Newspapers reported widely over the weekend the progress made by the 11 remaining members of the transpacific partnership agreement. For some, it is being interpreted as a rebuke of newfound US protectionism.
I’m not so sure. for one, although disagreements have perhaps been aggravated the United States abandoning the accord, those disagreements like, some extent preferences by negotiating countries to protect sensitive areas of their economies. According to Politico, there are, for example, four issues that still need to be resolved before the CPTPP can be signed each involve a different country: an issue on state-owned enterprises related to Malaysia; a commitment on coal affecting Brunei; a dispute settlement provision involving trade sanctions connected with Vietnam; and a cultural exception issue related to Canada.
Moreover, one of the primary obstacles entails the resistance by Justin Trudeau sign on to the accord during the APEC summit. According to one Canadian news outlet,
While some countries might be eager for a deal, notably Australia, New Zealand and Japan — their respective national news outlets quoted government sources expressing disappointment at Trudeau supposedly “sabotaging” a final agreement by being a no-show — Trudeau said they should never have expected to leave Vietnam with an agreement in hand.
“I wasn’t going to be rushed into a deal that was not yet in the best interest of Canadians. That is what I’ve been saying at least for a week, and I’ve been saying it around TPP12 for years now and that position continues to hold,” he said of the original trade pact that was negotiated under the former Conservative government.
What issues did he have in mind? More than one might have guessed:
Trudeau said there is still much “important work to be done,” namely on the creation of a gender rights chapter, [and] changes around rules of origin — a part of the deal with particular salience to the auto parts sector.
Some of these issues—including stricter rules of origin and the protection of national culture—would probably, perhaps ironically, resonate with Mr. Trump. A gender rights chapter, probably not. PIn any event, as in NAFTA, the negotiations could last a while:
On the issue of autos, Canada faces a particular challenge. Under the original TPP, in order for a car to enter Canada tariff-free, 45 per cent of it must have originated in a TPP member nation (auto parts themselves must have a regional content value of 35 to 45 per cent).
These numbers are a reduction from the 62.5 per cent regional value content called for in NAFTA.