Trump threw the Trans-Pacific Partnership into chaos. Now Canada is holding out, Japan is worried, and China may profit

‘If the TPP stays in limbo, other Asian countries may start bending towards China’


South China Morning Post (Hong Kong)

27 December, 2017


Kyodo -- Against all odds, Japan managed in 2017 to keep the Trans-Pacific Partnership alive after the withdrawal of the United States, which would have been the biggest economy in the framework.


Tokyo has convinced 10 nations to commit to joining the pact.


But Japanese Prime Minister Shinzo Abe’s hopes of signing the Pacific Rim trade pact soon now shaky following Canada’s last-minute request for a revision of the treaty.


Given the uncommitted attitude by Canada toward a fast implementation of the TPP in its current form, Japan and the nine other members could go on now without Canada, analysts said.


The newest version of the beleaguered TPP, agreed on in November in Vietnam, revised the original pact so it could go into force 60 days after at least six of the 11 signatories complete domestic procedures.


“There is a possibility that Canada could opt out of the pact. But if Canada, the second-largest economy among the 11 after Japan, also withdraws from the deal, the TPP is certain to further lose its attractiveness” such as for potential newcomers like Thailand, said Toshiki Takahashi, chief economist at Institute for International Trade and Investment.


“Japan may think the remaining issues left to be resolved for the TPP implementation are rather technical but the objection by Canada cannot be overlooked when the country is in tough talks with the United States in the ongoing renegotiating for the North American Free Trade Agreement,” Takahashi said.


The issue raised by Canada over its cultural goods and services needs to be finalised before any deal is signed, while a further three items – including state-owned enterprises and dispute settlement raised by Malaysia and Vietnam, respectively – also need to be worked out.


In the central Vietnamese city of Danang in November, Canadian Prime Minister Justin Trudeau defended his country’s stance on the last-minute negotiations for the implementation of the new TPP without the United States, even as Ottawa’s unexpected objection led to the cancellation of a scheduled leaders’ summit between the 11 TPP parties to endorse and announce the agreement.


The Canadian opposition also forced Toshimitsu Motegi, Japanese minister in charge of TPP negotiations who co-chaired the ministerial meetings in Danang, to make an irregular move and reconvene a meeting with the 11 ministers for an extra day to reaffirm that they had agreed on the new TPP, which in the end included clauses that still need to be settled...