The battle for Asian trade is on.
“We have decided to move forward together, in particular with the Asia-Pacific countries,” Agence France-Presse reported Mexican foreign minister Luis Videgaray as saying after two days of meetings of ministers from the 11 other TPP nations, plus China and South Korea. “The withdrawal of a very important member of TPP opens up new opportunities.”
Whatever the details of the new deal, ministers stressed that it has to be of the same “high quality” as TPP when it comes to labor and environmental regulations, and intellectual property protections in particular. The deal would also have to come in the short-term as so much time will be lost for trade if a new process follows an at all similar timeline to the TPP talks.
According to officials, a TPP 2.0 with China looks to be on the table, though there’d be much still to consider as to whether that would work.
“It would be up to China to decide, within its strategy, whether it can adopt the (regulatory) disciple of TPP,” Mexican economy minister Ildefonso Guajardo told Agence France-Presse.
What about China’s RCEP?
While the cast out TPP countries plot their own way forward for trade, China continues to brew its rival TPP deal, the Regional Comprehensive Economic Partnership (RCEP).
The RCEP includes the 10 ASEAN nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and the six countries ASEAN has free trade deals with: Australia, China, India, Japan, South Korea and New Zealand—essentially TPP without the Americas (the U.S., Canada, Chile, Mexico, Peru).
Part of the intent with TPP was to quell China’s influence on trade, but with the U.S. no longer part of the deal, China and its RCEP are in a prime position to pounce.
But with China back in the driver’s seat on trade, social and environmental regulations may not go off as planned under the would-have-been TPP.
According to NPR’s Anthony Kuhn, speaking after meetings last month in Beijing, “The RCEP is mostly aimed at cutting tariffs, and less at setting labor, environmental and intellectual property standards of the sort the TPP included.”