When President Barack Obama said, ‘The TPP means that America will write the rules of the road in the 21st century’, he was not speaking metaphorically. Large passages in the final text were lifted verbatim, sometimes en masse, from past US free trade agreements (FTAs).
The collapse of South Korean company Hanjin Shipping has left ships, cargo and crews stranded around the globe. It highlights the complex consequences of a shipping company going bankrupt, with Hanjin’s creditors and customers waiting to see whether the business can be saved.
It seems that the world has become unsafe for trade agreements. In particular, the Trans-Pacific Partnership (TPP), a major new trade deal among the United States and 11 other Pacific Rim nations, has become a political lightning rod for both the left and the right.
Over the last few years, negotiations for the Trans-Pacific Partnership (TPP) have provoked waves of criticism and suspicion in the Asia Pacific. Today, the kinds of criticism that burdened the TPP — that the negotiations were slow and tedious, and that the agreement needs more transparency and accountability — are being applied to the Regional Comprehensive Economic Partnership (RCEP).
No issue better illustrates the agony and self-inflicted wounds in the Republican Party than the Trump-inspired clashes over the future of US trade policy. While the Democratic Party has been wracked by deep divisions over trade for three decades — fuelled by opposition from key constituents such as labour and environmentalist organisations — Republicans have been fairly united in the belief that international trade agreements represented an extension of domestic doctrines of deregulation and market competition to the international level.
Since trade started being emphasized as a locomotive of growth, export promotion trade policies have become a popular option for countries in search of higher economic growth rates. East Asian countries in particular have witnessed a distinct success in terms of rapid economic growth after the adoption of outward-looking trade policies.
Tanzania’s refusal to sign a new trade deal between the East African Community (EAC) and the European Union (EU) has generated anxious reactions. If news reports are to be believed, plans had been made for a signing ceremony to take place during the just-concluded United Nations international conference on trade in Nairobi.
With Brexit on the horizon, the UK must decide what kind of trade relationship it should craft with the European Union. The cases of Norway, Switzerland, Canada and other members of the WTO offer inspiration. All have varying degrees of access to the single European market, and particular rights and obligations. So how do they differ?
1. Norway
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This weekend G20 trade ministers shall meet in Shanghai. It is an opportunity for China to pave the way for the G20 Summit in Hangzhou in September. Led by China, G20 economies could refocus global attention to world trade and investment, even amid rising economic uncertainty, market volatility and political risk.
Indeed, one of the greatest risks the global economy is currently facing is world trade. It has not just slowed down. It has nearly collapsed. What world trade needs is aggressive, multi-front acceleration.
World trade is falling
Talks just concluded in Auckland, New Zealand on Saturday show that plans for the Regional Comprehensive Economic Partnership (RCEP) are advancing. Just as both Hillary Clinton and Donald Trump, the next potential leaders of the Trans-Pacific Partnership’s (TPP) biggest partner—the US—have distanced themselves from the agreement. Some even suggest that the US Congress won’t ratify the TPP agreement, and warn that the world economy risks US isolationism.
