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January 25, 2017

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Australia to recast TPP pact, opening a door for China

AUSTRALIA is working to recast the Trans-Pacific Partnership without the United States and opened the door for China to sign up after US President Donald Trump ditched the huge trade pact.

The deal included a dozen Asia-Pacific nations which together account for 40 percent of the global economy, but Trump said on Monday that he had “terminated” it in line with election pledges to scrap the “job-killer” pact.

Australia is floating a “TPP 12 minus one,” with Prime Minister Malcolm Turnbull saying his government was in “active discussions” with other signatories, including Japan, New Zealand and Singapore, on how to salvage the agreement.

“It is possible that US policy could change over time on this, as it has done on other trade deals,” Turnbull told reporters in Canberra, adding that the nominee for US secretary of state Rex Tillerson and Republicans supported the TPP.

“There is also the opportunity for the TPP to proceed without the United States,” he added. “Certainly there is the potential for China to join the TPP.”

The agreement, the biggest trade deal in history, was seen as a counter to China’s rising economic influence. It was signed last year but has not yet gone into effect.

Trade Minister Steven Ciobo said Australia, Canada, Mexico and others had canvassed for a pact without the US at a World Trade Organization ministerial meeting in Davos.

“There would be scope for China if we were able to reformulate it to be a TPP 12 minus one, for countries like Indonesia or China or indeed other countries to consider joining,” Ciobo told the Australian Broadcasting Corporation.

“This is very much a live option and we are pursuing it and it will be the focus of conversations for some time to come.”

New Zealand Prime Minister Bill English noted that China “hasn’t been slow to spot the opportunity” to cast itself as a free trade supporter.

There was a willingness toward “making an effort to find out what we can do with TPP, rather than just dropping it and waiting and hoping to get a call (from Washington) about bilateral agreements sometime,” he told reporters in Wellington.

Trump said he would pursue bilateral deals with TPP signatories to secure terms more favorable to the US. But English said a US-New Zealand pact would be challenging given Trump’s insistence that Washington would dictate terms.

China has long been noncommittal on the idea of joining the TPP, choosing to back an alternative trade pact, the Regional Comprehensive Economic Partnership (RCEP). It includes the 10 members of the Southeast Asian grouping ASEAN plus China, India, Japan, South Korea, Australia and New Zealand, but notably excludes the US.

At a regular press briefing yesterday, Chinese foreign ministry spokeswoman Hua Chunying remained coy about China joining the TPP, simply noting that China supports “open, transparent, and win-win” trade pacts.

RCEP talks were pressing ahead, she said, stating they “should be concluded at an early date.”


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