TPP-11 to take effect on Dec. 30

– The 11-nation Trans-Pacific Partnership free trade agreement will come into force on Dec. 30, the pact’s secretariat New Zealand announced on Wednesday. Vietnam is expected to ratify the FTA in November.

Australia notified New Zealand on Wednesday that it has ratified the agreement. Mexico, Japan, Singapore, New Zealand and Canada had already completed the procedures. Vietnam’s parliament is expected to approve the deal by mid-November.

Once the trade pact comes into force, a TPP committee of ministerial-level officials from member states will meet and decide on needed steps for countries hoping to join, such as Thailand and the U.K.

Japan took the lead in TPP after the U.S. pulled out.

Japan’s view is that multilateral talks, which Washington has abandoned, are the best way to address trade issues. Tokyo wants to avoid a bilateral free-trade agreement – which Lighthizer called for in the past – where it could come under pressure over access to its auto and agricultural markets.

U.S.-Japan talks in Aug 2018 between USTR Lighthizer and Japan’s Minister of Economic Revitalization Toshimitsu Motegi launched a round of what the two sides call “free, fair and reciprocal” trade negotiations. They fall within broader bilateral economic discussions led by Vice President Mike Pence and Deputy Prime Minister Tareo Aso.

USTR Robert Lighthizer is the man leading Donald Trump’s trade offensive on China.

Trump might look like he’s flailing on trade—but it’s all going according to Lighthizer’s plan, which has been years in the making.

The veteran international trade lawyer is known to share several traits with the US president, not least of all his skepticism of free trade, his belief that the US has been treated unfairly in trade agreements, and his belligerence.

As a decades-long denizen of Washington, Lighthizer is more grounded but also less easy to place politically. Lighthizer’s is the economic philosophy most responsible for guiding the Trump administration, and he has ensured its influence for years, perhaps decades, to come.

Lighthizer speaks openly in favor of free trade, comparative advantage, and what he calls simply “economics.” “The basic philosophy that we have is that we want free trade without barriers,” Lighthizer explained to Congress at the July 26 hearing. He said that the Trump administration “wants to get to the position where the U.S. is competing with countries on a bilateral basis and on a no-barrier basis, and then let the United States, let pure economics make the decision.”

Where Lighthizerism departs from standard free trade philosophy isn’t in its desired goals of open markets but in its commitment to using an openly politicized arsenal of weapons for achieving them. Since the formation of the General Agreement on Tariffs and Trade—the precursor to the World Trade Organization—in 1947, the dominant school of thought on international trade has favored multilateralism, or agreements between many nations where trade barriers sink collectively on the “most favored nation” principle. Lighthizerism scorns the multilateral approach in favor of bilateralism, or deals between two nations to lower barriers. Against the collective approach exemplified by the WTO agreement, which over 100 countries signed in Marrakech in 1994, he promotes a transactional one instead, proceeding deal by deal and case by case. “We’re not talking about a level playing field,” he said to Congress, “What we’re saying to the country is, ‘We’ll give you better access than the rest of the world, and you give us approximately an equal amount of better access.’”

The trade conflicts of the 1980s served as the crucible in which Lighthizerism was formed. Lighthizer’s career in economic policy began during this period, when U.S. policymakers routinely complained of trade deficits and the undercutting of U.S. manufacturing by distant competitors, and figures such as Vice President Walter Mondale predicted a dark future of Americans left only to “sweep up around the Japanese computers.” A native of Ohio born in 1947 who attended Georgetown University at the same time as eventual President Bill Clinton, Lighthizer served as a chief counsel for the U.S. Senate Finance Committee under Sen. Bob Dole beginning in 1978 before being appointed a deputy U.S. trade representative in 1983, when he was in his mid-30s. He served as chair of the U.S.-Japan Investment Committee and helped lead negotiations over steel imports with Japan.

Lighthizer chided U.S. policymakers for assuming that “acceding to the WTO would cause China to become more and more Western in its behavior—almost as if it were merely a more exotic version of Canada.” The obstacle Lighthizer perceived was a cultural one. “China’s inability to comply [with WTO commitments],” he concluded, “appears to be the result of deep forces in Chinese life.”

Sources:

https://asia.nikkei.com/Politics/International-Relations/TPP-11-to-take-effect-on-Dec.-30

https://www.reuters.com/article/us-usa-trade-japan/japan-holds-out-for-multilateral-trade-approach-with-us-in-new-talks-idUSKBN1KV00L

You Live in Robert Lighthizer’s World Now

 

About the author  ⁄ AmCham Vietnam

AmCham is an independent association of companies with the objective of promoting trade and investment between Vietnam and the U.S. With two chapters, one in Ho Chi Minh City and one in Hanoi, our membership of 700 companies and 1,500 representatives is unified by a commitment to promote trade and investment between Vietnam and the United States.

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