Editorial: Don't give up on the TPP
Even without the US, the trade pact has a lot to offer
New U.S. President Donald Trump has signed a presidential directive to "permanently withdraw" the U.S. from the Trans-Pacific Partnership. With Washington out of the picture, the dream of building the world's largest free trade zone in the Asia-Pacific region has all but ended.
The 12-member accord was seen as becoming the new gold standard for global trade and investment. It is extremely regrettable that this historic initiative is, for all intents and purposes, on permanent hold.
A TPP without the world's biggest economy would do little to spur growth in the region. It is therefore crucial that the remaining 11 signatories take every opportunity to convince the Trump administration of just how significant the deal is.
Alongside these efforts, the remaining TPP members also have to think of how to best adapt to the drastic switch in U.S. trade policy. Above all, they must maintain solidarity.
Some TPP signatories, including Australia and New Zealand, have already mooted the possibility of forging an economic partnership among the 11 economies.
Beyond just reducing tariffs, the TPP also sets new rules on electronic commerce and for protecting intellectual property rights, among others. If the benefits of these rules are ever to be enjoyed, then an 11-member economic partnership is worth considering.
Hopes were high that the TPP would mark a huge step forward in liberalizing global trade and investment. The heads of state and cabinet officials in the TPP club should get cracking on working out a new partnership, even though renegotiating the accord and going through the domestic ratification process again would be an enormous undertaking.
Rules set out in the TPP, such as those relating to labor standards and environmental protection, may well be referred to as good examples when the U.S. renegotiates the North American Free Trade Agreement with Canada and Mexico.
AIM HIGH In Asia, negotiations are underway over a Regional Comprehensive Economic Partnership, an expansive free trade agreement encompassing 16 countries -- the 10 member states of the Association of Southeast Asian Nations, plus Japan, China, South Korea, India, Australia and New Zealand. It would be a shame if the RCEP sets the bar low on trade liberalization, a real possibility given the TPP's uncertain fate. RCEP member countries should do everything they can to agree on ambitious targets.
The TPP and RCEP had been seen as paving the way for attaining the goal of regionwide economic integration in the form of a Free Trade Area of the Asia-Pacific. Governments across the Asia-Pacific region need to keep working together to ensure the region remains a growth center for the world economy.
It is worrisome that the Trump administration, since declaring the U.S.'s withdrawal from the TPP, has indicated a shift in trade policy toward favoring bilateral talks over multilateral negotiations.
The spread of globalization has seen industries build supply chains that span many countries and economies. That Team Trump is adopting a bilateral focus shows just how incapable it is of facing the reality of the world economy and underscores its narrow-mindedness.
It is very possible that the U.S. will call on individual TPP countries seeking an FTA. These governments should jointly work out a plan for how to respond should Washington come calling.