Japan’s upper house of parliament ratified the Trans-Pacific Partnership (TPP) Agreement on Friday 9 December, marking the final stage for the Asian economy’s approval of the accord.
Japan is the second-largest economy by GDP in the Pacific Rim trade deal, surpassed only by the United States. Under the current TPP terms, both economies would need to ratify the trade agreement for it to enter into force.
The news of Japan’s ratification comes just weeks after US President-elect Donald Trump reaffirmed his campaign pledge to begin removing the US from the 12-country accord once he takes office in January. (See Bridges Weekly, 24 November 2016)
However, various officials from other TPP countries have indicated that they intend to proceed with their ratification processes, with some such as Australian Trade Minister Steven Ciobo suggesting that the situation in the US could evolve once the dust settles from the leadership transition. (See Bridges Weekly, 8 December 2016)
Of the other TPP signatories, New Zealand has already passed legislation for ratifying the accord. Various others have already introduced the necessary bills into their domestic legislatures.
“It’s good to see the world’s third-largest economy join New Zealand and show leadership on liberalisation,” said New Zealand Trade Minister Todd McClay in response to Japan’s TPP ratification.
RCEP countries hold 16th round
Meanwhile, countries participating in another Asia-Pacific trade initiative known as the Regional Comprehensive Economic Partnership (RCEP) concluded their sixteenth round of negotiations in Indonesia late last week.
The 16-country group includes all ten members of the Association of Southeast Asian Nations (ASEAN), together with their free trade agreement partners: Australia, China, India, Japan, New Zealand, and South Korea.
Talks for the accord kicked off in 2012 with a view to achieving “a modern, comprehensive, high-quality and mutually beneficial economic partnership agreement among the ASEAN Member States and ASEAN’s FTA Partners,” according to the guiding principles released at the time. (See Bridges Weekly, 21 November 2012)
While the group had previously indicated their goal of inking a deal in 2016, that timeframe has now been pushed back, with a draft work program and schedule being prepared for the coming year.
This most recent round reportedly saw the conclusion of a chapter dedicated to small and medium-sized enterprises (SMEs), marking the second completed chapter of the deal, according to RCEP officials quoted in the Jakarta Post. (See Bridges Weekly, 10 November 2016)
Other topics on the docket for a future RCEP deal include trade in goods and services; investment; intellectual property; competition; and dispute settlement, among other potential issues. The chapter on economic and technical cooperation has already been completed. The next round is expected next February in Japan.
Australia, Indonesia aim to clinch 2017 deal
In other regional news, two members of RCEP – Australia and Indonesia – are working to finalise their own bilateral negotiations for a Comprehensive Economic Partnership Agreement (IA-CEPA) by the end of 2017 or sooner, according to Australian Trade Minister Steven Ciobo.
Negotiations for such a deal initially kicked off in 2010. There have been five rounds of formal talks to date, with the initiative “reactivated” this past March. Officials say that the accord aims to build on the various other existing deals that the two countries are a part of, including the FTA between ASEAN, Australia, and New Zealand.
“This is a market of 250 million people, around 50 million middle class Indonesians and that’s expected to continue growing. It’s a tremendous opportunity for Australia to be able to export to this market,” said Ciobo in an interview with ABC News 24, according to a transcript provided by his office.
“When we formally announced the resumption of these negotiations in March of this year we said it’d take 12 to 18 months, so we’re on track for, I hope, a successful conclusion around the middle to end of next year,” he added.
Separately, China and New Zealand are preparing to update their existing trade deal, announcing that the negotiations to do so will begin next year. (See Bridges Weekly, 24 November 2016)
ICTSD reporting; “Approval of TPP needed to keep momentum of free-trade deal alive,” THE JAPAN NEWS, 10 December 2016; “Japan Ratifies Trans-Pacific Partnership, Which Trump Has Promised to Leave,” THE WALL STREET JOURNAL, 9 December 2016; “Asia trade pact gains traction in Jakarta talks,” BLOOMBERG NEWS, 10 December 2016.