12 nations sign US-led TPP but ratification may not be easy in US
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THE biggest trade deal in history was signed yesterday, bringing together 12 Pacific Rim countries in a US-led initiative.
The ambitious Trans Pacific Partnership aims to slash tariffs and trade barriers for an enormous 40 percent of the global economy — but does not include China.
The deal — whose birth was fraught by domestic opposition in the US and in other key players, such as Japan — is a key plank of President Barack Obama’s so-called “pivot” to Asia.
Trade ministers from the 12 countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam — signed the pact in Auckland yesterday.
China would “actively participate in and facilitate highly transparent, open and inclusive free trade arrangements in the region,” a commerce ministry statement said.
Although the signing marks the end of the negotiating process, member states still have two years to get the deal approved at home before it becomes legally binding.
“We will encourage all countries to complete their domestic ratification processes as quickly as possible,” New Zealand Prime Minister John Key said.
“TPP will provide much better access for goods and services to more than 800 million people across the TPP countries, which make up 36 percent of global GDP.”
But ratification may prove far from easy, notably in the US, where poisonous election-year politics are likely to stymie co-operation over a deal opponents have spun as a job killer.
“It’s highly unlikely (ratification) before the national elections in November,” Tom Switzer of the University of Sydney’s US Studies Centre said.
“In an election year, free trade is not a popular cause, and there are a lot of constituencies in both the Democratic Party and the Republican Party who are very much opposed to free trade or any kind of trade deal.”
In Japan — the second biggest economy in the bloc, and one that was a relative latecomer to the process — mainstream politicians and economists have generally supported the TPP as positive for Tokyo’s export-driven growth even amid concerns over its impact on its prized agriculture industry.
The Canadian government, which has changed since the deal was negotiated, signed up yesterday but has yet to decide whether to go through with ratification.
While the 12 trade ministers were shaking hands in Auckland, thousands of protesters clogged the streets outside to voice their opposition.
They argue the TPP will cost jobs and impact on sovereignty in Asia-Pacific states.
American economist and Nobel Prize winner Joseph Stiglitz believes the TPP “may turn out to be the worst trade agreement in decades.
“In 2016, we should hope for the TPP’s defeat and the beginning of a new era of trade agreements that don’t reward the powerful and punish the weak,” he recently wrote in The Guardian newspaper.
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