TPP: Are they concrete progresses or more empty words?

Cheming Yang

US President Obama advocated joining the Trans-Pacific Partnership (TPP) in the 2011 annual summit of Asia-Pacific Economic Cooperation (APEC). All of a sudden, everybody is asking what TPP is.

According to Wikipedia, “TPP also known as the Trans-Pacific Strategic Economic Partnership Agreement is a multilateral free trade agreement that aims to further liberalize the economies of the Asia-Pacific region. The original agreement between the countries of Brunei, Chile, New Zealand and Singapore was signed on June 3, 2005, and entered into force on May 28, 2006. Six countries –Australia, Malaysia, Peru, Japan, United States, and Vietnam– are negotiating to join the group. Although all original and negotiating parties are members of the Asia-Pacific Economic Cooperation (APEC), the TPP is not an APEC initiative. However, it is considered as a pathfinder for the proposed Free Trade Area of the Asia Pacific (FTAAP), an APEC initiative. TPP negotiations have occurred on the sidelines of APEC summits since 2002. The objective of the original agreement was to eliminate 90 percent of all tariffs between member countries by January 1, 2006, and reduce all trade tariffs to zero by the year 2015. It is a comprehensive agreement covering all the main pillars of a free trade agreement, including trade in goods, rules of origin, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, trade in services, intellectual property, government procurement and competition policy.”

How is TPP different from WTO agreements or from respective FTA arrangements? Isn’t WTO established to achieve free trade globally? It is certainly true that it is a lofty but hard to accomplish goal. Consensus is difficult to come by among many countries. Too many countries also have difficulty to move in tandem. Therefore, regional efforts are thought to be more feasible and to the benefit of smaller economies in that it is easier to negotiate and the aggregate size of economy is more desirable for interested parties.

However, if it is more than regional, what purpose does it serve? Of course, it also depends on how to define region. Are Chile and Singapore in the same region? Yes and no. Yes in the sense that they both border the Pacific Ocean, but no in that they are far apart in physical distance. How about number and size? For TPP, if the original four is the right number and size, what will happen after adding the extra six? When TPP grows to be more than ten, is it that different from APEC itself? Free trade is definitely coveted by all, but the problem is that each country defines it in its own terms. More initiatives in promoting free trade are certainly welcome because actions speak louder than words. But if the actions are not practical, they are merely empty words themselves in the end.


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