Abstract
Due to the US withdrawal from the Trans-Pacific Partnership (TPP), the remaining 11 partners entered into a new trade agreement, renamed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in January 2018. In this text we examine the reasons why the “orphans” of the TPP decided to save the agreement under a different version by first examining the two dominant explanatory models, realism and functionalism, and then proposing a complementary one that emphasizes the need for a strong legal and normative framework to promote the integration of mid-powers into trans-Pacific and even global value chains. This text also illustrates the unique leadership and activism of Japan in the negotiation process.
Highlights
Despite the US decision to withdraw from the Trans-Pacific Partnership (TPP) in January 2017, the “orphans” of the TPP, the other 11 countries that were part of the original agreement1, did not give up and quickly returned to the negotiating table to reach, one year later, a new agreement, known as the “Comprehensive and Progressive Agreement for a Transpacific Partnership” (CPTPP)
In this text we examine the reasons why the “orphans” of the TPP decided to save the agreement under a different version by first examining the two dominant explanatory models, realism and functionalism, and proposing a complementary one that emphasizes the need for a strong legal and normative framework to promote the integration of mid-powers into trans-Pacific and even global value chains
The US withdrawal should not be considered as just one of Trump’s many whimsical and erratic gestures. It is an attribute of a troublesome trajectory that the world economy is taking and it indicates that there are political forces at work within the global economy that are choosing to ignore that in production and trade today, competitiveness is no longer strictly measured on a national basis but on a global one
Summary
Despite the US decision to withdraw from the Trans-Pacific Partnership (TPP) in January 2017, the “orphans” of the TPP, the other 11 countries that were part of the original agreement, did not give up and quickly returned to the negotiating table to reach, one year later, a new agreement, known as the “Comprehensive and Progressive Agreement for a Transpacific Partnership” (CPTPP). President Obama made it clear in an interview with The Wall Street Journal: “If we do not write the rules, China will write out the rules for that region [Asia-Pacific]” and American business and American agriculture “will be shut out” (Seib, 2015) This famous statement indicates two factors in connection with our reasoning on trade agreements, on the status of the world economic order and on the difficult and quite sensitive position Japan has found itself in since the United States withdrawal. Obama’s statement indicates the possible emergence of a “parallel” international order under China’s direct influence (Stuenkel, 2016) While it is not necessarily a non-liberal order (Boyle, 2016), China possessed the commercial, financial and technological capacities and aptitudes to implement “idiosyncratic” rules—which are not “amenable to diffusion” (Solis, 2017)5—for trade in goods and services, for foreign investment or for financial cooperation, to name just a few fields in which China is active today (Heilmann et al, 2014). Our general thesis is that Japan wants to multilateralize its trade policy on rules and norms to circumscribed Chinese and American unilateralism in Asia-Pacific and to show a certain level of activism to counter the potential negative effects of a China-America trade war on global economic growth
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