Academic journal article Journal of Southeast Asian Economies

The Trans-Pacific Partnership: Origin, Evolution, Special Features and Economic Implications

Academic journal article Journal of Southeast Asian Economies

The Trans-Pacific Partnership: Origin, Evolution, Special Features and Economic Implications

Article excerpt

1. Introduction

In recent years, the world has been witnessing the proliferation of free trade agreements (FTAs). Notably, during the late 1980s and early 1990s, the number of FTAs started to increase sharply in Europe, Asia Pacific, and Latin America. At least two causal factors can be identified. One is European integration, which started in the 1950s and made substantial progress in the late 1980s, and influenced other countries such as the United States to pursue FTAs to secure export markets. The other factor is the slow pace of developments in multilateral trade negotiations. The Uruguay Round, the last multilateral trade negotiations under the General Agreement on Tariffs and Trade (GATT), began in 1986 and aimed to conclude in 1990. However, negotiations did not proceed as planned and went into a deadlock. Faced with a stalemate, GATT members that were eager to promote trade liberalization began to develop an interest in FTAs.

The Uruguay Round negotiations concluded in 1994, and the World Trade Organization (WTO) was established in 1995 as a successor to the GATT. Even then, the proliferation of FTAs continued because trade negotiations did not start until 2001. Although the Doha Development Agenda (DDA), the first multilateral trade negotiation under the WTO, began in 2001, FTAs continued to increase as the DDA did not make much progress.

Mega FTAs involving many major countries began to be discussed in the early 2000s. Three major initiatives began to be negotiated in the 2010s. Negotiations on the Trans-Pacific Partnership (TPP) began in March 2010 with eight members, including Australia, Brunei Darussalam (Brunei, hereafter), Chile, New Zealand, Peru, Singapore, the United States and Vietnam. The TPP negotiations involving twelve countries reached an agreement in October 2015, as four countries including Malaysia, Canada, Mexico and Japan joined the negotiations. The TPP treaty was signed by all twelve members in February 2016 Japan and New Zealand ratified the treaty, but its enactment is impossible because of the withdrawal of the United States under the new Trump government. The negotiations on the Regional Comprehensive Economic Partnership (RCEP) in East Asia involving sixteen East Asian countries, including China, India, and Japan, and the Trans-Atlantic Trade and Investment Partnership (TTIP) agreement involving the United States and twenty-eight European Union (EU) members began in May and August 2013, respectively. RCEP is currently under negotiation but TTIP negotiation was suspended in 2016.

In light of these developments, this paper discusses the TPP, the mega-FTA that attracted most attention in Asia-Pacific. It examines the TPP's origin, evolution, special features, and economic implications for the negotiating members, as well as other members of the Asia Pacific Economic Cooperation (APEC) forum. The topic is very relevant because the TPP is considered a pathway to a Free Trade Area of AsiaPacific (FTAAP), which is envisaged to include APEC members.

This paper is structured as follows. After this introduction, section 2 discusses the origin and evolution of the TPP. Section 3 examines economic profiles of the TPP members, as well as non-TPP APEC members. The subsequent section discusses special features of the agreement, while section 5 examines its economic impact. The final section presents concluding remarks, including the formation of the TPP-11.

2. Origin and Evolution of the TPP

The origin of the TPP can be traced back to the P4 (Pacific 4) Agreement, an FTA negotiated by Brunei, Chile, Singapore and New Zealand, which entered into effect in 2006. At several APEC meetings in the 1990s, Australia, Chile, New Zealand, Singapore and the United States (P5) held informal meetings to discuss mechanisms for creating a new type of trade agreement among "like-minded" states. (1) Out of the P5, Chile, Singapore and New Zealand, which shared very high enthusiasm for establishing a high-level FTA, launched the negotiations at the APEC Leaders' Summit in 2002. …

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