Without Washington, 11 countries unite and sign a new TPP

AFP
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AFP

Tuesday, 6 march, 2018 03:40

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Tuesday, 6 march, 2018 03:40

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Given up for dead a year ago after the withdrawal of the United States, the free trade agreement trans-pacific (CC) is reborn from its ashes this week and will be signed on Thursday by 11 countries in America and Asia, a strong signal in the face of protectionist pressures.

The treaty had been promoted by Washington, under the presidency of Barack Obama, and signed in February 2016 after years of negotiations between the 12 countries having an access on the Pacific: the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

But before its entry into force, the us president, Donald Trump has announced the withdrawal of his country, putting at risk the ambitious agreement is expected to encompass 40 % of global GDP and almost 25 % of international trade.

Responsible to lead the delegation to the negotiations, Felipe Lopeandia remembers that at the time of this announcement-shock, “there was immediately a very strong commitment by all on the need to give a political signal to the world and in the United States that there was a good agreement (…) and, therefore, that we were not going to remain stationary after the decision of Trump”.

A year later, in Santiago, Chile, the agreement, now called the trans-pacific Partnership global and progressive (CPTPP for its acronym in English), will be signed on Thursday, with almost all of the provisions of the original text, except those relating to intellectual property imposed by Washington.

Against the foot of protectionism

This signing comes against the foot of the perfume protectionist ambient, at a time when Trump has announced customs duty for steel and aluminium, the risk of triggering a trade war.

“It restores some confidence in the ability of regionalism, or of different countries to move forward in very important contracts”, explains Mr. Lopeandia.

Difficult, however, neglect the blow was the departure of the United States: the new text does more than on 15% to 18% of global GDP. But “this is not any agreement. It is the agreement is the most modern ever signed at a global level,” says Ignacio Bartesaghi, professor of the faculty of business sciences of the catholic University of Uruguay.

“There is no commercial agreement involving such a large amount of countries and managed to have 30 chapters that deal with issues of the contemporary international trade”, he adds.

Designed by Washington as a means to curb the growing influence of China in the global trade, the TPP would then become the “bête noire” of Trump, who had worried about the danger to “american workers”.

Yet by the end of January, he cracked open the door to a return to his country, noting that this would require us to first obtain a “better agreement” that the new covenant, “horrible” in his eyes.

“Little by little, his advisors arrived at what Trump is aware of the role played by the United States in the Asia-Pacific region and the role played by the TPP in this region, not only in economic and commercial terms, but also geopolitical,” says Mr Bartesaghi.

“A new standard”

But Japan has shown skeptical.

“If the United States return to a more positive attitude towards the TPP, it is something that we would welcome,” but “this would not be so easy” to further amend the agreement, said Kazuyoshi Umemoto, in charge of the negotiations for the japanese government.

The agreement provides for a lifting of customs barriers and non-tariff barriers, such as the establishment of common standards in many sectors of activities, among these 11 countries, bringing together nearly 500 million people.

For the department of the chilean foreign Affairs, “the CPTPP will set a new standard for other regional economic integration agreements, including for future negotiations within the WTO (world trade Organization, editor’s note) or the Apec (Forum Asia-Pacific, editor’s note)”.

Once signed, the agreement will enter into force 60 days after ratification by at least six of the 11 countries.

In the case of Chile, “this means an increase in our potential market and the possibility for our population, access to a large number of products,” says Mario Mongilardi, president of the Chamber of commerce of Lima.

The south american country, intended for 17 % of its exports to economies in the CPTPP. Even if it already has free trade agreements with some of the 11 countries, this new agreement will improve its access conditions to these markets, with, for example, a thousand of products excluded from its alliance with Japan now less taxed.