The Trans-Pacific Partnership (TPP) multinational trade agreement has been saved from being left in limbo, at least for now, despite the heavy blow it has received from the U.S. decision to withdraw from the pact.
In their recent meeting, ministers from the 11 remaining participating countries issued a joint statement saying they will start considering options for an early implementation of the TPP. They will finish their work by November, according to the statement.
There is no doubt that the departure from the agreement by the United States, which accounts for 60 percent of the combined gross domestic product of the 12 countries that signed the deal, has seriously undermined the TPP’s significance and economic benefits.
But we nevertheless welcome the agreement among the 11 remaining Pacific Rim nations to make efforts to put the accord into force.
As multilateral trade negotiations under the World Trade Organization have become bogged down, bilateral and regional free trade agreements (FTAs) have emerged as the principal driving force of free trade.
In particular, there are growing expectations for so-called “mega FTAs,” mammoth trade deals such as the TPP.
The TPP has been leading the trend as a pioneering effort to establish new trade rules for the 21st century.
There are, however, some significant differences in stance among the remaining members.
Under the agreement, Vietnam and Malaysia promised to carry through painful reforms, such as overhauls of state-owned companies, to secure their freer access to the huge U.S. market.
They argue that the agreement should be renegotiated and revised if the United States doesn’t take part.
For Canada and Mexico, the expected renegotiations with the United States over the trilateral North American Free Trade Agreement (NAFTA) represent a more urgent trade policy challenge.
These two countries are trying to assess the effects on the new NAFTA talks of their involvement in the efforts to bring the TPP into force without the United States.
Peru and Chile are showing interest in having China join the TPP.
There is no clear path to achieve the goal by overcoming these differences in priorities among the participating nations.
The main challenge is how to keep the momentum for the TPP talks alive.
The 11 countries have agreed on Japan’s proposal to hold a meeting of their top trade negotiators in July.
This offers an opportunity for Japan, the largest economy among the nations, to exercise leadership in this important undertaking.
Japan should also hold candid discussions with the U.S. administration of President Donald Trump over the benefits of the TPP.
The Trump administration has made clear its intention to focus on bilateral trade issues in the Japan-U.S. economic dialogue.
Tokyo should make tenacious efforts to convince the Trump administration of the importance of building multinational trade frameworks in Asia through talks led by the United States and Japan.
Japan can do a lot to keep the 11 countries committed to the TPP by leading the efforts to explore the possibilities of bringing Washington back into the TPP camp.
Another multilateral trade deal being negotiated in the Asia-Pacific region is the Regional Comprehensive Economic Partnership (RCEP).
In the RCEP talks, Japan is aiming for high levels of trade liberalization, while China is likely to step up its diplomatic maneuverings to establish relatively loose trade rules to win over emerging and developing countries.
If it wants to achieve high levels of free trade in this region, Japan needs to keep acting as the leading champion of the TPP.