By its nature, the digital economy shows scant regard for international borders. Barriers are easy to circumvent or are prohibitively difficult to enforce. International rules on digital trade often receive little attention, especially compared to some traditional areas of strong focus such as agriculture, textiles and automobiles. Trade agreements are starting to address digital issues. So how does the TPP compare to existing trade agreements in Asia? The TPP goes further than others in both breadth and depth, and could have a transformative effect on economies across the Asia Pacific, as our new report and this Talking Trade post highlight.
The US Coalition for TPP Diplomatic Working Group has just released a very helpful newsletter that provides updates on the ratification processes in each of the 12 TPP member countries. This document is available here as a PDF.
That is the simple part. Simple, but crucial—and yet a narrative that is often not explained sufficiently by politicians when discussing trade agreements. Trade agreements are about access to products, yes; but they are also about the prices of those products for consumers, and the kinds of products and services available to consumers that may be affected by in future.
The Brexit debate has given rise to many bewildered discussions about the apparent difficulties of negotiating trade agreements. After all, as at least one commentator said, if we can put a man on the moon, surely the UK can negotiate a few trade agreements? Of course. Compared to putting a person on the moon, many things seem easy. But the complexity of negotiating trade is not to be underestimated either. To illustrate why this is so challenging, just consider the following example of orange juice.
So what happens if the Trans-Pacific Partnership (TPP) trade agreement is not approved by the United States Congress? In short, the TPP as it currently stands dies. The damage to US interests is much greater than simply the loss of years of work putting together a complex agreement with a network of committed partners spanning the Pacific. The United States will lose credibility and forfeit global leadership in designing future trade and economic arrangements.
Firms cannot assume that government policies will remain benign. Companies cannot keep their heads down, their “powder dry,” or hope that some other organization will do the important work of ensuring that policy and regulatory frameworks stay supportive. Conditions can literally change overnight.