Exactly one year to the day United States President Donald Trump withdrew his country from an ambitious Pacific Rim trade deal, the remaining 11 countries – including Singapore – agreed to move ahead on a revised version of the pact.
They settled their remaining differences over the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), dubbed TPP-11, after two days of talks in Tokyo that ended yesterday (Jan 23).
The nations had reached a broad agreement last November, save for four unresolved issues. But these were ironed out, paving the way for the deal to be inked by early March .
Japanese public broadcaster NHK reported March 8 as the date being mooted for the signing ceremony, to be held in Chile.
Singapore’s Minister for Trade and Industry (Trade) Lim Hng Kiang said on Tuesday: “Singapore is pleased by the good outcome on the CPTPP.
“We have made significant efforts to uphold the spirit and substance of the original agreement, while maintaining its high ambition and overall balance.”
Singapore companies will stand to gain, he said, from a substantial elimination of tariffs and non-tariff barriers for goods, improved access for service suppliers, greater facilitation of investments, and improved access to government procurement contracts.
The victory for trade liberalisation came a day after Mr Trump slapped hefty tariffs on imported washing machines and solar panels. China and South Korea lodged protests with the World Trade Organisation yesterday (Jan 23) over the protectionist measure.
The TPP-11, even without the US, will give Singapore companies access to a market of 500 million people with a combined output of US$10 trillion (S$13.2 trillion).
Japan and Singapore are joined by Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru and Vietnam as parties to the deal.
The treaty will take effect once it is ratified by at least six countries. Japan wants to do it during its current Parliament session that is slated to end in June.
The outcome, said Singapore’s trade ministry, “reaffirms the CPTPP countries’ collective commitment towards greater trade liberalisation and regional integration”.
Japan and Australia have been the flagbearers of the deal since the US’ withdrawal, with Prime Ministers Shinzo Abe and Malcolm Turnbull pledging in Tokyo last week their “personal commitment” to sign and seal the deal by March.
Under the CPTPP, 22 provisions in the original TPP will be frozen – up from 20 as agreed by negotiators last November. Most are on intellectual property, with the new clauses to do with the liberalisation of Malaysia’s state-owned enterprises and Brunei’s coal industry.
The provision on state-owned enterprises is to ensure all businesses, regardless of ownership, can compete fairly with foreign government-owned entities on quality and price and not on discriminatory regulation, subsidies or favouritism.
The other two concerns – the protection of cultural industries in Canada and a grace period for labour rights legislation in Vietnam – will be spelt out in separate letters that will be exchanged with other members at the signing. These will not be in the final CPTPP document.
Meanwhile, Singapore Prime Minister Lee Hsien Loong, speaking to reporters in Sri Lanka where he is on an official visit, urged cautious optimism despite the agreement.
“We’ll have to see how that develops because it’s politically sensitive for some countries.”