US renegotiation of TPP “on the table” as signing date confirmed

The US is discussing the prospect of rejoining the Trans-Pacific Partnership, Treasury Secretary Steve Mnuchin has revealed.

“I’ve met with several of my counterparties and other people, and we’ve begun to have very high-level conversations about TPP,” he said, adding that a possible renegotiation is “on the table,” the Straits Times reports.

The comments followed on the confirmation that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will finally be signed by the 11 current members in Chile on 8 March.

There were many who believed that the TPP was dead following the withdrawal of the US early last year. As described by Brookings Institution, “[t]he TPP was a carefully calibrated package, with TPP members agreeing to many politically sensitive concessions with the calculus that they would be compensated by improved access to the vast American market”. In November 2016,  Prime Minister of Japan Shinzo Abe said that the TPP was “meaningless” without the US, given the loss of a big market for Japan’s automakers.

In a surprise departure from its previous position, Abe’s government has pushed for the revival of the TPP. A key element in Japan’s rethink has been geopolitical concerns, with Japan aiming to set high legal standards for trade in the Asia-Pacific in the absence of the US, and as part of a broader strategic agenda that seeks to maintain a rules-based order in the region. Japan’s Economy Minister Toshimitsu Motegi has described the agreement as an “engine to overcome protectionism” in parts of the world.

Governments have been quick to tout the economic benefits of the CPTPP, which will reduce tariffs in economies that together amount to more than 13% of the global GDP. With the US, it would have represented 40%. President Trump has not ruled out rejoining the agreement, noting in Davos that he would reconsider it if the US could strike a “substantially better” agreement.

The 11 countries set to sign the CPTPP on 8 March are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.