Guest Post: Is TPP dead – or not?

by | Dec 19, 2016 | Trade Working Blog


Guest post from Tracey Epps, Trade Law Consultant, Chapman Tripp.

free-thinkingTPP provides that the Agreement cannot enter into force without the US. But before we declare TPP dead, we should recall that there is no time limit to prevent the other 11 signatories from continuing to press the US to change its position.

Unfortunately, this is not without risk for New Zealand. We don’t know if or when the US might change its position, and whether in doing so it might insist on “fixes” to the Agreement. And of course, while we wait, other countries could make bilateral deals (such as Australia has already done with Japan) that give them market access advantages over us.

Another option is for the other 11 signatories to go ahead without the US. While not ideal, this would still have benefits for New Zealand exporters, especially in those countries with which we do not have FTAs. And surely, at some point in time, the US would want to join in. This option would require strong political will among the 11, which is no sure thing. Japanese Prime Minister, Shinzo Abe, has stated that TPP without the US “has no meaning” and that the fundamental balance of interests would be disturbed. This is a fair point – the entry into force provision reads the way it does because the other 11 wanted US participation. But circumstances do change, and it may be worth trying to salvage what we can, despite earlier intentions.

Assuming political will among the 11, a new agreement (TPP 2.0) would be required with, at minimum, a revised entry into force clause. Provisions specific to the US, such as its market access schedule, could either be removed or remain (although they would have no legal effect in the absence of the US).

The key uncertainty in this scenario is whether the remaining 11 would want to renegotiate the Agreement. Those that made concessions in return for access to the lucrative US market may well wish to do so. But aside from the time and resources involved, renegotiation would risk unravelling hard-fought benefits obtained, and may reduce the likelihood of the US returning to the fold.

A simpler approach could be for the 11 to agree not to enforce some of the more controversial (i.e. US –driven) provisions until such time as agreed otherwise. This could go some way towards addressing concerns about concessions made and would preserve TPP’s attractiveness to the US.

If the remaining 11 were to find the political will to move forward with TPP version 2.0, the US could, at a later stage, like any other country, submit a request to accede to the Agreement. A working group would then be formed to negotiate terms and conditions for the accession. Whether this would leave the door open for the US to tweak the Agreement would remain to be seen.

This is an abridged version of an op ed that appeared in the print edition of the National Business Review on 9 December 2016.


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