TPP AND ITS IMPLICATIONS

By

Wang Jingxuan, Seike Taiga, Sejung Kim, Dogan Berk, Park Junmin,

Yuri Suga

Introduction

Wang Jingxuan

WHAT IS TPP?

• Trans-Pacific Partnership

• economic agreement between 11 Pacific Rim countries

• Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New

Zealand, Peru, Singapore, Vietnam, and United States (withdrew)

• 40% of global GDP one-third of world trade

WHAT IS THE AIM?

• eliminate trade barriers

■ cuts over 18,000 tariff

■ No tariffs on all U.S. manufactured goods and almost all U.S. farm products

• Labor provisions

■ Child labor

■ minimum wage

■ Worker’s right

• Environment protection

• Investor-state arbitration

■ investor-state dispute settlement (ISDS): grants investors the right to sue foreign governments for treaty violations

FEATURES

• Comprehensive market access: reduces tariff and non-tariff barriers

across substantially all trade in goods and services

• Regional approach to commitments: facilitates the development of

production and supply chains, and seamless trade, enhancing

conservation efforts, facilitating cross-border integration, as well as

opening domestic markets.

FEATURES

• Addressing new trade challenges: promotes innovation, productivity,

and competitiveness by addressing new issues, including the

development of the digital economy, and the role of state-owned

enterprises in the global economy

• Inclusive trade: includes new elements that seek to ensure that

economies at all levels of development and businesses of all sizes can

benefit from trade. Like commitments to help small- and medium-

sized businesses understand the Agreement, take advantage of its

opportunities, and bring their unique challenges to the attention of the

TPP governments.

FEATURES

• Platform for regional integration: a platform for regional economic

integration and designed to include additional economies across the

Asia-Pacific region.

The Differences

between TPP

and TTIPTPP and its implications

Taiga Seike

Taiga Seike

1M170423-1

What is TTIP?

○ Transatlantic Trade and Investment Partnership → TPP Northern Atlantic ver.

○ A deal being negotiated between US and EU

○ To increase trade and prosperity for both side

What are the differences?

○ TPP was agreed after nearly a decade of international discussion

○ TTIP, its first official round of talks took place in 2013

○ TPP is a EPA but TTIP is a FTA

○ TTIP is not going into effect yet

US AND TPPSEJUNG KIM

US and TPP

WHEN?

Started during Obama period

WHY?

-America’s position in the Asia-Pacific region

-compromise agreement for the US in order to limit the growing influence of China, by excluding the membership of

China and including japan

CRITICS?

-secretive deal that favored big business and other countries at the expense of American jobs and national sovereignty

Trump’s reign

-describe as “horrible deal”

- said it has cost US jobs and said

the TPP would pave the way for

companies to sue government that

change policy on, say, health and

education to favor state-provided

services

- Trump made abandoning the TPP

on his first day in office

CPTTP

New TTP: Australia, Brunei Darussalam, Canada, Chile,

Japan, Malaysia, Mexico, New Zealand, Peru, Singapore,

and Viet Nam

US joining again?

U.S. President Donald Trump said the United States would only join the Trans

Pacific Partnership, if it offered “substantially better” terms than those provided

under previous negotiations.

Criticisms over US-CHINA tariff standoff

TPP from the Perspective of ChinaDOGAN Berk

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How does China view the TPP?

● TPP was designed largely to counterbalance

China's power and China’s trade advantages in

WTO

• Also, to up the ante for an Asian country in

choosing sides if there ever is a bilateral

conflict between the US and China

TPP: A Trade Agreement to Contain China？

The TPP affects China in 3 major ways:

● The TPP creates the possibility that the future rules for the global economy will be written under the predominant US influence, in the same way that the current rules have been.

● Makes Chinese exports relatively more expensive compared to the exports from countries like Japan, South Korea, Taiwan, and most of ASEAN.

● Makes it more attractive for American multi-nationals to focus their investment on countries other than China because these countries would not enjoy the same kind of legal protections promised by the TPP.

Implications Before the US Exit

● Before the US exit, China was under the pressure to protect the existing trade rules while trying to come up with new alternative that can be attractive to its neighboring countries.

Shanghai Free-trade Zone (上海自由贸易区）

Upgrades over China-ASEAN Trade Zone (中国-东盟自由贸易

区）

RCEP (区域全面经济伙伴关系协定)

Implications After the US Exit

● By exiting from the TPP, the US gave the signal of disengagement in Pacific and started to look unreliable.

● As China is initiating for a 16-nation pact called the Regional Comprehensive Economic Partnership(RCEP), the US exit created the opening for China to hold advantageous position for the negotiations on rewriting the economic rules.

Thus, the US exit from the TPP provides the opportunity that China needs in terms of setting up the new trade rules and regulations to exert its power in East Asia.

Impacts - Japan, Malaysia, Vietnam

Yuri S.

Japan

Malaysia

Vietnam

THE FUTURE OF TPP

PARK JUNMIN

Current Issues

- Members

- Started as P4 (New Zealand, Brunei, Singapore and Chile)

- -> after 2008, expanded to P4+8 (including the US, Vietnam, Australia,

Peru, Malaysia, Mexico, Canada and Japan)

- 8 more countries which currently DESIRES to join (South Korea,

Taiwan, Philippines, Colombia, Thailand, Indonesia, Sri Lanka and the

UK)

- How about US?

- After Donald Trump has been elected as the president of the US, has

become not sure whether US will join TPP or not

- “Would only join TPP if the deal were substantially better than the

deal offered to Pres. Obama.” - President Donald Trump

Future Implications of TPP

- Massive scale of FTA and maybe even ‘common market ‘

- TPP P4+8 massive FTA -> making a massive economic bloc almost

equivalent to that of the common market

- Can deal with the massive Chinese market

- “When more than 95 percent of our potential customers live outside

our borders, we can't let countries like China write the rules of the

global economy” - Barack Obama

- Possible inter-relationships with the EU

- EU has also suggested joining -> EU-TPP FTA (ETFTA)

Possible Scenario 1

If US JOINS TPP

- Many countries will seek TPP as an opportunity for access to the US market

- -> more countries will try to join (including South Korea, Indonesia and the UK)

- One of the biggest economic bloc of FTA- Includes 1st & 3rd largest economies (US and Japan) and almost half of the world’s trading

regions (the Asia Pacific Region)

- Implications to China

- Probably will try to negotiate RCEP (Regional Comprehensive Economic

Partnership) as soon as possible to fight against TPP

- However, the possibility will be highly decreased compared to before

TPP is fully in effect

Possible Scenario 2

IF US does NOT join TPP

- The US alone consists of more than 65% of TPP’s GDP

- -> TPP becomes a Japan-led organization -> many member states will

withdraw from TPP

- Implications to China

- High possibility in successfully executing RCEP

- But still have many obstacles compared to TPP (no India, no FTA

upon Intellectual Property Rights, exceptions only for China etc.)

References

● http://asean.org/category/asean-statement-communiques/

● http://www.gov.cn/zhuanti/2017lkqcxldrhy/recp.htm

● https://www.bloomberg.com/news/articles/2017-11-09/still-no-deal-for-nations-looking-to-save-tpp-after-trump-s-exit