Asian Development Bank concerned about TPP

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The Asian Development Bank on October 24 expressed concern over the “ambitious and wide-ranging” agenda of the Trans-Pacific Partnership (TPP), a proposed regional free trade agreement under negotiation between the US Japan and 10 other countries in east Asia and the Americas.

In the Asian Economic Integration Monitor, a semiannual review of Asia’s regional economic cooperation and integration, the bank said it believes some countries will miss the year-end deadline for TPP to conclude the talks.

“Although the TPP’s agenda is ambitious and wide-ranging, it remains to be seen what can be agreed on, given the diversity of its membership,” says the report.

The report also casts doubt on ASEAN’s Regional Comprehensive Economic Partnership, known as the RCEP, with Australia, China, India, Japan, South Korea and New Zealand being completed by its target date of 2015.

“But this is highly unlikely given the difficulties noted earlier of folding multiple, disparate agreements into one that is region-wide,” the report says.

TPP and RCEP are two major free trade agreements involving ASEAN or some ASEAN members. Throughout the 1980s and 1990s, the report says ASEAN has embarked on a combination of multilateral and unilateral measures to reduce barriers to trade goods, services and investments. Since 2000, however, the report says, “There has been less progress on multilateral liberalisation, and domestic reform has slowed significantly as a result.”

“One partial response has been the proliferation of Asean FTAs,” says the report. However, it says a closer look at ASEAN free trade agreements shows a “shift from unilateral liberalisation to preferential liberalisation has not led to further external opening or domestic reforms.”

Moreover, the report says the trade pacts are “weak and trade-light.”

“In other words, while the agreements commit the parties to eliminating tariffs on trade between themselves, they do not effectively address regulatory barriers and other non-tariff barriers like product standards and mutual recognition agreements, services, investment, intellectual property rights, government procurement or the movement of business people – which are all more important than tariffs for regional economic integration.”

Thus, the report says, the trade agreements ASEAN has concluded “hardly promote regional economic integration or ASEAN’s integration with the wider Asia or the global economy.”

Four ASEAN members – Brunei, Malaysia, Singapore and Vietnam –have decided to join the TPP that also involves Australia, Canada, Chile, Japan, Mexico, New Zealand, the US and Peru.

“The TPP involves four ASEAN members and features an agenda that is wide-ranging and demanding, more so than the RCEP or other FTAs,” the report says.

But the TPP excludes six ASEAN members, including Thailand, as well as China and South Korea, and “a significant increase in Asian membership is needed before (the TPP) could be considered a serious alternative to the RCEP,” the report says.

“More generally, without participation of these economically important countries, there is serious concern that the current TPP membership satisfies the critical mass criterion,” the report says. “The same concern applies to the current makeup of RCEP.”

“The need to provide exemptions, or ‘carve outs,’ to avoid a collapse in negotiations also raises concerns over the final form the TPP will take,” the report says.

It also criticises the secrecy surrounding the TPP negotiations, “making it difficult to assess progress.”

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Reading Time: 2 minutes

Click to enlarge

The Asian Development Bank on October 24 expressed concern over the “ambitious and wide-ranging” agenda of the Trans-Pacific Partnership (TPP), a proposed regional free trade agreement under negotiation between the US Japan and 10 other countries in east Asia and the Americas.

Reading Time: 2 minutes

TPP-Data
Click to enlarge

The Asian Development Bank on October 24 expressed concern over the “ambitious and wide-ranging” agenda of the Trans-Pacific Partnership (TPP), a proposed regional free trade agreement under negotiation between the US Japan and 10 other countries in east Asia and the Americas.

In the Asian Economic Integration Monitor, a semiannual review of Asia’s regional economic cooperation and integration, the bank said it believes some countries will miss the year-end deadline for TPP to conclude the talks.

“Although the TPP’s agenda is ambitious and wide-ranging, it remains to be seen what can be agreed on, given the diversity of its membership,” says the report.

The report also casts doubt on ASEAN’s Regional Comprehensive Economic Partnership, known as the RCEP, with Australia, China, India, Japan, South Korea and New Zealand being completed by its target date of 2015.

“But this is highly unlikely given the difficulties noted earlier of folding multiple, disparate agreements into one that is region-wide,” the report says.

TPP and RCEP are two major free trade agreements involving ASEAN or some ASEAN members. Throughout the 1980s and 1990s, the report says ASEAN has embarked on a combination of multilateral and unilateral measures to reduce barriers to trade goods, services and investments. Since 2000, however, the report says, “There has been less progress on multilateral liberalisation, and domestic reform has slowed significantly as a result.”

“One partial response has been the proliferation of Asean FTAs,” says the report. However, it says a closer look at ASEAN free trade agreements shows a “shift from unilateral liberalisation to preferential liberalisation has not led to further external opening or domestic reforms.”

Moreover, the report says the trade pacts are “weak and trade-light.”

“In other words, while the agreements commit the parties to eliminating tariffs on trade between themselves, they do not effectively address regulatory barriers and other non-tariff barriers like product standards and mutual recognition agreements, services, investment, intellectual property rights, government procurement or the movement of business people – which are all more important than tariffs for regional economic integration.”

Thus, the report says, the trade agreements ASEAN has concluded “hardly promote regional economic integration or ASEAN’s integration with the wider Asia or the global economy.”

Four ASEAN members – Brunei, Malaysia, Singapore and Vietnam –have decided to join the TPP that also involves Australia, Canada, Chile, Japan, Mexico, New Zealand, the US and Peru.

“The TPP involves four ASEAN members and features an agenda that is wide-ranging and demanding, more so than the RCEP or other FTAs,” the report says.

But the TPP excludes six ASEAN members, including Thailand, as well as China and South Korea, and “a significant increase in Asian membership is needed before (the TPP) could be considered a serious alternative to the RCEP,” the report says.

“More generally, without participation of these economically important countries, there is serious concern that the current TPP membership satisfies the critical mass criterion,” the report says. “The same concern applies to the current makeup of RCEP.”

“The need to provide exemptions, or ‘carve outs,’ to avoid a collapse in negotiations also raises concerns over the final form the TPP will take,” the report says.

It also criticises the secrecy surrounding the TPP negotiations, “making it difficult to assess progress.”

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