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Anne Petterd

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CPTPP, trade and investment, Asia Pacific, customs, rules of origin, cumulationThe 11 parties to the Trans-Pacific Partnership Agreement who remained following the withdrawal of the United States have set March 8th in Chile as the date for signing the successor to that agreement, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (“CPTPP”). Once ratified by at least six (6) of the 11 parties, the CPTPP will enter into force.  Below is a synopsis of what has changed in the new agreement and an overview of opportunities for businesses operating in the CPTPP area.

The Trans-Pacific Partnership (TPP) was hailed as a visionary trade deal — connecting economies across the world as far as Japan and Chile, and pushing forward high standards on labour and the environment and removal of non-tariff barriers to trade. Yet political developments have meant the TPP as agreed cannot be implemented. President Trump announced the withdrawal of the United States from the TPP in January 2017. As currently drafted, the TPP requires 85% of the parties’ GDP for implementation and the 85% threshold cannot be met without the United States.

The United States withdrawal from the TPP has left a vacuum in global trade leadership. However, Asia Pacific is not standing still and waiting for the United States to implement its “free but fair trade” trade policy agenda. There have been significant movements forward for free trade in Asia Pacific without the United States.

Australia is considering whether to adopt modern slavery legislation, similar to that found in the United Kingdom (UK) and California .  “Modern slavery” has been identified as including slavery, forced labour and wage exploitation, involuntary servitude, debt bondage, human trafficking, forced marriage and other slavery-like exploitation occurring today.

A current federal parliamentary Committee inquiry into the matter has received strong interest from a broad group including retailers, financial institutions, governments, not-for-profit organisations, universities, law firms, individuals and other interested parties. Supply chain transparency is a key area of focus for the inquiry, including requirements for relevant parties to report that their global supply chains are free of slavery and human trafficking.

It is still unknown whether there is enough support among the remaining 11 Trans-Pacific Partnership (TPP) parties for the deal to enter into force without the United States. While some parties, including Japan, New Zealand and Australia are receiving encouragement and making strong pronouncements of their commitment to charge ahead with the deal, other parties are expressing reluctance to do so.  Interestingly, many TPP provisions may find a new home in a renegotiated  North America Free Trade Agreement (NAFTA) and be used for bilateral trade deals with the United States.  So for now, parts of the TPP do not appear to be going away anytime soon.

Encouragement from US Senator John McCainTPP, NAFTA, trans-pacific partnership, bilateral agreements, new zealand, australia, japan, US Senator McCain

Most recently, during a visit to Australia in his speech to the United States Studies Centre, US Senator John McCain encouraged Australia and Japan to move forward with the TPP and that “hopefully, someday, in the future, under different circumstances, America will decide to join you.”  He also stated that the US withdrawing from the deal was damaging and a major strategic mistake.  Senator McCain’s statements are no doubt well received by Australia, Japan and New Zealand and will likely provide the parties hope that the US could change its position in the future.