Members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Commission met in Tokyo in mid-January where members affirmed their support of trade liberalization, fair trade, and fostering economic growth.
The first meeting of the 11 member states approved four positions: the commission’s operation mechanism, the process for admission of new members; the process of the arbitral tribunal related to state-to-state settlement of disputes; and a code of conduct for arbitrators related to the settlement of disputes between an investor and a state.
“Our door is open for countries and regions that share our vision and are ready to accept the high-standard rules” of the CPTPP, said Japanese Prime Minister Shinzo Abe said at the meeting in Tokyo.
Abe’s words could be interpreted as a slight to the United States, which held a leadership role in the CPTPP’s predecessor the Trans-Pacific Partnership (TPP) under U.S. President Barack Obama. The united states pulled out talks for the TPP under President Donald Trump who called the deal “the greatest danger” yet to the American economy. Trump is said to favour bilateral trade deals rather than multilateral deals.
But what does this mean for the U.S. economy? By pulling itself out of a trade deal that covers 14% of the world’s GDP, America has limited its marketability in Asian markets and walked away from measures it wanted in the agreement to protect its industries.
Beyond just lowering trade barriers between the countries, the deal also included greater protection of intellectual property rights—a part of the deal the US fought for in order to protect its technology, copyrights, and the pharmaceutical industry.
By pulling out of the TPP, the United states also pulled itself out of a deal that would have seen American farmers gain entry into such markets as Japan and Singapore with their beef and pork products. Instead, countries like Canada will be able to sell their agricultural goods into these markets duty free, which will increase profits.
It’s estimated that had the U.S. signed the TPP deal, it would have increased the country’s income by $130 billion, instead it is estimated to lose $2 billion as U.S. exports will be less competitive in CPTPP nations.
Koichi Ishikawa, a professor from the Institute of Asian Studies at Asia University noted the CPTPP would increase foreign trade for the 11 members by 11.5% while foreign investment would rise by 3.5% by 2030.
The total gross domestic product (GDP) of the CPTPP countries exceeds US$10 trillion, nearly equal to China’s GDP, while import turnover is estimated at $2.33 trillion, surpassing both China and ASEAN’s figures.
The deal also had provisions to increase minimum labor standards for workers in CPTPP countries.