Trade

Where should the Trans-Pacific Partnership negotiations go next?

Where should the Trans-Pacific Partnership negotiations go next?Officials have been scrambling to conclude the negotiations of the Trans-Pacific Partnership (TPP) among the current 12 participating members: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Viet Nam. As the talks reach the finish line, officials need to focus on several key broader issues that will set up the institutional structure for the TPP going forward.

The TPP’s wide scope

The TPP is not just another free trade agreement (FTA). This mega-regional deal is setting the terms of trade across a range of trade topics. It includes not only tariff reductions, but also services liberalization, investment protection, and market access commitments as well as many new behind-the-border commitments, such as government procurement, intellectual property rules, labor and environmental rules, as well as new pledges on food safety and customs. In all, there are nearly 30 chapters with many areas that go beyond existing commitments in global or regional settings.

Such a complex agreement cannot be managed by overworked officials using the normal committee and review structures built into other FTAs.

Instead, the TPP should include several key features to ensure that it remains relevant in the future. For example, officials talked early on about turning the TPP into a “living agreement” subject to period review and adapted to new circumstances. This would guarantee that provisions never go out of date. Instead, they would be regularly updated as officials and regulators work together over time.

Turning the TPP into a living agreement will help boost the limited provisions in the current texts, in areas such as regulatory coherence, or small and medium enterprise support for example. It is time to return to the idea of a living agreement and put it into practice in a meaningful way.

This task will only be possible, however, with another feature—the creation of a TPP Secretariat. Such an institutional set up is critical to the long-term structure of the agreement. As it stands, the TPP involves extensive commitments from the 12 member countries. More members are likely in the future. Managing it all will require a dedicated team.

Task too big for APEC Secretariat

The task cannot be left to the existing APEC Secretariat. Although the current TPP members are all APEC members, this situation may not hold in the future. Splitting the APEC staff into TPP and non-TPP functions would run the risk of diluting the functions of both sides.

Finally, before the TPP concludes, officials will need to think very creatively about how to handle accession for new members. In particular, they will need to be inventive about how to encourage new participants in the first tranche. They need to get as many members as possible to get in all at once and, especially, to encourage the People’s Republic of China to participate. But this will not happen if some degree of flexibility is not allowed for this first batch of new members.

Encouraging flexibility will be tricky. It is not just that current members will be reluctant to allow changes to a document that has taken nearly four years to complete. If too many alterations are made, it could trigger new ratification procedures in existing members. So officials will have to find a balance that persuades new countries to join while preserving what has already been achieved.

Such decisions taken now will help create the institutional structure to keep the TPP relevant for years to come.
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Reference:

Deborah K. Elms. 2013. The Trans-Pacific Partnership Agreement: Looking Ahead to the Next Steps. ADBI Working Paper. No. 447. Tokyo: Asian Development Bank Institute.

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Deborah Elms

About the Author

Deborah Elms is head of the Temasek Foundation Centre for Trade and Negotiations, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore.
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