Like the fabled phoenix rising from the ashes, a revised TPP, the ‘Comprehensive and Progressive Agreement for a Trans-Pacific Partnership’ (CPTPP), emerged at the eleventh hour from high-level meetings in Da Nang, Viet Nam.
The process was not without a number of nerve-wracking last-minute hitches, but this should not have been too surprising: since US withdrawal, negotiators had already spent considerable time revisiting the text, focusing in particular on sensitive issues that had been included primarily at US instigation.
Ultimately, the outcome preserved the most valuable elements of the original TPP while also successfully dealing with the more contentious provisions. A number relating to intellectual property (copyright, patents, medicines) have been suspended. New Zealand also succeeded in achieving a further narrowing of the parameters for investor-state dispute settlement (including in relation to specific contracts between governments and investors), the right to restrict the purchase of residential property by overseas tax residents and removal of new administrative measures for Pharmac. The right of governments to regulate in the public interest, including in relation to public health and the environment, and in New Zealand’s case, obligations in relation to the Treaty of Waitangi, have been fully retained and protected. These are all notable achievements. New sections have also been included on entry into force (a simple head-count of six parties having ratified is now all that is required to trigger this), and on withdrawal and accession by new members.
The “core elements” of the CPTPP have now been concluded by TPP-11 Leaders. A small handful of technical issues remain to be resolved, but, while further back-sliding cannot be completely ruled out, it seems hopeful that the final details can be tidied away in the next couple of months. Once finalised and signed, the new agreement will go back to Parliament (including a select committee process) before the Government commits to ratification.
The negotiations on the CPTPP took place in the margins of the annual APEC Leaders’ meeting. One of the major issues discussed by Leaders there, and separately in the preceding APEC Business Advisory Council meeting attended by three New Zealand members (see our guest blog here), was how to help globalisation work better: trade liberalisation has without doubt generated huge economic benefits and improvements in living standards in the region, but more needs to be done to ensure that growth is inclusive, sustainable and does not leave people behind.
While “comprehensive and progressive” doesn’t trip off the tongue quite as neatly as “TPP”, the new name reflects the importance attached to these elements by New Zealand and the other Parties. CPTPP upholds enforceable labour and environmental standards, addresses fishing subsidies and includes provisions designed to ensure that the benefits of trade liberalisation can be more widely shared.
More broadly, the agreement will enable modern models of business, including global value chains, services trade, the digital economy and cross-border investment, to operate much more seamlessly and with fewer corrosive non-tariff barriers around the Asia-Pacific region. It opens up opportunities for small businesses as well as large, with dedicated provisions designed to help SMEs to participate more successfully in trade.
For New Zealand exporters (and ultimately, households), there will be tangible market access benefits in key markets, especially Japan, Mexico and Canada, not least by ensuring that they maintain a level playing field in the face of competitors’ preferential trade deals and thanks to the removal of red tape and other obstacles. The CPTPP also means that we have had a hand in setting the future trade rules for the most dynamic region in the global economy. Just as importantly, however, the value of getting the new-look TPP across the line, just like the rebirth of the mythological bird, lies at least as much in the renewed commitment of a significant bloc of countries to ongoing trade liberalisation when enthusiasm for such efforts has otherwise been in pretty short supply.
This blog post was prepared by Stephanie Honey, an Associate Director of the NZIBF.
Please see the following links for additional resources that may be of interest:
The statement on CPTPP from the Minister for Trade and Export Growth.
The Ministerial Statement from the 11 CPTPP Ministers from Da Nang on the core elements of the CPTPP.
The list of CPTPP suspended provisions from the original TPP agreement.