Economic Integration Efforts Press Onward in Asia-Pacific Region
The past week has seen a series of regional integration efforts continue among Asia-Pacific economies, including a two-day summit among the signatories of the Trans-Pacific Partnership (TPP) and select other countries in the Chilean city of Viña del Mar, as well as meetings of other groupings on expanding trade and financial ties.
Trade watchers and officials alike have been looking to the 14-15 March summit in Viña for giving some type of clarity on where the TPP may go following the US’ withdrawal from the pact, along with featuring discussions regarding other efforts at developing deeper ties within the region.
US President Donald Trump withdrew his country from the TPP in January, shortly after taking office. However, his government had reportedly sent its ambassador to Chile, Carol Perez, to the meeting in Chile this week. (See Bridges Weekly, 9 February 2017)
“This meeting in Chile will be the first opportunity that all of us will have coming together as TPP countries to talk about the future sans the United States,” said Australian Trade Minister Steven Ciobo on 9 March, previewing the Viña del Mar summit.
Indeed, what shape the TPP may take going forward remains an open question, as some signatories such as Australia have advocated a “TPP minus one” approach, while others such as Malaysia have reportedly questioned whether such an option would indeed be viable given the economic loss from the US’ exit.
A joint statement released on behalf of TPP partners – minus the US – on 15 March did not confirm whether they had reached any sort of convergence on what the trade deal’s future might be. Rather, the statement refers to the partners’ “firm commitment to collaborate in keeping markets open” and raises their shared fears regarding “protectionism in many parts of the world.”
Along with referring to the trade deal’s “balanced outcome and strategic and economic significance,” the statement refers to a discussion between TPP partners on possible next steps, confirming only that senior trade officials are due to meet again ahead of a ministerial-level gathering on the sidelines of the Asia-Pacific Economic Cooperation (APEC) trade ministers’ meeting in Hanoi, Vietnam on 20-21 May.
Pacific Alliance involvement
Notably, the Chilean meeting was also set up as a gathering between TPP signatories and members of the Pacific Alliance, along with China and South Korea. The Pacific Alliance is a four-country group that includes Chile, Colombia, Mexico, and Peru. It was launched in 2012 and has since announced advances such as a tariff elimination deal. (See Bridges Weekly, 13 June 2012 and 13 February 2014)
The Pacific Alliance held its own leaders’ level “virtual summit” just last week in which they declared their “decision that the [group] be a platform to connect Latin America with Asia, underneath a framework of strategic integration based on free trade.”
The Chilean General Directorate of International Economic Relations (DIRECON, by its abbreviation in Spanish) termed the high-level meeting with Pacific Alliance members, TPP countries, China, and South Korea as an “opportunity to address the challenges we face with creativity and conviction.”
“One of the principles that has inspired the Pacific Alliance since its inception has been the creation of opportunities for dialogue with other countries and trade blocs,” said the DIRECON website in explaining the move. Of the four members of the Pacific Alliance, only Colombia is not also a TPP signatory.
Countries listed as attending this “high-level dialogue on integration initiatives in the Asia-Pacific region” included Australia, Brunei, Canada, Chile, China, Colombia, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, South Korea, the United States, and Vietnam.
“We believe in free trade and we are convinced that an open economy is beneficial and positive to our countries. We need to progress towards more inclusive trade liberalisation so that the benefits of free trade will reach the whole population,” said Chilean Foreign Affairs Minister Heraldo Muñoz.
“We're having the opportunity… for TPP countries and Pacific Alliance to come together, to talk about trade in the region, to talk about alternatives and pathways forward. That's an important contribution for people to have and an important discussion for us to have at this early stage in 2017,” said Ciobo ahead of the meeting.
RCEP talks continue
Separately, another regional trade initiative continues underway among a 16-country Asia-Pacific group known as the Regional Comprehensive Economic Partnership (RCEP).
The RCEP negotiations have been underway since 2012, and include all members of the 10-country Association of Southeast Asian Nations (ASEAN) as well as their six FTA partners: Australia, China, India, Japan, New Zealand, and South Korea.
While the group had aimed to conclude the talks in 2016, that date was later pushed back. RCEP participants held their seventeenth negotiating round from 21 February to 3 March, marking their first such gathering in the new year. (See Bridges Weekly, 10 November 2016)
According to a summary issued by the Australian Department of Foreign Affairs and Trade, the group saw advances in discussions on intellectual property and e-commerce, along with market access and select other topics.
“It was clear in Kobe that participating countries recognised the need for negotiations to intensify, particularly in light of recent global developments, and the potential for an RCEP Agreement to boost business confidence, benefit consumers, and reinforce the region’s contribution to global growth,” the summary read.
The next negotiating round will be hosted by the Philippines in May, though whether the group will aim to reach a deal by year’s end remains unclear.
ICTSD reporting; “Malaysia Reacts Coolly to Prospect of Trade Pact Minus U.S.,” BLOOMBERG, 13 March 2017; “After US drops trade role, China joins TPP members states in talks,” CNBC, 14 March 2017; “NZ, Australia to get first post-Brexit trade deals – McClay,” NEWSHUB, 15 March 2017; “China and Japan vie for control of Asia trade deal,” FINANCIAL TIMES, 14 March 2017; “Donald Trump no mandará equipo a reunion en Chile que analizará futuro del TPP,” EFE, 10 March 2017.