The inking of the deal, first “means that notwithstanding doubts arising as a result of President Trump's abrupt pull-out from the landmark pact, the strong international consensus is that reducing trade barriers and providing opportunities for growth across entire regions will maximize the benefits of global trade,” according to Fred Burke, managing partner at the Baker&Mc Kenzie law firm. “It signals an international order that is increasingly multi-lateral, not dominated by a single economy or group,” he pressed.
Meanwhile, Vo Tri Thanh, senior expert of the Central Institute for Economic Management (CIEM) focuses on the possibility that the CPTPP would welcome other members.
“England, South Korea and Thailand also signaled that they are open to the possibility of participating in the Asia Pacific trade pact,” said Thanh.
The move as he means, proves that the CPTPP is beneficial to many countries despite the withdrawal of Trump’s administration.
In January, at the World Economic Forum in Davos, Switzerland, US President Donald Trump showed his readiness to reopen trade talks if he could get a "better deal" for the United States.
In theory, the CPTPP is an open platform which allows other countries to join if they meet requirements. As such, the US may rejoin the CPTPP in the long term. However, in the short term, this is still impossible, Vo Tri Thanh told Hanoitimes.
To be specific, Thanh mentions three scenarios should the US come back to the deal.
“Firstly, the US may want to continue with the TPP’s requirements; secondly, the US may go with the CPTPP’s requirements; or thirdly, the 12 members have to re-negotiate. But whatever scenario it may be, there remains a negative sense that the US will no longer be the rule-setter or key player like it used to be in the TPP negotiation,” said the Vietnamese economic expert.
“Washington used to set the rules for the TPP, however, after President Trump withdrew, the remaining 11 members led by Japan have concluded the renegotiation. As such, the US’s position is no longer like it used to be,” Vo Tri Thanh said.
In that case, Fred Burke believes the US no longer possesses the bargaining power it once had as with the original TPP.
“As for the US, the provisions of the TPP that it bargained most heavily for are merely suspended, so that if the US chooses to come back within, say, 5 years, it may do so without asking for any new concessions,” explained Fred Burke to Hanoitimes.
In the meantime, the US will lose ground in terms of its agricultural exports, where its competitors from Canada, Australia, and the EU (under the EU-Vietnam FTA) will enjoy better duty rates, according to the lawyer.
The revised version of the TPP will reduce tariffs in 11 economies which covers a market of nearly 500 million people. In the absence of the US, it has been renamed as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on the sidelines of the 2017 APEC Summit in Da Nang, Vietnam.
