The Economist: The TPP is dead

The chief economist of The Economist magazine, Simon Baptist, believes that the Trans-Pacific Partnership (TPP) trade deal is dead following the failure of final round negotiations in Hawaii last week. Here’s Baptist’s latest commentary on the TPP from his latest email newsletter:

The latest talks on the Trans-Pacific Partnership (TPP) did not end well and election timetables in Canada and the US mean that the prospect of a deal being ratified before the end of 2016 (at the earliest) is remote. The usual problem of agricultural markets was prominent, headlined by Canada’s refusal to open its dairy sector. For New Zealand—one of the four founder countries of the TPP, along with Brunei, Chile and Singapore—this was a non-negotiable issue. Dairy was not the only problem. As usual, Japan was worried about cars and rice, and the US about patent protection for its pharma companies.

The TPP was probably doomed when the US joined, and certainly when Japan did. It then became more of a political project than an economic one. Big trade agreements had hitherto focused on physical goods, while the TPP had an aim of forging rules of trade beyond this in intellectual property, investment and services. China was a notable absence, and the US and Japan, in particular, were keen to set these rules with enough of the global economy behind them such that China would be forced into line later on. For now, the shape of international standards in these areas remains up for grabs. The next step for the TPP, if anything, is whether a smaller group—such as the founding four —will break away and go ahead on their own, with a much smaller share of global GDP involved, and in the hope that others will join later.

Obviously great news if it is true.

Leith van Onselen
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  1. LabrynthMEMBER

    That last line worries me, ‘hope of a breakaway of a smaller group’. Knowing Australia, and their incessant need to have a presence on the global stage they will sign anything to fell like they are ‘part of the club’.

    • Andrew Robb: “Listen guys, I know this has fallen apart, but I am still keen on sorting out my post parliamentary career. I’ll adjust the Australian-US FTA to ensure you can sue us for minor IP breaches, and I’ll gut the PBS. We really don’t need sugar access, it’s only 4,000 farmers. Deal?”

    • “Knowing Australia, and their incessant need to have a presence on the global stage they will sign anything to fell like they are ‘part of the club’”
      – — – more like needing to have their head fully up the Yanks A$$hole ! They ask -we obey. FMD!

  2. C.M.BurnsMEMBER

    i thought the TPP was a brainchild of the US as part of it’s pacific-pivot; deliberately structured to isolate china on trade matters ?

    • truthisfashionable

      That’s probably why China pointed out it should be negotiated transparently. By keeping it secret, China wouldn’t really know what is being discussed, keeping them at a distinct disadvantage.

      As other’s have suggested, I won’t believe this is over until Liberal are out of office.

      • C.M.BurnsMEMBER

        our ruling party is irrelevant, the TPP negotiations were started in labor.

        We need the US, Canada or Japan (or many of the smaller nations) to take their ball and go home for their respective domestic reasons.

      • Yes exactly. The entire lot of them need to go. For all their “fighting” they are still in cahoots with each other to shore up their own interests. Politicians are scum.

    • No, the founding four were Chile, NZ, Brunei and Singapore to begin with. The oddest mix of countries since the Cairns group.

      The USA then got on board and attempted to use it which is when Australia jumped in.

      • C.M.BurnsMEMBER

        thanks cornflakes. a trade deal with four small nations, each with only 1-2 dominant exports probably makes sense actually. i bet they’re all pissed at how the US ruined it for everyone

    • Correct, part of the bigger play between China and US think Asia Investment Bank, Silk Route. Get what you can before position solidify into the future status quo…

  3. JamesTheBearMEMBER

    I really wouldn’t bank on it being dead at all – Canada’s “caretaker” government have just issued new draft guidelines that say it is acceptable for them to continue negotiating the TPP…see and if that doesn’t outrage you enough, this is even better…. Amazingly Australia has not voiced a single objection in this chapter, looks like we;ll have to rely on New Zealand to stand up for us.

  4. I think it’s the best for Australia to have a “dead” TPP. From what I have been reading on this subject, most of the favourable provisions were for the US and not Australia.

  5. I’m glad it’s over so I don’t have to hear you lot whinge anymore.

    That said, there was such a horrible lack of transparency all around that it was frightening that something of this magnitude could pass with no disclosure to the people.