Australia - Japan pressure the US on TPP

(Baonghean) - During the recent stopover in Australia during their Asia-Pacific tour, Japanese Prime Minister Shinzo Abe and Australian Prime Minister Malcom Turnbull agreed to speed up the process of ratifying the Trans-Pacific Partnership (TPP). This move shows that the leaders of both countries are trying to "save" the agreement that is at risk of bankruptcy, as well as creating pressure so that the administration of US President Donald Trump does not turn its back on this project.

Determined to “save” TPP

During Prime Minister Abe’s first visit to Australia since Turnbull became Prime Minister last September, the economy was one of the main topics discussed by the two leaders. Most notably, the two leaders agreed to work hard to pursue the Trans-Pacific Partnership (TPP) Agreement to the end.

Specifically, Australian Prime Minister Turnbull affirmed that he will push for a vote in the country's Parliament to pass the TPP. At the same time, the two leaders will encourage the remaining countries to pass the TPP to pressure the US Congress to ratify it despite President-elect Donald Trump's objections.

To recap, the TPP involves 12 countries including the US, Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The agreement was signed by the ministers of the 12 countries in February 2016 after more than 5 years of difficult negotiations.

However, the TPP is currently in a two-year period for member countries’ parliaments to ratify it. The story has become especially difficult when US President-elect Donald Trump has repeatedly declared that he will “eliminate” the TPP immediately after taking office.

Japanese Prime Minister Shinzo Abe and Australian Prime Minister Malcom Turnbull.

The determination of the leaders of Australia and Japan is not surprising. Both Prime Minister Abe and Prime Minister Turnbull have been supportive of the TPP Agreement. Japan is arguably one of the countries that will benefit the most if the TPP is passed.

If the TPP comes into effect, Japan’s annual imports and exports will increase by 140 billion USD by 2025 and its annual GDP will increase by more than 100 billion USD. In addition, the relaxation of market entry regulations will help Japanese businesses expand their markets abroad.

More importantly, the TPP will provide a mechanism for Japan to promote reform of its current economic mechanism. Therefore, the Japanese parliament, with the encouragement of Prime Minister Abe, became the first country to pass the TPP last December.

Meanwhile, Australia, although considered one of the countries that will reap the least economic benefits from the TPP among the 12 countries, has its own calculations. A World Bank study shows that Australia could only achieve a GDP increase of less than 2% by 2030 if it joins the TPP.

However, the Australian Government believes that the country will reap long-term benefits through deep involvement in shaping the trade and business framework in the Asia-Pacific region.

Not only do they have separate interests, according to observers, as two countries with a special strategic partnership, Australia and Japan are also leading economic partners. Japan is currently Australia's second largest importer, trade partner and source of direct investment.

Once both countries open up to the global economy, they will exploit their strengths, increasing the cost of goods and services for their people. In particular, close economic cooperation is also the foundation for the two sides to further tighten the defense and security sector, creating an effective link in the context of the region facing many security challenges and risks.

10% hope for TPP?

However, these benefits of Australia and Japan are at risk of “going up in smoke” due to the “tough” statements of US President-elect Donald Trump. Mr. Trump has repeatedly declared that he will “end” the TPP immediately after taking office.

President Barack Obama has so far stopped efforts to promote the TPP through Congress, and declared that the fate of the TPP will be decided by the new government. The public is asking whether the efforts of the leaders of Australia and Japan had any impact on this decision.

In fact, many observers believe that Mr. Trump is 90% certain to carry out his statement about TPP, because it is consistent with his commitment to bring more jobs to the American people. However, the remaining 10% depends on many other factors.

First, Mr. Trump and his government must have known about the support for TPP from the remaining TPP members in recent times. These countries even proposed the possibility of moving forward with TPP without the US.

As Chilean Foreign Minister Heraldo Munoz emphasized in a statement, whether the US joins the TPP or not, the member countries are still unanimous in making the world's largest trade agreement a success. Or Malaysia also expressed the view that, if some provisions of the TPP are amended, the agreement can still continue without the presence of the US.

Meanwhile, Peruvian Trade Minister Eduardo Ferreyros has also proposed to adjust the TPP to save the TPP. It is possible that despite the consensus of the remaining members, Mr. Trump will still "discard" the TPP as committed. But this will mean that the US will lose many opportunities for economic development, more importantly, reduce its position and role in the Asia-Pacific geostrategic region.

Furthermore, while the TPP is still being negotiated, America's top rival China has been simultaneously promoting the 21-nation Free Trade Agreement of the Asia-Pacific (FTAAP) and the 16-member Regional Comprehensive Economic Partnership (RCEP), both of which do not include the United States.

Even Japanese and Australian officials are more supportive of these two agreements than TPP. Clearly, in the current context, canceling TPP and creating conditions for China to cooperate with Asia-Pacific countries is no different than Mr. Trump isolating the United States.

For such reasons, observers believe that Mr. Trump’s withdrawal from the TPP will likely be temporary. During his official tenure as the White House chief, Mr. Trump will realize the strategic benefits of the TPP and reconsider.

This has also been the desire of many TPP member countries in recent times. However, no one can be sure how things will develop. As for Mr. Trump himself, once he officially becomes President, he will need to consider all his statements and decisions to suit the national interests. Because the US President will not have many opportunities to correct his mistakes!

Khang Duy