TPP could be gateway to prosperity for Asia

The Straits Times/Asia News Network

SINGAPORE — The Trans-Pacific Partnership (TPP) framework being worked on will regulate trade and government-private sector relations in the world’s strongest growth region well into the century. It could be an exemplar in the spread of prosperity that past global trade codes and the current struggling Doha round have not managed well enough. That makes it crucial for the TPP negotiating parties to get the mechanics right and the membership as complete as possible. On no account should the TPP be deliberately selective: Any Pacific-rim nation that meets compliance standards and accepts the objectives of association should be welcomed. APEC nations are right to wonder whether it will make sense for a Pacific trade framework to be missing China: Shades of Hamlet without the prince? Indonesia, a rising star and a market to die for, is also missing. If the geographical definition were not so literal, contiguous India would also be a power of good being included. But China is the one imponderable. The United States is setting the pace in the TPP’s formation as part of its scheme of Pacific engagement, while conflicting signals are coming out of China. Does it want in or out? Does it see obstacles?

The TPP will start life badly if it inadvertently is turned into a contest for influence between the world’s two pre-eminent powers. One wishes for clarity — and soon. This is a big deal. A working deadline of under a year which has been reportedly set for the TPP’s inauguration is patently optimistic, but it says time is short for the membership to be formalized. No nation will want to be admitted into a complex legal formulation after the fact, often with political trade-offs. Above all, there should be no illusions that a dozen countries agreeing on standard schedules on tradables and the fine print on non-tariff matters will be easy to pull off. Japan’s declared interest in entering negotiations is positive, but its inclusion could also draw out the process. Its powerful farm sector could yet force the country’s enthusiastic new prime minister to reconsider if the political cost of dismantling agricultural tariffs is too high. Agriculture was a stumbling block to a Doha conclusion. Government procurement policies contrary to rules of competition are not confined to Malaysia’s preference for state-owned and “bumiputera” firms; more nations now routinely favor their own companies under the “domestic first” policy. Intellectual property protections also are not universally acknowledged or applied. These are not insurmountable difficulties. But exemptions sought or a fudging of nettlesome issues will not make for a model instrument that the TPP aspires to be.