A new paradigm in Asia-Pacific Trade … ?

Wendy Cutler, vice president of the Asia Society Policy Institute and a former diplomat and negotiator in the Office of the U.S. Trade Representative, tells us what to expect from the meetings in Chile. As Acting Deputy U.S. Trade Representative, Cutler played a major role in forming TPP — particularly with the bilateral negotiations with Japan.

China said that a meeting in Chile to discuss a possible regional Pacific trade deal is not strictly about the languishing Trans-Pacific Partnership (TPP), as China tries to distance itself from one-time U.S.-led trade pact.

Representatives from 12 countries that formed TPP, plus China and South Korea, meet on Tuesday and Wednesday for the first time since U.S. President Donald Trump pulled the United States out of the TPP in January, effectively killing the accord.

What’s the context behind this meeting?

Wendy Cutler: We have a new paradigm in trade today. The U.S. has withdrawn from TPP, and said it is not interested in pursuing regional trade agreements and that it prefers bilateral trade deals. The other TPP countries will discuss where that leaves them.

How did the TPP countries react to U.S. withdrawal?

Wendy Cutler: It’s fair to say that many in Asia were surprised. They knew that there had been a lot of anti-trade sentiment expressed in the 2016 presidential campaign, but there was an expectation that when President Trump took office, he’d closely study the TPP agreement before making a decision. Few people expected he’d pull out on the third day of his presidency. The U.S. withdrawal was also surprising to countries in the Asia-Pacific region in light of the substantial economic and strategic benefits that the deal provided to the U.S.

What will the trade ministers discuss in Chile? 

Wendy Cutler: One of the issues they will talk about is doing TPP without the U.S. They will discuss the possibility of concluding TPP among themselves and perhaps inviting others to join as well. We’ll have to see how that conversation goes and who is interested in moving forward with TPP despite the U.S. exit. It would be difficult, but it is worth consideration.

Why were China and South Korea, two countries that are not part of TPP, invited?

Wendy Cutler: In Chile, the TPP countries are also expected to consider the possibility of adding new countries to the deal. As large economies in Asia, China and South Korea seem like possible candidates.

China’s special envoy for Latin America, Yin Hengmin, attended to discuss “Asia-Pacific integration and the next step for cooperation in the Asia Pacific region, and to exchange broad ideas”, foreign ministry spokeswoman Hua Chunying said.

“The meeting is not as some media have said a TPP meeting,” she said, speaking at a regular press briefing.

Chile hoped the meeting would explore options going forward, including the possibility of building on the base of pre-existing agreements, Paulina Nazal, the country’s head of international trade, told Reuters last week.

Current agreements that could be expanded include Latin America’s four-country Pacific Alliance or the proposed Regional Comprehensive Economic Partnership (RCEP), led by the Association of Southeast Asian Nations (ASEAN).


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