After five years of struggle, the United States, Japan and 10 other economies in Asia and Latin America signed a massive trade pact: the Trans-Pacific Partnership (TPP). The winners are obvious: US President Barack Obama and Japanese Prime Minister Shinzo Abe as well as, arguably, the US and Japanese economies. Obama can leave office with a strong demonstration of the US pivot to Asia and Abe can finally argue that the third arrow of his Abenomics program is not empty.
Labor’s proposals designed to “safeguard” Australian workers under the China-Australia Free Trade Agreement (ChAFTA) are a step in the right direction and are likely to break the impasse that has prevented the trade agreement passing through the Senate.
In essence, Labor has recommended amending the Migration Act 1958 to address three areas of concern arising from the ChAFTA.
A bipartisan letter from the US House of Representatives has urged the US government to verbally and physically challenge, China’s purported claims to 12 nautical mile territorial seas around its artificial formations in the South China Sea. The letter also implies that China’s actions are threatening ‘freedom of navigation’.
The recent Trans-Pacific Partnership agreement presents Asia with good, bad and ugly scenarios.
Had the TPP failed, that would have been a severe blow to the credibility of the United States in Asia. Yet, it excludes Asia’s largest economies – China, Indonesia and India.
Not a game changer but vital to US credibility
On Monday, October 05, 2015, the United States and 11 other Pacific Rim nations reached a final agreement on the largest regional trade accord in history. Now, the treaty needs approval from Congress, and many analysts fear this could be the toughest fight of President Obama’s final year in office.
It took nearly eight years, but a dozen countries on both sides of the Pacific Rim, which account for 40% of the world’s GDP reached a trade agreement. Attention will now shift to the ratification process.
Significant legislative and practical challenges in enhancing consumer product safety law remain in many parts of Southeast Asia. But liberalising trade within ASEAN and with its outside trading partners has led to major progress in consumer protection standards.
The Schengen area has never tested to the same level as it is now. The unprecedented volume of refugees and migrants arriving in Europe has left its leaders struggling to cope. Germany’s chancellor, Angela Merkel, issued a sober warning that the crisis puts Schengen into question, while Italy says it is ready to impose border controls and Hungary has sealed off its main train station.
Egypt has opened a second lane to the Suez Canal amid much fanfare. The US$8 billion dollar expansion adds 35km of new channels to the existing canal and another 35km where existing bodies of water were dredged to make way for larger ships. This will supposedly increase capacity from 50 transits a day to 97 and cut waiting times from 18 to 11 hours, which the Suez Canal Authority claims will more than double annual revenue to US$13.2 billion by 2023.
Ever since Jagdish Bhagwati coined the phrase ‘spaghetti bowl’ to describe the maze of overlapping preferential trade arrangements (PTAs), trade economists have been split over whether such deals are ‘building blocks’ or ‘stumbling blocks’ for the multilateral trading system.
