The current “spaghetti bowl of bilateral trade deals” across the region fails to address issues faced by multinational businesses, such as compliance with multi-jurisdictional supply chain regulations and intellectual property rights behind borders, he explained.
A TPP deal is widely expected to address those issues in addition to providing duty-free access for nearly all goods, opening up services and investment and ensuring cross-border data flows.
“All of these upsides to the TPP apply with or without the U.S., so it is not surprising that the remaining members are looking to move forward even without U.S. participation,” Okun said.
On the sidelines of last week’s meeting of chief negotiators, Japan’s Kazuyoshi Umemoto said members had decided to embrace a new framework to take into account Washington’s absence. More discussions were needed on whether to revise trade and investment rules from the original pact, he added.
The 11 chief negotiators are now expected to meet again in August or September, Japanese media reported.
“There is a considerable international backlash against globalization and free trade, evident from the U.S. decision to withdraw from the TPP, so Asia-Pacific governments are giving a high priority to making progress with trade liberalization through a number of initiatives, including TPP-11 and the Regional Comprehensive Economic Partnership,” said Rajiv Biswas, Asia Pacific chief economist at IHS Markit.