Last week saw representatives of 11 countries meet in Japan for talks on breathing new life into the stalled Trans-Pacific Partnership (TPP) agreement.
The three-day meeting cemented Tokyo’s leading role in the revival of the TPP following the withdrawal of the US in January.
The talks provided further clarity on the views of countries and the probability of implementation of the TPP, but stopped short of reaching any major breakthrough.
On Thursday, the 11 states agreed to lower the strict threshold for the TPP coming into force. The original document had to be ratified by six countries, accounting for at least 85% of the total gross domestic product (GDP) of the original 12 signatories – an impossible task without the US.
However, progress on the terms of the final agreement will be much slower. Tokyo is against reopening the deal, while Vietnam and Malaysia are considering renegotiating terms.
Given the reported differences between the 11 countries, the highly ambitious timeline for implementation will be difficult to achieve. The Japanese government is hoping to finalise negotiations and see the TPP come into force by November.
If successfully implemented, the TPP would benefit businesses operating across the region, even without tariff-free access to the US market. A recent study, published by a Canadian think tank based in Calgary, estimates the trade pact could still boost intra-regional exports by over 2.4%.
A Japan-led TPP would be a significant victory for Tokyo in a time of increasingly dynamic geopolitical rivalry with Beijing, in which the ability to shape regional trade architecture plays a key role.
The deal would dilute the significance of the China-led Regional Economic Partnership Agreement (RCEP). Although its 16 participating countries hope to finalise the RCEP by the end of 2017, talks will likely continue into next year amid disagreements on tariffs and trade in services.