that’s  not an impossible scenario. But we have a few years to make that decision.”

If they want to proceed with a Pacific trade partnership it looks like it will have to be minus the US.

If this is what ends up happening it will be interesting to see how many still oppose it because it’s a trade agreement, and whether some decide to switch to supporting it without the US being involved.

TPPA trumped

Meanwhile, in New Zealand the Trans Pacific Partnership legislation is down to pass into law today …….

Stating the obvious:

BREAKING NEWS – John Key admits TPP will not happen in the short-term with Donald Trump in the White House

John Key is doing well articulating the future NZ relationship with Trump: we don’t have to like it, but we do have to make it work

Key claims TPP is 50:50

Yeah, right.

John Key said yesterday that he thinks there is a 50:50 chance of the Trans-Pacific Partnership getting passed by the US congress in the lame duck period (after next week’s election and before President Obama’s term expires on 20th January 2017).

Audrey Young: John Key says TPP has a 50:50 chance of being passed in Congress lame-duck period

Prime Minister John Key believes the TPP still has a 50-50 chance of being passed in the lame-duck Congressional period after the November 8 presidential election.

He says a lot would depend on the direction given by Congress’ top ranking Republican, Speaker Paul Ryan, and whether Democrat candidate Hillary Clinton won the election.

“I think if Donald Trump wins it’s got no chance But if Hillary Clinton won there is a possibility and a window.”

But there was definitely a view out of Washington from some people that it would go ahead.

“I think it’s a bit 50-50 myself.”

I think that’s a bit optimistic. There is a possibility it will pass through Congress in the next three months. There is also a possibility sanity will prevail in the presidential election. Both seem like extreme long shots.

Trump and Clinton both oppose the Trans Pacific Partnership trade deal among 12 countries and signed in New Zealand in February.

It could pass in the lame duck period. Ryan said in August that the numbers weren’t there although “Inside US Trade” reports that the Obama Administration is close to a solution on the biologics part of the TPP deal that has upset Republicans.

If Clinton wins but there would be an uproar from Sanders supporters and Trump supporters, and probably extreme pressure on both Republican and Democrat representatives.

 

Flogging a dead TPPA?

On his trip to new York John Key has been promoting the Trans-Pacific Partnership Agreement. Is the TPPA a dead horse?

Today’s Herald editorial still thinks the TPPA is worthwhile – Key plays a strong geopolitical card on the TPP

John Key stated it as plainly as he dared in New York yesterday: failure to ratify the Trans-Pacific Partnership agreement would be a “massive lost opportunity” for the United States, he said, “because in the end is that vacuum isn’t filled by the United States, it will be filled by somebody else”.

He could have gone further and suggested the “somebody else” could be China. Talks involving China, India, Japan, South Korea, the Asean members and Australia and New Zealand are under way on a project called the Regional Comprehensive Economic Partnership.

Key had no need to spell out the implications to his New York audience, the Council for Foreign Relations, but his real targets are in Washington. Some of them – but not all – are seeking re-election for Senate and House seats. Some will be defeated at the elections on November 8, but all of them retain their seats until the next Congress is sworn in late in January. That “lame duck” period is a chance for legislators to do what is right, though it may not be popular.

Americans are well accustomed to their representatives doing this and they do not protest vehemently enough for the practice to become politically untenable. It almost seems to have tacit approval. The American public and the incoming Congress appear to accept that contentious things need to be done when the Constitution provides the opportunity.

Both presidential candidates say they want to renegotiate the TPP. Hillary Clinton will know, if Donald Trump does not, how long it took to get the TPP to the point of agreement and how hard it was. It would do the partners no harm to indicate to American voters that a renegotiation cannot be taken for granted.

The TPP has not come from nothing. It grew out of the World Trade Organisation’s stalled Doha round, which itself resulted from collapse of communism and almost universal realisation that competitive markets are the source of prosperity. If the US turns inward and protectionist under its next President, trading countries will look elsewhere for global progress.

Is Key wistfully whistling in the Washington wind?

What he or the Herald say will hardly sway the  USA.

Is the TPPA a lame duck or will the lame duck period givbe it another gasp of breath?

Obama to push TPP

President Obama has said that he will try to push the Trans Pacific Partnership Agreement through Congress, despite both presidential candidates publicly strongly opposing the trade deal.

Newshub: Obama set for ‘full-fledged’ TPP push

US President Barack Obama is launching “a full-fledged, full-throated effort” to push the Trans-Pacific Partnership mega trade deal through Congress in the final lame duck months of his presidency.

The TPP would be the final landmark piece of Mr Obama’s presidency.

“This will be a full-fledged, full-throated effort,” Mr Obama’s deputy US trade representative, Robert Holleyman, told an event this week at Atlanta’s Commerce Club.

The Atlanta event reflected the huge divide between TPP supporters and critics in the US.

David Abney, the chief executive of the world’s largest package delivery company UPS, talked up what he believed would be the TPP’s ability to cut red tape for US small and mid-sized businesses entering new Asia-Pacific markets.

As Mr Abney spoke, UPS drivers and union representatives supporting them protested outside the Commerce Club.

“We’re opposed to the TPP because we feel like it’s going to undermine American workers’ standard of living,” Teamsters Local 728 political director Eric Robertson told theAtlanta Journal-Constitution.

Mr Obama has put Congress on notice he will be sending a TPP bill their way.

The White House has also organised 30 pro-TPP events to support Democrat and Republican members of Congress who favour the legislation.

It will be difficult for Obama. He hasn’t much time left in his second term, and has to get the TPP through in the ‘lame duck’ period after the election and before he leaves the White House in January.