TPP: Y’all Come?

“TPP is not something that one gets invited to. It’s something that one aspires to.”

That was the quote from Michael Froman, President Obama’s deputy national security adviser for international economic affairs, in reaction to China’s assertion that it would want to join the Trans-Pacific Partnership negotiations but had not received an invitation.

That has got to be one of the great trade policy zingers of all time. Seriously, it simultaneously positions the nine countries currently negotiating the TPP – the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam – as places where trade policy has reached a certain level of excellence, while calling out those who aren’t involved to do some serious navel-gazing about their own state of affairs. If the APEC Summit had been taking place on a basketball court at the time (instead of a hotel in Hawaii), somewhat would have probably yelled “Oh, snap!”

But, Froman’s statement actually begs the question as to who else should consider themselves “successfully aspired” to join TPP. In fact, the US Trade Representative’s office is now accepting public comment on whether Canada, Japan and Mexico should be welcomed into the fold. And when a question gets begged, the WCIT State of Trade blog is there to respond.

To refresh your memories, TPP is an Asia-Pacific regional trade agreement currently being negotiated, the broad outlines of which were recently announced at the APEC Summit. We here in Washington care because 64% of Washington exports went to Asia-Pacific countries in 2009 (not even including all the services exports we’re doing there), while our state’s major retailers and manufacturers source a significant portion of their global supply chain from the Asia-Pacific region. So, this could be a pretty big deal for us, if successful.

Now, we might not even be having this conversation if the WTO Doha Round was proceeding, right? Everyone always says that they prefer to work on trade liberalization on the global level, so that they don’t have to go around negotiating bilateral trade agreements. But WTO Doha negotiations haven’t been moving, and so country-to-country agreements (like KORUS) and regional agreements like TPP start to take shape. I actually see Japan, Canada and Mexico’s interest as a sign of unrequited Doha desires that are being sublimated into TPP (wow, that sentence came out way more Freudian than I intended).

So, the more the merrier…or not? Certainly, there’s the fact that the nine TPP countries are deep into negotiations already; would new negotiating partners be allowed to open up already settled issues, or would they only be allowed to join if they accept everthing that’s been agreed to to-date?

And then there’s the question of whether Canada, Japan and Mexico are the right additions. If you take Japan as an example, there are plenty of trade concerns about restrictions on U.S. beef imports and access to the Japanese automotive market. But are those concerns deal-breakers?

On the positive side, though, it’s easy to see why including these three large US trading partners – and top Washington state trade markets – would be beneficial, and would make the TPP regional agreement even more worthwhile and powerful. As folks working on TPP have always said, the ultimate goal for this agreement is to be a framework into which the entire Asia-Pacific region can eventually enter; the nine current negotiating partners are more a “coalition of the willing” than “the only ones who people think should be in TPP right now.” In particular, if (to continue using it as an example) Japan was compelled to open up its markets in order to gain TPP access, then it’s a win-win.

Here at the Washington Council on International Trade, we usually have decisive answers on the pressing trade policy issues of the day, but today’s conclusion is “let’s wait and see.” We need to know what Canada, Mexico and Japan would be willing to do to join the negotiations and what they’d be willing to accept in terms of already negotiated language. But the fact that these countries are “aspiring” to be in TPP at all presents an exciting opportunity to build new trade opportunities for our state.

Stay tuned to the State of Trade blog for the latest TPP updates and analysis. And, of course, a running list of the best trade policy zingers…oh snap, indeed.

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