The Rendon Group
Each week The Rendon Group’s media analysts will focus on a different continent and a different issue affecting that continent. As always, we remain available to answer any questions you may have and to provide additional information upon request. For more information regarding The Rendon Group’s products and services, please contact us at Alert@Rendon.com or +1-202-745-4900.
The Trans-Pacific Partnership Trade Deal Agreement
Leaders of TPP Member Nations (Ledger Gazette)
This week’s snapshot focuses on the recent Trans-Pacific Partnership accord reached on 05OCT between Brunei, Chile, New Zealand, Singapore, Australia, Canada, Japan, Malaysia, Mexico, Peru, the United States, and Vietnam; which together comprise 40% of the world’s economy. The pact is aimed at deepening economic ties between these nations, slashing tariffs, and fostering trade to boost growth. Member countries are also hoping to foster a closer relationship on economic policies and regulation. The trade deal is considered the largest trade agreement in history.
News summary of events during the week of 05OCT15 – 11OCT15
- 04OCT: Japan’s Economy Minister Akira Amari said officials could announce a deal “in principle” Sunday after days of talks. (AFP)
- 05OCT: The United States, Japan and 10 other Pacific Rim nations reached final a agreement on the largest regional trade accord in history, setting the stage for confrontation between US President Obama and Congress over final approval of the deal. (NYT)
- 05OCT: Canada said that the TPP would only allow limited access to protected Canadian domestic dairy and poultry markets, a politically sensitive issue ahead of the 19OCT election. (Reuters)
- 06OCT: Australian PM Malcolm Turnbull hailed the TPP as a huge opportunity for businesses, farmers, and manufacturers to cash in on the burgeoning Asia-Pacific region. (AFP)
- 06OCT: Japanese PM Shinzo Abe hailed the TPP as the start of a “new century” for Asia, and expressed hope China might one day join the historic accord. (AFP)
- 06OCT: Canadian PM Stephen Harper said his government would invest 1 billion Canadian dollars (about USD764 million) in the country’s auto industry over a decade, moving to address worries about the impact the deal could have on the sector. (WSJ)
- 07OCT: South Korean Foreign Minister Yun Byung-se faced fierce criticism from lawmakers over the government’s approach to the TPP. (Yonhap)
- 07OCT: The US government came out in defense of the TPP, saying it will do away with up to 18,000 tariffs currently imposed on products from the US, while strengthening the ‘Made in America’ brand. (EFE)
- 08OCT: IMF chief Lagarde said the TPP is “bound to be beneficial” for global economic growth. (DPA)
- 08OCT: First deputy managing director of the International Monetary Fund David Lipton cited the TPP as an economic opportunity for Latin American countries. (EFE)
- 09OCT: Japanese PM Shinzo Abe vowed to implement measures to beef up the country’s agricultural sector in the wake of the landmark free trade accord. (Kyodo)
- 09OCT: Facing Vietnam as its biggest trade competitor, Indonesia is eyeing joining the TPP trade deal within two or three years, although the process may take longer than expected, media reports and government officials said. (Kyodo)
- 10OCT: US President Obama took a dig at China as he defended the new TPP Pacific Rim free-trade deal, saying, “Without this agreement, competitors that don’t share our values, like China, will write the rules of the global economy.” (AFP)
- 10OCT: US Trade Representative Michael Froman said the US administration hopes to release the full text of the TTP trade deal within the next 30 days. (Reuters)
Sample of Twitter handles tweeting about the Trans-Pacific Partnership Trade Deal Agreement
- @W7VOA, Steve Herman, Voice of America SE Asia Bureau chief
- @sdonnan, Shawn Donnan, World Trade Editor for FT.com
- @mschewel, Matthew Schewel, Inside U.S. Trade Reporter
- @edwardalden, Edward Alden, senior fellow at the Council on Foreign Relations
- @MelindaGTW, Melinda St. Louis, Director of International Campaigns, Public Citizen’s Global Trade Watch
Sample of Third Party Validators regarding the Trans-Pacific Partnership Trade Deal Agreement
Matthew P. Goodman, William E. Simon Chair in Political Economy and senior adviser for Asian economics at the Center for Strategic and International Studies and Scott Miller, senior adviser and William M. Scholl Chair in International Business at CSIS
“A high-standard, comprehensive market-opening agreement involving 40 percent of the world economy would promote economic growth and represent the first major liberalizing measure in nearly a decade. TPP would not just be good for the parties; its scope and ambition should serve as a “wake-up” call for leaders and a guideline for accelerating economic growth.”
- The Trans-Pacific Partnership Negotiations Conclude, CSIS, 05OCT15
Guy de Jonquières, senior fellow at the European Centre for International Political Economy
“…as a trade-liberalizing arrangement, the TPP doesn’t otherwise look so impressive. Six of its members already have FTAs with the United States, so for them any improvements in market access are likely to be fairly limited. Vietnam stands to gain quite a bit, though its benefits will be limited by constraints imposed at the demand of the U.S. textiles lobby. And liberalization is likely to be phased in gradually. In the end, trade may be a bit freer within the TPP, but it will be far from completely free.”
- What Will the TPP Mean for China?, FP, 07OCT15
Peter Drysdale, emeritus professor of economics at the Australian National University in Canberra
“Even with growth two or three percentage points lower than its current rate, there’s not a major business anywhere in the region, including in Japan, that doesn’t have to factor China in,” Mr. Drysdale said. “With China out of TPP for the foreseeable future, the incentive for China and its East Asian partners to ramp up their economic ties will be more powerful.”
- U.S. Allies See Trans-Pacific Partnership as a Check on China, NYT, 06OCT15
Shi Yinhong, director of the Center on American Studies at Renmin University
“The key is whether China’s domestic reforms will be enough or sufficient. If they are not, it will have to follow the U.S. and lose its chance with the TPP to help make the rules.”
- Trans-Pacific Trade Deal a Setback for China, WSJ, 05OCT15
Arthur R. Kroeber, managing director of GaveKal Dragonomics and editor of China Economic Quarterly
“The TPP illustrates a dilemma for U.S. policy in the Asia-Pacific. On one side, Washington seeks to counterbalance China’s rising power by strengthening its military relationships with its regional allies, tilting in favor of southeast Asian countries in their maritime disputes with China, discouraging its friends from participating in Chinese initiatives such as the AIIB, and pursuing a massive trade agreement that leaves out the region’s and the world’s biggest trading nation. On the other side, American leaders reiterate that they have no desire to contain China (rightly seeing such a strategy would fail), and argue that deeper engagement, rather than confrontation, is the right way forward in U.S.-China relations.”
- What Will the TPP Mean for China?, Foreign Policy, 07OCT15
Sample of open source research conducted by TRG analysts related to the Trans-Pacific Partnership Trade Deal Agreement
1. Trans-Pacific Partnership Trade Deal Is Reached
Media: New York Times
Byline: Jackie Calmes
Date: 05 October 2015
ATLANTA — The United States and 11 other Pacific Rim nations on Monday agreed to the largest regional trade accord in history, a potentially precedent-setting model for global commerce and worker standards that would tie together 40 percent of the world’s economy, from Canada and Chile to Japan and Australia.
The Trans-Pacific Partnership still faces months of debate in Congress and will inject a new flash point into both parties’ presidential contests.
But the accord — a product of nearly eight years of negotiations, including five days of round-the-clock sessions here — is a potentially legacy-making achievement for President Obama, and the capstone for his foreign policy “pivot” toward closer relations with fast-growing eastern Asia, after years of American preoccupation with the Middle East and North Africa.
2. U.S. says TPP will eliminate 18,000 tariffs on exports
Media: EFE (Spain)
Date: 08 October 2015
The U.S. government came out Wednesday in defense of the Trans-Pacific Partnership Agreement, or TPP, saying it will do away with up to 18,000 taxes, which other countries currently impose on products from the U.S., besides strengthening the ‘Made in America’ brand.
The TPP was signed Monday in the U.S. city of Atlanta, by U.S., Mexico, Peru, Chile, Canada, Japan, Malaysia, Singapore, Vietnam, Brunei, Australia and New Zealand.
US trade representative Michael Froman, who led the country’s delegation in the TPP negotiations, said workers, farmers and businesses will benefit from the elimination of 18,000 taxes that are currently imposed on US exports by other countries.
3. ANALYSIS: Weighing anchor
Media: The Economist
Date: 10 October 2015
DONALD TRUMP, an American presidential candidate, denounced it as “a terrible deal”. Another, Hillary Clinton, does not think it meets “the high bar” that should be applied to trade pacts. Yet proponents of the Trans-Pacific Partnership (TPP), which encompasses 12 countries in Asia and the Americas, including America and Japan, herald it as the biggest multilateral trade deal in 20 years, which will “define the rules of the road” for international commerce. Which is it?
TPP will apply to 40% of the world’s economy. For American exporters alone, 18,000 individual tariffs will be reduced to zero. Much the same will be true for firms in the other 11 members. Even agricultural barriers, usually among the most heavily defended, will start to come down. Foreigners will gain a toehold in Canada’s dairy sector and a bigger share of Japan’s beef market, for example. Some of these reductions will be phased in lamentably slowly, however: American tariffs on Japanese lorries will last another 30 years.
4. Wikileaks release of TPP deal text stokes ‘freedom of expression’ fears
Media: The Guardian (UK)
Byline: Sam Thielman
Date: 09 October 2015
Wikileaks has released what it claims is the full intellectual property chapter of the Trans-Pacific Partnership (TPP), the controversial agreement between 12 countries that was signed off on Monday.
TPP was negotiated in secret and details have yet to be published. But critics including Democrat presidential hopefuls Hillary Clinton and Bernie Sanders, unions and privacy activists have lined up to attack what they have seen of it. Wikileaks’ latest disclosures are unlikely to reassure them.
One chapter appears to give the signatory countries (referred to as “parties”) greater power to stop embarrassing information going public. The treaty would give signatories the ability to curtail legal proceedings if the theft of information is “detrimental to a party’s economic interests, international relations, or national defense or national security” – in other words, presumably, if a trial would cause the information to spread.
5. INTERVIEW: Enrique Pena Nieto Interview: TPP will make all participants winners, says Mexican president
Media: Nikkei English News (Japan)
Byline: Hidetake Miyamoto
Date: 09 October 2015
MEXICO CITY — Mexican President Enrique Pena Nieto is highly hopeful that the newly agreed on trans-Pacific trade pact will help diversify his country’s trade and benefit all member nations. He also told The Nikkei that Mexico is eager to expand exports to Asia.
Edited excerpts of the interview follow.
Q: Twelve Pacific Rim nations have struck a deal on the Trans-Pacific Partnership (TPP). How will the TPP change the world economy? What kind of economic benefits is the TPP likely to bring to Mexico?
A: It took a very long time to negotiate the TPP. It has been a long-awaited deal. The TPP will create great opportunities for all signatory nations that will be integrated. The participating countries account for 40% of the world’s total gross domestic product. The pact will allow Mexico to diversify its trade and economic relations, opening up a new horizon and giving much impetus to economic integration. It is a very important trade accord and produces a lot of benefits that will help promote the economic development of the region. All participating countries will be winners and benefit from the agreement. It will greatly stimulate trade and investment. It will also improve productivity and competitiveness.