Last updated Thursday, December 08, 2016 9:57 am GMT+8

Tuesday November 29, 2016
9:09 AM GMT+8

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Bloomberg

Global views from columnists from international financial wire service Bloomberg.

NOVEMBER 29 — Republican and Democratic leaders in the US Congress seem willing to let the Trans-Pacific Partnership trade deal languish, and if anything’s certain about President-elect Donald Trump, he won’t push for it once in office. But even if the US isn’t smart enough to share in the benefits, the pact is worth saving. The 11 other signatories should implement it on their own.

That might not be easy, admittedly. The other governments made concessions in the talks to gain greater access to the US market. Vietnam said it would allow independent trade unions, for instance, and Japan agreed to liberalise its agricultural markets. Japan’s government seems to be hoping that Trump will change his mind before the deadline for ratifying the deal comes round in February 2018, but there’s no sign of a Plan B in case he doesn’t.

Japan and the other partners need to see that a TPP without the US is still a lot better for them than none.

A TPP-11 would establish rules and standards that would benefit its members, including protections for labour, the environment, intellectual property and digital commerce. The reforms required under the deal would make their economies more competitive and efficient — and might be hard to push through if governments don’t seize this opportunity. The members’ export industries will still gain from expanded trade; their consumers will still gain from cheaper goods.

There’d be wider benefits, too. Even without the US, the TPP would put allies such as Japan, Singapore and Australia, rather than China, at the forefront of trade liberalisation, giving other nations an alternative to which they can aspire. By deepening the integration of Asia’s economies, the pact would promote stability in a critical and volatile region.

True, the other TPP partners could choose to pursue trade liberalisation in other venues — including the China-led Regional Comprehensive Economic Partnership. But such alternatives aren’t as promising. China’s deal has limited ambitions and its prospects are in doubt; it won’t lower barriers to trade as much or as fast as even a diminished TPP. And a TPP-11, valuable in its own right, would give its members greater leverage in those and other talks.

Eventually, as the benefits of a successful mini-TPP become evident, the US might have second thoughts and come back into the fold.

Certainly the strategic logic of the larger TPP remains compelling. The best way for the US to maintain its decades of influence in the Asia-Pacific region is to integrate the world’s biggest economy with the world’s fastest-growing markets, under rules that promote rather than undermine the liberal order Washington has supported since World War II. Sooner or later, it’s likely that the US will see the wisdom of that policy — and it would be easier to participate in an existing TPP than to reopen negotiations from scratch.

The US is making a big mistake in letting this opportunity pass this year. But the error needn’t be irreversible, and it will be easier to put right if the TPP’s other members press on regardless. — Bloomberg

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