As Bloomberg reported yesterday, rising trade tensions have made it more imperative than ever that companies remain engaged in crafting sensible trade and regulatory policies. Getting that job done, however, is unusually challenging in Asia. While there are many excellent organizations at different levels in the region—within some individual countries, across ASEAN and within APEC—what has been lacking is an institutional framework to collectively gather business input from Asia as a whole. Hence the need for a new grouping—the Asia Business Trade Association (ABTA). ABTA is a non-profit society, registered out of Singapore, to unite large and small firms from all across Asia in crafting a collective voice for companies on trade and regulatory issues.
TPP11 Negotiations Concluded: Time for Business to Get Ready
The 11 members of the Trans-Pacific Partnership (TPP) wrapped up the final negotiations on the trade agreement this week in Tokyo. The TPP11 or Comprehensive and Progressive TPP (CPTPP) is set for formal signature on March 8 in Chile. Most businesses will not be prepared. Many firms expected the agreement to fade away. Hence, few have made contingency plans for implementation. Now, the clock is ticking before the agreement takes effect starting in late 2018 or early 2019. Nearly all of TPP11 begins on the very first day (entry into force or EIF), including all market opening for services, investment, most changes in customs procedures, the majority of tariff cuts and more. Most of TPP11 is identical to what was negotiated originally. The majority of the deal remains intact.
Trump Acts Against China
While USTR officially has a year to make a determination in the pending Section 301 investigation into Chinese intellectual property theft and forced technology transfer, this deadline is likely to be moved up significantly. USTR will probably rule that American firms have been harmed by Chinese actions and that these injuries require remedies. Damages could involve significant tariffs, calculated by considering harm caused cumulatively over the past decade. President Trump’s State of the Union address on January 30, provides the perfect opportunity to highlight the evolving trade agenda and note recent or upcoming actions, particularly vis-à-vis China.
Unnecessary Alarm: India’s Farmers, RCEP and ASEAN
For example, while Indian agriculture is frequently asserted to have suffered in the wake of the ASEAN agreement, a quick glance at the tariff schedules for India under the deal shows clearly that most key items, including apples, were placed on the exclusion list (EL). This means that the ASEAN-India (AIFTA) agreement made no changes to existing tariffs. The 50% tariff on apples into India from 9 ASEAN member states still exists—even after full implementation of AIFTA. Philippines has a separate tariff schedule with India in AIFTA and apples are also on the EL. Apple exports from ASEAN to India may have grown in the wake of AIFTA, but it was not as a direct result of any changes to tariff levels in the agreement. Hence AIFTA cannot be blamed as a cause of competitiveness problems in India’s apple orchards.
Joining the TPP: A Path Forward for the UK?
The Financial Times has reported that the UK’s Department of International Trade has begun circulating a proposal for the UK to join the Trans-Pacific Partnership (TPP) trade agreement. There are at least four issues to be addressed: 1) Why would the UK want to join the TPP? 2) Does the TPP even allow the UK to join in the first place? 3) Why would the TPP members want the UK? 4) Is it possible to make a deal happen and when?