TPP Ratification Unlikely Under Trump, Singapore Unhappy

In the article Singapore disappointed TPP is unlikely to be passed under Donald Trump: PM Lee, the author seeks to examine Singapore’s stance on the TPP given that Donald Trump is now the president elect in the United States.  As I’ve written before, the US is the pivotal player in the TPP deal.  If the US does not ratify the TPP, it is highly unlikely the deal will be ratified in other countries, including Singapore.  Singapore has been a stark supporter of the TPP, and it’s not surprising that with the prospect of the TPP fading, Singapore has voiced public disappointment.

As another indication that the world was watching the US election, Singapore’s Prime Minister Lee indicated he was well aware of Donald Trump’s stance on the TPP.  Lee’s exact word were that Trump “had no sympathy for the TPP at all.”  Singapore’s main reason for its pro-TPP stance is that it would to enjoy lower tariff and non-tariff barriers for both goods and services, but Singapore is also a very small player in the grand TPP scheme.  The TPP accounts for 40% of global trade amongst its participating countries.  PM Lee has also noted previously that not ratifying the TPP would make the US lose credibility with countries around the world.

Moving forward, it looks like Singapore’s stance on the TPP is all or nothing.  When PM Lee was asked if the deal could be amended to add new countries like Russia or China, he responded that the deal would be a completely new animal.  He called such a deal a “new exercise,” a strong indication that the deal as it is right now is the only way Singapore would like to see the deal ratified.  As President elect Trump begins to enact his policy, the world will be watching with interest to see how deals such as the TPP created under the Obama administration will be handled.  If Trump does keep any of his campaign promises, it will not be surprising if the TPP is completely scrapped.

 

What countries will be involved if a new TPP style deal is crafted?

Will there be significant global fallout if the TPP is not ratified in the US?

How much consideration should Trump give to smaller countries like Singapore as compared to the larger countries not in the agreement such as Russia and China?

http://www.straitstimes.com/asia/se-asia/singapore-disappointed-tpp-is-unlikely-to-be-passed-under-donald-trump-pm-lee

 

Tuft’s Study Predicts Negative Effects of TPP For Canada

 

In the article TPP’s Economic Impact Will Be Fewer Jobs, More Inequality, New Study Says, the author seeks to examine a study released at the beginning of this year regarding the TPP.  Interestingly, the study actually predicts a shrinking of the US and Japanese economies ten years after the TPP would come into being and a very modest growth in the Canadian economy.  Overall, the study claims that job losses will occur due to the TPP due to shifting production to goods for exportation as well increased competition.

The TTP would encompass 40% of the world’s economy so it’s not surprising that competition could get very fierce given new areas of trade for many of the countries involved.  The study conducted by Tufts’ Global Development and Environment Institute predicts that Canada’s economy would grow 0.28% as opposed to not being part of the TPP.  This 0.28% equivocates to only $5 billion dollars.  Interestingly, the Tuft’s research contradicts some early research that states there would be bigger benefits to employment and economic growth.  One contradictory study from the Fraser institute has the net benefits being at $9.9 billion for Canada, basically double what the Tuft’s research shows.

One finding the Tufts research that many have argued as a downside to the TPP is the loss of jobs and income inequality created by the TPP.  The amount of income flowing to business owners and shareholders would increase, relatively, while the amount of income flowing to wage earners would shrink, the Tufts study predicts.  A negative impact to income distribution scares many in Canada.  The exact numbers used are a reduction of the labor’s share of the GDP of 0.86%.  It’s important to note that Canada already more unequal than the US when it comes to the labor’s share of the GDP.  It will be interesting to see how Canada interprets conflicting studies about how the TPP will affect it’s economy in the future.

 

The Tuft’s study appears to confirm the fears of everyday citizens in countries that are included in the TPP, do you believe this study is valid?

If Canada does not ratify the TPP, could the results be worse than ratifying it?

If the TPP is scrapped, do you believe a new trade agreement will have to be crafted in its place?

http://www.huffingtonpost.ca/2016/01/20/tpp-economic-impact-canada-us_n_9029892.html

Trump, Mexico, and the TPP

The article “Mexico ready to discuss NAFTA with Trump, eyes non-US TPP” discusses Mexico and their actions with respect to the TPP post the Donald Trump vote. (http://www.reuters.com/article/us-usa-election-mexico-idUSKBN1352N0?il=0) Per the article “Mexico is willing to discuss NAFTA with U.S. President-elect Donald Trump but may seek to circumvent the United States on a broader trans-Pacific deal if necessary…”. The main mission of the discussions are to “persuade Trump how beneficial NAFTA… had been for North America”, and how “… the world is not competing by country, it’s competing by region…”. While currently no date has been established, both parties are anticipating one soon. “Mexico and the United States do about half a trillion dollars in trade every year, with the balance of commerce favoring the smaller country by tens of billions of dollars”. Despite this, Mexico is the US’s second-biggest foreign goods market after Canada. How will these negotiations play out? Only time will tell.

TPP: What’s in it for Australia?

In this article we will discuss the impact of TPP on Australia.

Over the long term, Australia would probably benefit from increased productivity and access for Australian industry to parts of Asia that are currently closed to it. However, the advantages for Australian consumers are not that obvious.

SUGAR– One of the most lucrative markets that Australia wants access to is America’s sugar consumers but this may be a struggle as the US sugar lobby is very powerful.

DAIRY- The US and New Zealand all want more access to Canada’s milk market, which the government has traditionally restricted supply to thereby keeping prices high.

MEDICINE- Currently, the government sets the highest price and also subsidizes the cost of these medicines. But the US wants the market to be less regulated to benefit new medicine manufacturers.

REGIONAL COOPERATION- Members of the TPP account for nearly 40 per cent of the global GDP and Australia would benefit from being part of the regional supply chain.

Current Situation

Many of the sweeteners that Australia are hoping for, including access to America’s sugar consumers and to Canada’s dairy market, are probably unlikely to happen. This has some National MPs starting a “no sugar, no deal” campaign, which demands Australia abandon negotiations if access to new sugar markets is not included. Also, there is speculation that the US could be using the agreement as a way of limiting China’s expansion. This has triggered a rival Chinese deal, the RCEP, which excludes the US and which Australia is also involved with.

Source- http://www.news.com.au/finance/economy/the-transpacific-partnership-agreement-whats-in-it-for-australia/news-story/418aaf44c026a90a6febfc908481c838

Corruption in the TPP

If you have been following the Trans-Pacific Partnership you will know that it was signed on February 4, 2016 and is now pending ratification before taking effect. After years of negotiation, what happens now? One of the major concerns moving forward is corruption; how to avoid corruption, and how to respond if it takes place. The article “Anti-corruption Measures In The TPP Agreement” (http://www.livingstonintl.com/global-perspectives/anti-corruption-measures-in-the-tpp-agreement/ contains a great summary of the measures both past and present that will assist in this endeavor.

“Confidence in the rule of law is critical for trade and investment to flourish. Corruption, in particular, is an insidious impairment to effective commercial activity and cannot be tolerated as a cost of doing business.” To help combat this potential enemy, the TPP will employ both past and present policies. Among the past policies to be utilized are the:

  • 1977 U.S. Foreign Corrupt Practices Act (FCPA)
  • 1999 Organization for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials
  • 2003 United Nations (UN) Convention Against Corruption

To support these previously instilled practices, the entire 26th chapter of the TPP, titled “Transparency and Anti-Corruption” is dedicated to this same movement. This chapter specifically addresses topics such as:

  • Requiring the publication of laws, regulations, procedures and administrative rulings
  • Guaranteeing due process
  • Promoting rules against conflicts of interest

It is the hope that the TPP will provide benefits to all countries involved, but its success is dependent on maintain honesty and consistency among all parties involved. As stated in the article, “… the framework for anti-corruption is already in place within the TPP. When ratified and enacted, it will be up to the Parties to eliminate corruption as a trade barrier.”

If Trump has His Way, Singapore Will Lose Out if TPP Not Ratified

In the article, How Donald Trump’s views on the TPP could sink Singapore, the author examines a Trump presidency could would affect the TTP as well how the TPP, or lack thereof, will affect other countries in the Pacific, mainly China.  The TPP involves 12 countries that account for approximately 25% of global exports and 40% of world GDP, so the deal is very significant.  Furthermore, the World Bank predicts each participating countries’ GDP will climb by 1.1% by 2030 should the deal come into being.  With the ratification or dissolution of the TPP, Singapore stands to gain much or experience significant losses.

Donald Trump’s recent comments on the TPP and China may have some truth to them.  He believes China will attempt to take advantage of its position as not being part of the TPP and initiate back door trading with the countries involved, including Singapore.  China stands to lose out on $46 billion worth of investments and trade each year if the TPP is ratified.  Interestingly, China already has a free trade deal with Singapore.  That being said, Singapore stands to lose much given the fact that total trade as a percentage of GDP is over 300%.  For comparison, the number is just 28% for the US.  So the TPP not being ratified could seriously hurt Singapore’s economy.

In 2015, Singapore was China’s second favorite investment destination.  China actually has free trade deals with two-thirds of the countries in the TPP agreement.  These previously existing deals insulate China a bit should the TPP be ratified.  Unfortunately, a country like Singapore does not have these deals in place.  It’s not surprising Singapore has very publicly supported the TPP, and no matter which US presidential candidate is elected, Singapore will continue to push for ratification.  If Trump is elected, it will be interesting to see if he completely scraps the TPP as he says he will even in the face of serious objections from countries with high vested interest like Singapore.

 

Do you believe Trump is telling the truth about how he feels about the TPP?

With China not being a part of the TPP, does Trump actually have a valid point?

What will Singapore do if the TPP is not ratified?

http://sbr.com.sg/economy/commentary/how-donald-trumps-views-tpp-could-sink-singapore

Future Uncertain for TTP in Canada

In the article, Ratifying the TPP could be bad for Canada, but not ratifying it would be even worse: memo, the author examines the multiple options around the TTP as well the future of trade in Canada.  As most know, the TTP has been signed by all the countries involved, but it has yet to be ratified.  With growing sentiment against the TTP in the US, Canada, and other countries, it’s not surprising that some experts believe the agreement may never be ratified.

The previous finance minister of Canada, Joe Oliver, warned Canada in an October memo that not participating in the TTP could be disastrous.  In part, Canada needs to be part of the agreement if only for defensive measures.  If Canada were to opt out of the TTP, it would lose its ideal trade positions to the US and Mexico.  The memo noted specifically that these North American supply chains “underpin the [Canadian] economy.  On the positive side, the TTP would open the doors to trade with Asian countries, a position Canada does not hold strongly right now.

On the flip side, the TTP would dilute Canada’s great position within the NAFTA.  There would be significant competition from Asian countries.  Furthermore, the TTP could eliminate Canadian jobs and damage some sectors of the economy.  Interestingly, Nobel Prize-winning economist Joseph Stiglitz has urged Canada to abandon what he described as a “badly flawed” deal.  Suffice to say, the future of the TTP is in doubt.

 

Would the dissolution of the TTP be the best outcome for Canada?

Why hasn’t there been more sentiment in Canada about the TTP’s other provisions aside from trade?

Will Canada’s relations with Asian countries actually become worse if the TTP is not signed?

http://globalnews.ca/news/2627088/ratifying-the-tpp-could-be-bad-for-canada-but-not-ratifying-it-would-be-even-worse-memo/