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East Asia: TPP-11 Clears Final Hurdles

At a meeting in Tokyo on 23 January, chief negotiators from the 11 remaining members of the Trans-Pacific Partnership (TPP) announced that they had overcome outstanding disagreements from the ministerial meeting in November and that trade ministers would meet to sign a final agreement of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 8 March.

Despite the risk heading into the talks that Canada, dissatisfied with automotive rules of origin and cultural property, would opt out of the bloc, the remaining 10 countries negotiated side letters with Canada that reportedly addressed Ottawa’s outstanding concerns. Japan spearheaded negotiations for a similar side letter that addressed Vietnam’s concerns about labor dispute resolution rules. Negotiators also agreed to “freeze” – delaying the introduction of a rule pending the return of the US to the bloc – two additional provisions in addition to the 20 provisions the members had agreed to freeze in November.

Without the US, the CPTPP is a lower-impact agreement than the bloc had hoped TPP would be, but the successful conclusion of an agreement under Japan’s leadership still marks the birth of a new regional group that will vie with China to author the terms of Asian economic integration in the twenty-first century. The contrast with the Regional Comprehensive Economic Partnership (RCEP), talks for which have continued to languish, is clear, and reinforces the CPTPP’s importance, particularly since the inclusion of Canada, Mexico, Peru, and Chile gives the bloc a foothold in the Americas. Once the agreement is signed and in place, the bloc’s focus can shift to discussions about how to add new members.

For Japan, implementing the CPTPP will also strengthen its position in discussions with the US, which remains interested in bilateral free trade agreement (FTA) talks with Japan, wherein Washington is able to secure better terms of access for automobile and agricultural producers than they would have received under the original TPP agreement. Tokyo has insisted that the TPP’s provisions are its final offer, and has consciously pursued both the CPTPP and the Japan-European Union FTA in order to gain leverage over the US by extending favorable terms to US rivals. US and Japanese trade officials will hold a working-level meeting on market access on Wednesday, 24 January.