Following President Trump’s withdrawal from the US-led Trans-Pacific Partnership (TPP), competition has re-emerged over the future of Asia’s trade architecture, pitting a reformulated TPP-11 against the Regional Comprehensive Economic Partnership (RCEP) favoured by China. Although the protectionist trade policy instincts of the Trump administration make US involvement in these agreements unlikely in the short term, there is a strong economic case for Washington to remain a key player in Asia’s regional trade system, according to a new research brief from the United States Studies Centre.
Written by Perth USAsia Centre research fellow Dr Jeffrey Wilson, this brief looks at the competing designs of the TPP-11 and RCEP, and recommends Australia adopt a forward-looking position which seeks regional arrangements that are as open as possible, both for the United States and all other Asian countries.
"For the first time in more than two decades, the United States is absent from the trade negotiation table in Asia, and facing exclusion from the largest and most dynamic region of the world economy at the precise time that regional trade architecture is being redesigned," Wilson says.
"As the TPP-11 and RCEP continue to advance, Australian negotiators face the challenging task of balancing national trade interests against the compromises required by partners."
- The RCEP may now have the upper hand over the so-called TPP-11, which is being championed by Australia and Japan.
- Both initiatives seek to multilateralise Asia's free trade agreements. But while the RCEP is narrowly focused on lowering tariffs; the TPP-11 seeks to preserve the TPP’s original ambition to establish high-standard regulations on investment, services, environment, digital economy, and intellectual property.
- Given the US absence in both sets of negotiations, Australia should ensure that any regional trade architecture it joins can accommodate Washington’s future involvement and eventually allow for higher standards.
T 02 9114 2622