SYDNEY, Oct 31, 2018 (BSS/AFP) – A massive trans-Pacific trade deal
cleared a final hurdle Wednesday allowing it to enter into force this year, a
pointed rebuke of President Donald Trump’s protectionist policies from some
of America’s closest allies.
Hours before an administrative deadline, Australian Prime Minister Scott
Morrison announced that his government had ratified the 11-country pact,
meaning a quorum of more than half the members have formally signed on.
“Australia is the sixth country to ratify the agreement, meaning it can
now enter into force on 30 December this year,” said centre-right leader
Morrison.
Other signatories include G7 economies Japan and Canada.
The so-called Trans-Pacific Partnership (TPP) has had an arduous birth and
had appeared to be floundering when Trump withdrew US participation shortly
after coming to office.
That turned out to be the opening salvo in Trump’s winner-takes-all,
“America first” and threat-heavy approach to trade relations.
Frantic behind-the-scenes, Japanese-led diplomacy kept a slimmed-down
version of the pact alive among the remaining members — in the hope that
Washington will have a change of heart, or government, and will eventually
join.
The deal was spearheaded by then-president Barack Obama, who saw it as a
geopolitical power play, with ramifications far beyond trade — a way of
binding rising Asian powers into a rules-based, American-backed order and
countering China’s might-is-right approach to commerce in the Asia-Pacific
region.
Even without the participation of the world’s largest economy, the deal
has been described as a game changer.
It covers many rapidly growing economies that account for around 14
percent of world trade.
– Lower tariffs –
As well binding countries into a tougher legal framework for trade,
lowering tariffs and opening markets, the pact will also introduce new labour
standards and force some governments to bring competition into sectors long
dominated by insiders and political cronies.
Canada, Japan, Mexico, New Zealand and Singapore have already signed off
on the agreement, meaning more than half of the members have ratified.
On December 30, a first round of tariff cuts will now come into effect.
“The timing means there will be the added bonus of a second round of
tariff cuts on 1 January 2019,” said New Zealand trade minister David Parker.
“I expect other signatories will come on board” he added, referring to the
remaining five members who have not yet formally ratified — Brunei, Chile,
Malaysia, Peru and Vietnam.
“Many are working hard to progress their applicable domestic procedures,”
he said.
But not everyone is convinced the deal will transform the world.
With the US gone, “the TPP became a bulwark against protectionism,
sustaining the flame for free trade until Trump leaves office and things
return to normal,” Tom Chodor, a professor at Australia’s Monash University
recently wrote.
“As Trump continues to transform the Republican Party and the United
States, the notion that things will go back to ‘normal’ after his departure
is looking increasingly problematic,” he said. “Even without Trump, Trumpism
might be here to stay.”
“There is little chance of a US-less TPP exerting leverage on China,”
Chodor added.
Countries like Indonesia have indicated they would like to join, but would
first need to embark on wholesale economic reforms that would threaten the
business interests of local powerbrokers.