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Über dieses Buch

The TPP was negotiated among 12 economically diverse countries, including some most highly developed and rich countries (i.e., the United States, Japan, Australia, Canada, New Zealand, and Singapore), some newly industrialized countries (i.e., Mexico and Malaysia), and some less-developed countries (i.e., Peru, Chile, and Vietnam). A new paradigm created in this context is that countries with vastly different economic developments can actually agree on a set of very high standards to regulate their economic activities, to liberalize their trade, and to protect intellectual property and foreign investment. The contents of the TPP also reflect its status of being a “new paradigm” as the “21st-Century Trade Agreement” and being a pioneer in rule making in many key regulatory areas. These include not only the improved and enhanced rules on traditional issues already covered by the WTO , such as goods, services, and IP rights, but also the carefully designed rules in areas that have never been addressed in the WTO or comprehensively covered in other FTAs , such as state-owned enterprises, electronic commerce, and labor and environmental issues. Although the United States has withdrawn from the TPP, the remaining countries are still putting efforts into establishing a TPP without the United States or a TPP with China. Economically speaking, the current 11 parties account for about 20 % of the global economy. If such agreement is put into force, there will be significant implications for the region, for the multilateral system, and even for other FTAs. The book addresses the potential of the TPP to change the ways trade and investments are conducted and argues for its potential to be the start of an international trade/economic law revolution. The book elaborates the relationship between the TPP and other existing trade agreements such as the WTO and other FTAs and explains how the TPP is to deal with traditional and new issues. Taken together, the authors argue that the implications of the TPP go beyond its current membership. It is hoped that the book will make an important contribution to the field of international economic law.



Chapter 1. Introduction: Trade Policies in the Post-TPP Era

After eight years of negotiation, 12 members of Asia-Pacific Economic Cooperation (APEC) finally concluded the negotiations on the Trans-Pacific Partnership Agreement (TPP) in Atlanta, Georgia on 5 October 2015. It was signed on 4 February 2016 in New Zealand. Although President Donald Trump has announced the withdrawal of the US from the agreement, many rules of the TPP will still survive either directly (if the treaty enters into force for the remaining group of countries) or indirectly (when the TPP or any parts of its contents is adopted as a standard or benchmark to negotiate future trade pacts).
Julien Chaisse, Henry Gao, Chang-fa Lo

The Impact of TPP on International Economic Law Rule-Making


Chapter 2. The Coherent Fragmentation of International Economic Law: Lessons from the Transpacific Partnership Agreement

Rather than just focusing on one narrow component of the TPP , this chapter takes a macro perspective. It first seeks to measure the TPP’s contribution to the IELO —whether it really does add to the field and then, critically, whether the character and components of the TPP really do undermine the IELO. In other words, whether the TPP has much to contribute to the debate about the perception that the IELO is fragmented. The chapter finds that the TPP does not really contribute much new to the IEL, for what is new in the TPP is weak, and what is strong is not new. The chapter then conclude by applying the lessons from that analysis to uncover insights about the wider issue of the fragmentation of first the international economic legal order and then the international legal order in general. The chapter finds that while there are many parts to the international economic order, at a conceptual level it remains coherent. This may be styled coherent fragmentation. Extrapolating it is possible to then consider the wider international legal order similarly fragmented in a coherent manner.
Colin B. Picker

Chapter 3. On Creating Negotiation Rounds Similar to Multilateral Regimes for the TPP for Its Further Improvement

Although the concept of “negotiation rounds” is generally used in the context of the WTO and the previous GATT, it does not mean that FTAs should not be subject to negotiation rounds. This chapter is to argue that plurilateral FTAs need a kind of periodical trade negotiation rounds similar to the multilateral trading system of the WTO. The chapter explains that even in the TPP, its market access commitments still need to be improved. Its rules still need to be revised or even new rules to be added through periodical rounds of negotiations. There are already some provisions in the TPP which can serve as the basis of some kind of negotiation rounds. The chapter will argue that these provisions are not sufficient to accommodate such negotiation rounds. It suggests certain elements to be included to accommodate such need. They include the decentralization of negotiations to allow TPP Parties to engage in bilateral request-offer negotiation and then to plurelateralize the result; and the improvement of the institutional arrangement so that there will be a specific committee responsible for the negotiations and some working groups responsible for specific sectors or specific issues.
Chang-fa Lo

Chapter 4. TPP Trade Remedy System: Development or Divergence from the WTO?

The model adopted in the TPP sets forth an important precedent in the subsequent FTA negotiation. This study reviews the main features of the TPP trade remedy chapter and analyzes the implications compared to legal developments in trade remedy rules incorporated in other FTAs involving TPP members. Among many interesting features, it is noted that the TPP abandons a controversial selective safeguard system incorporated in its FTAs since the NAFTA. It becomes a more imminent task to enhance harmonization of trade remedy procedures as well as practices. Mega FTA negotiations in the future should accelerate the regulatory coherence in broader aspects of the global trading system.
Dukgeun Ahn, Ji Yeong Yoo

Chapter 5. Rules of Origin in the Trans-Pacific Partnership

Rules of Origin (ROOs) , are an essential component in the negotiations on trade in goods. Rules of Origin in Free Trade Agreements (FTAs) determine products that are eligible for preferential tariff treatment. This paper examines the key elements of ROOs in the TPP and evaluates whether these rules will facilitate trade among the partners linking both sides of the Pacific. It explores the key concepts and criteria required in conferring origins to goods that will make a difference to whether these rules will contribute to making the TPP a 21st Century high-quality Agreement. The outcome of the negotiations on ROOs in the TPP is positive. The ROOs in the TPP are generally quite liberal. TPP members have agreed on a common set of rules of origin to determine whether a product originates in the TPP region. They have also agreed that TPP rules are to be objective, transparent and predictable.
Margaret Liang

Chapter 6. Dispute Settlement in the TPP and the WTO: Which Way Will Asian TPP Members Turn?

Assuming that the TPP will eventually enter into force with its current dispute settlement architecture intact, the Agreement will increase the dispute settlement options for its members, with most having a range of multilateral, bilateral, and regional dispute mechanisms at their disposal in any given dispute. However, where a choice of forum exists, a number of considerations arise for a complaining member, including legal and political dimensions. This Chapter examines the dispute resolution provisions contained in the TPP, evaluating the extent to which they represent change and innovation for the TPP’s membership, and then considers the impact of the TPP on the dispute settlement architecture already available in the Asian region. While it is clear that there are a number of features that will enhance the efficacy of the dispute settlement process for, other features may make the TPP’s mechanisms less attractive forum, particularly for the Asian Members of the TPP. Thus, this chapter argues, where a choice of forum exists, complainant members are likely to continue to use the WTO dispute settlement system in at least the near future.
Lisa Toohey

Chapter 7. Friends with Benefits? Amicus Curiae in the TPP Investor-State Dispute Settlement Mechanism

Amici curiae are individuals or organisations who do not have the right to participate in the dispute as parties but want to intervene because the outcome of the proceedings may affect their interests. The participation of amici in investor-state arbitration has been justified as a useful tool to pursue different interests, inter alia, the promotion of greater transparency, accountability, and openness of this dispute settlement mechanism. However, opening up investment arbitration to the participation of non-disputing parties may raise several concerns, namely as regards the identity and interests pursued by the so-called ‘friends of the tribunal’. This chapter analyses the provisions of TPP’s Chap. 9 on amicus curiae intervention and discusses to what extent they balance the perceived benefits and potential drawbacks of this mechanism of public participation in investor-state arbitral proceedings. The social acceptance of the TPP will depend, to a large extent, on whether it offers solutions that effectively tackle the criticisms that have been thrown at investor-state arbitration, especially those that relate to a perceived lack of transparency and public participation. However, this goal can only be truly achieved if amicus curiae participation creates added value and does not undermine the purpose of peaceful and orderly settlement of investment disputes.
Fernando Dias Simões

Chapter 8. Investment Arbitration Under Mega-Regional Free Trade Agreements: A 21st Century Model

Investment obligations and investor-State arbitration provisions normally have been negotiated under BITs; in recent years, however, and with increasing frequency, such provisions have been negotiated in the larger context of FTAs. For investment provisions, the movement from BITs to FTAs recently has taken an additional, significant step: the negotiation of such provisions in the even larger context of mega-regional FTAs. This shift in context—from BITs to FTAs, and now from FTAs to mega-regional FTAs—will significantly affect the content and operation of investment provisions. Indeed, investment arbitration under mega-regional FTAs likely will be distinctive in several important respects. This chapter addresses five distinctive characteristics of investment arbitration under mega-regional FTAs. With the conclusion of the TPP, and likely conclusion of an RCEP agreement, those five characteristics ultimately could be seen, more generally, as characteristics of 21st century investment arbitration.
Mark Feldman

Chapter 9. Market Access for Goods in the TPP: The Good, the Bad, and the Ugly

Overall, market access for goods is not quite as open as markets for services and investment in the provisions of the Trans-Pacific Partnership (TPP). While most of the improvements for goods take effect immediately on the date of entry into force of the agreement, some sensitive goods have longer implementation schedules. While the overall agreement provides substantial benefits in goods, certain products require a more mixed assessment. By using product specific rules of origin (ROOs), TPP members have recognized merit in being meticulous about different rules for different goods in different sectors. Quality in market access across the agreement is mixed, with some sectors receiving duty-free treatment in short order and others subject to complicated requirements. Agriculture remains challenging, with tariff rate quotas (TRQs) in place for some members and certain products, and tariffs that remain high initially for other markets and products, and a tariff elimination schedule extending over longer than six years. While there are deviations like these from the “gold standard”, most of the goods provisions in the agreement come into effect immediately. The overall balance struck in the goods provisions is sufficiently in favour of a positive assessment, yet there is some tarnish on the gold.
Deborah Kay Elms

New Issues and Tpp: Revamping the International Economic Order


Chapter 10. Competition Chapter in the Trans-Pacific Partnership Agreement: Developing a Template for a Multilateral Framework

The nexus between trade liberalization and regulation of competition has been long recognized. With a growing number of economies that have established national competition law, inclusion of competition policy provisions in most regional and bilateral trading agreements and incessant calls from the international business community for coordinated action against cartels and abuses of market dominance, the global trading environment appears auspicious for a multilateral framework on competition. This paper argues that the competition chapter in the TPP accord could serve as a leadoff. The chapter purports to set a standard for competition policy so as to prevent unregulated anticompetitive practices from undermining the gains expected from the removal of trade and investment barriers. It introduces progressive application of WTO core principles of nondiscrimination and transparency in competition law, stipulates rights and obligations of parties to ensure due process in enforcement, and promotes consumer protection by including unfair trade practices. Compared to the trailblazing pact on trade and investment contained in the rest of the TPP agreement, the competition chapter does not break as much new grounds. The provisions are respectful of the parties’ policy space and prosecutorial discretion. Nonetheless, they are sufficient to address concerns on divergent, and at times conflicting, application of national competition laws and to deter anticompetitive practices from supplanting trade liberalization measures.
Ma. Joy V. Abrenica, Johannes Bernabe

Chapter 11. State-Owned Enterprises in the TPP Agreement

State-owned enterprises (SOEs) are enterprises owned by states or governments for the purpose of accomplishing some governmental purposes. Chapter 17 of the TPP provides the rules designed to require the Parties of the TPP to subject SOEs in their jurisdictions to disciplines as provided for in Chapter 17 so that behaviors of SOEs would not be harmful to private enterprises in the market of the Parties and would not be unduly disruptive of the operation of free market there. Chapter 17 defines SOEs as enterprises which primarily engage in commercial activities and in which Parties (a) own 50% or more of their stocks, (b) control 50% or more of voting rights through the ownership of share or (c) have the right to appoint more than one half of their governing bodies such as board of directors. Commercial activities are defined as activities oriented toward profit-making. Chapter 17 directs Parties to ensure that SOEs within their respective jurisdiction operate according to commercial activities and that Parties would not provide to SOEs financial assistance on non-commercial basis in their jurisdictions. All of such directives are designed to ensure that SOEs within the TPP act just like private enterprises and, therefore, the level playing field between SOEs and private enterprises is created. However, Chapter 17 provides many exceptions to the general rules. Exceptions consist of those of general nature and country-specific ones. In fact, about 70% of the whole pages (about 100 pages) is devoted to those exceptions. Chapter 17 is subject to review in 5 years after the TPP takes effect including whether to expand its scope or not. Therefore, it is expected that there may be substantial changes in future. Although Article XVII of the GATT stipulates rules of SOEs, its scope is limited to export and import trade. It is worthwhile that Chapter 17 in the TPP is the first international agreement which provides for and elaborates on comprehensive and detailed rules on SOEs and, in this sense, significant.
Mitsuo Matsushita

Chapter 12. Anti-corruption Provisions in the TPP: Innovation, Effectiveness and Prospects

The anti-corruption provisions in the “Transparency and Anti-Corruption” Chapter (Chapter 26) of the TPP are quite detailed. Their ultimate purpose is to eliminate bribery and corruption in international trade and investment. The approaches are to require TPP Parties to ratify or accede to the United Nations Convention against Corruption of 2003, to establish as criminal offences for natural and legal persons, to prevent certain irregularities, to enforce Parties’ anti-corruption laws, and to apply the dispute settlement mechanism to the anti-corruption provisions of the TPP, among others. The chapter of this book explains the significance of anti-corruption in trade agreements. It also offers a detailed assessment of TPP’s anti-corruption provisions and formulates a number of options to further improve them. Since some of the obligations are subject to the dispute settlement procedures and since there are international cooperation provisions, the chapter argues that a proper use of the dispute settlement mechanism and the proper enhancement of international cooperation would contribute to the removal of corruption as “trade barriers”.
Chang-fa Lo

Chapter 13. TPP Promoting Financial Services as an Investment Playground: Crystalizing a Change in Approach from GATS?

Considered as a secondary subject matter and largely ignored by international trade negotiators and the multilateral trade regime for some time, the importance of financial services in the wider sphere of international economic law has been steadily rising since the 2008 global financial crisis . First regulated internationally in the WTO’s GATS and the accompanying Annex on Financial Services , there remains much work to be done to further open and craft standards and rules for the sector. The text of the TPP had the capacity to play an important role in terms of liberalizing market access to financial services and in establishing a new set of standards and rules for their development at the global level. Financial services are both a trade and investment issue, yet negotiations have traditionally placed the issue within the trade ‘silo’ without recognising its important place as an investment issue. Negotiators of the TPP , in contrast, have followed the modern trend and added coherence to the issue by dealing with it both as a trade and investment issue, and rightfully placing financial services markets as a major investment playground. The TPP appeared to be a significant new player in the field of international economic law and this chapter therefore considers the TPP’s potential contribution to the liberalization of financial services by focusing on the idea that financial services may be promoted as a form of investment.
Antoine P. Martin, Bryan Mercurio

Chapter 14. WTO to the TPP: Evolution of Environmental Provisions in Trade Agreements

This paper traces the evolution of “environment” from an “exception” to trade obligations under the GATT and WTO Agreements, to an obligation under trade agreements. The TPP’s chapter on Environment deals with several aspects relating to a country’s internal environmental regulations- an aspect which has traditionally been addressed in multilateral environmental agreements (MEAs). The main difference between MEAs and trade agreements is that the latter potentially makes available the tool of trade sanctions for enforcement of environment-related obligations as set forth in the agreement. This could become problematic since the driving force behind trade agreements is mercantile interests, rather than environmental interests. This paper examines the approaches to trade and environment that have emerged in free trade agreements other than the TPP Agreement as well. The paper highlights that while empirical evidence on using environmental provisions in trade agreements has been limited, there could be a potential risk of use of such provisions as protectionist measures in the garb of environmental activism. It also contrasts TPP’s approach with that of EU’s approach in some of its FTAs, which have addressed environmental issues under the overall concept of ‘Sustainable Development’. EU’s FTAs also keep such aspects outside the scope of the dispute settlement chapter of the FTA, which means that the tool of trade sanctions are not available in the context of such obligations. This article asks whether such an approach presents a more balanced view to addressing environmental issues in trade agreements.
R. V. Anuradha

Chapter 15. Enhancing Labour Protection Through TPP Labour and Investment Chapters

States increasingly prefer to conclude comprehensive trade and investment rules in the same instrument under FTAs. How labour rights protection, an important non-economic matter, which can be effectively enforced across chapters might become an emerging challenge to FTAs. The TPP provides a new platform to look at labour matters from the perspective on labour, trade and investment linkages. Certain types of labour-linkage provisions are shifted away from the current bilateral investment treaties to the Labour Chapter, which may indicate a new focus on labour-trade-investment links. The Investment Chapter and investment arbitration in general might function as a complement to the Labour Chapter by enhancing the compliance of domestic labour laws of host states and foreign corporations. However, insofar as labour rights protection is concerned, it seems that the Investment Chapter does not go very far than those taken by other FTAs. Perhaps neither the Labour Chapter nor the Investment Chapter can address the genuine concerns of workers in Asia-Pacific region. From this perspective, one might not easily ascertain that the TPP has reached “the strongest protections for workers of any trade agreement in history” as the United States Trade Representative has stated.
Tsai-Yu Lin

Chapter 16. TPP’s Coup de Grâce: How the Trademark System Prevailed as Geographical Indication System

In the struggle for supremacy between two diametrically opposed systems to protect Geographical Indications (GIs), the Trans-Pacific Partnership Agreement (TPP) gives the decisive push in favour of the trademark system. This has profound implications for generic geographical names, not only for TPP members, but also for their trade partners. Appellation d’Origine Contrôlée (AOC), Lisbon Agreement, EU’s Protected Designation of Origin (PDO) and Protected Geographical Indication (PGI) regime and the Geneva Act of the Lisbon Agreement set up sui generis registration systems in order to protect the AOs, PDOs/PGIs and GIs against confusion, dilution, deception and usurpation. These sui generis systems have a shield against becoming generic in common. The question is whether the maximalist doctrine for multilateral treaties have reached its zenith with the Geneva Act of the Lisbon Agreement. Since this multilateral treaty allows intergovernmental organizations to become members, the EU could drastically change the significance of this sui generis system. Then again, the TPP suggests that the pendulum is swinging back for multilateral treaties towards a trademark dominated GI system that protects non-wines and spirits against confusion, dilution and deception, but not against usurpation. By demanding that TPP members be able to protect GIs via trademarks, Article 18.19 TPP gave a deathblow to any exclusive sui generis regime. Nevertheless, a fortiori, the battle for hegemony of the sui generis or trademark system will continue along the vault line of the Old and New Worlds at the level of bilateral free-trade agreements and specific GI agreements.
Danny Friedmann

Chapter 17. The Differences Between China’s Recent FTA and the TPP: A Case Study of the China-Korea FTA

The China-Korea Free Trade Agreement (FTA) is one of the latest FTAs that China concluded. The chapter analyzes the following question: how far is the China-Korea Free FTA away from the Trans-Pacific Partnership (TPP)? The comparison between the China-Korea FTA with the TPP helps to understand the similarities and differences between China’s trade pacts and the deep FTA. The paper will analyze these two agreements from four aspects: coverage, services and investment, non-trade concerns and good governance.
Heng Wang

Chapter 18. Government Procurement in TPP and its Implications for China’s GPA Accession Negotiation

As other FTAs’ led by the United States, government procurement is covered by the TPP. By displaying the core rules and principles of government procurement in TPP in by comparison with those in the GPA and in the related bilateral agreements, the paper is trying to find to what extent the openness landscape has been changed. Following this, several key issues or obstacles are discussed by reviewing China’s ongoing GPA accession negotiation started in 2007. The point is whether those changes made by TPP will make any difference to those key issues and produce an effect on the currently stagnated talks.
Xinquan Tu, Na Sun

Chapter 19. The TPP and Government Procurement in Malaysia

Government procurement (GP) is one of the most controversial areas in TPP, particularly for Malaysia where government procurement activities contribute significantly to the development and growth of businesses and the economy a whole. This paper seeks to investigate the impact of the TPP on Malaysian government procurement rules. While efficiency, competition, and effectiveness will be the rule of the game, the GP Chapter of the TPP can make the Malaysian legal framework regulating GP more predictable, accessible and transparent, giving value for money to consumers and taxpayers. This paper, however, will explore the challenges to procuring entities who have to comply with higher international standards when awarding contracts and to the recipients of those contracts among local companies including Bumiputera companies as they have to brace for an open GP market post-TPP. There are flexibilities offered by the GP Chapter, but there will be an issue whether those flexibilities could help balance between the positive and negative effects of the Chapter on Malaysia.
Haniff Ahamat, Nasarudin Abdul Rahman

The Regulation of E-commerce in the TPP


Chapter 20. The Regulation of Digital Trade in the TPP: Trade Rules for the Digital Age

With the rapid development of the internet, electronic commerce is also gaining importance in international trade. However, the rules governing digital trade is still largely lacking. While WTO Members have been discussing the regulation of electronic commerce since the last century, little progress has been made. Instead, most of the progresses are made in various free trade agreements, especially those sponsored by the United States. This article starts with a review of the efforts to regulate e-commerce in the WTO, as well as what the pre-TPP US FTAs have achieved so far, followed by a critical appraisal of the achievements and shortcomings of the e-commerce chapter in the TPP. It is hoped that, by reviewing the evolution of the regulation of e-commerce from the WTO to the TPP, we can learn some lessons on how the rules are being shaped, as well as how it might evolve in the future.
Henry Gao

Chapter 21. Data Protection in the TPP: More Emphasis on the “Use” Than the “Protection”

It is very significant for the TPP, being a free trade agreement, to have explicit provisions on data protection, if it is ultimately effective. The TPP recognizes the importance of personal data in the digital economy. However, it is a pity that the TPP has provisions on data protection which do not aim at a higher standard among the Parties, as the use of personal data is significantly emphasized over the protection of personal data. It is further disappointing for the TPP to make substantial obligations less obligatory by using the words like ‘should’ and ‘shall endeavor to’. Although the TPP’s fate is still uncertain as a result of President Trump’s decision of withdrawal, its provisions on data protection seem to revive in any future trade agreement which aims to legalize a free trade in data including personal data. In conclusion, it may be understandable that the degree of data protection is not at the same level with the degree of force accorded to the use of personal data in the TPP, as it is not a data protection or privacy agreement per se. Nevertheless, in order to create and further develop the digital economy, data protection should be on the same level as the use or trade in data including personal data.
Nohyoung Park

Chapter 22. Digital Copyright in the TPP

This Chapter focuses on key copyright issues in TPP’s IP Chapter, especially those related to the Internet and digital technologies. Those issues include copyright term extension, safe harbor for Internet service providers (ISPs), technological protection measures, criminal liability, and limitations and exceptions. This chapter analyzes whether private and public interests represented by various stakeholders in the copyright ecology are taken into full account and kept balanced under TPP. This chapter also evaluates member states’ diverse considerations for implementing those copyright provisions. Furthermore, this chapter uses the IP Chapter as a lens to illustrate the international expansion of copyright facilitated by trade negotiations. Copyright and other provisions in the IP Chapter represent the US’s continuous efforts in raising the standards for IP protection internationally to strengthen its economic interests as a primary net-exporter of IP in the globe. These provisions go beyond the existing international IP treaties by providing stronger protection to right owners. US’s approach to the IP Chapter in TPP resembles the one it adopted in bilateral trade negotiation, which is primarily based on the US domestic law. Nonetheless, it should be noted that not all criticisms on TPP’s ignorance of public interests are valid. It may be too arbitrary to argue that the IP Chapter is completely indifferent about users’ interests and access to copyrighted works. Public interests are addressed in some provisions in the IP Chapter, whereas they were entirely or partly disregarded in most other ones.
Jyh-An Lee

Chapter 23. The TPP and the Digital Economy the Agreement’s Potential as a Benchmark for Future Rule-Making

The way things are quickly changing in the internet economy is important from the standpoint of regulation (and thus government actors and policymakers), since legislative and regulatory frameworks that are too restrictive may tend to inhibit the emergence of new business models or may impede the adoption of innovative products and solutions that have the potential to disrupt established business models and those interests that are behind them. This is in fact the very problem we continue to encounter today and that confront a range of recent innovations, but is particularly visible in the battles being waged over different platforms and services that have emerged in the so-called “sharing economy” [For more on the sharing economy see Telles (2016)]. This chapter examines some of the negotiating outcomes achieved in the Trans-Pacific Partnership and other negotiating fora on rules for the digital economy. This chapter also discusses whether or not the tentative negotiating outcomes achieved in the TPP can be considered the starting point for an emerging international consensus on these rules. Although now very probably defunct as an economic integration project, the TPP still constitutes a helpful starting point given that it nevertheless constitutes an agreed body of rules concluded between a very diverse set of developing and advanced economies with a distinctly divergent set of objectives and approaches when it comes to regulating certain aspects of the internet economy.
Simon Lacey

The Implications of TPP on Asia and Beyond


Chapter 24. Mega-FTAs and Plurilateral Trade Agreements: Implications for the Asia-Pacific

During the first twenty years of the World Trade Organization’s history, the multilateral trading system has increasingly been accompanied by (1) free trade agreements (FTAs) and (2) preferential trade arrangements (PTAs). Such agreements have proliferated steadily, with several hundred having been notified to the WTO as of early 2016. However, there have been some significant changes in the types of trade agreements being negotiated outside the WTO in recent years. Since 2010, there has been a continued proliferation of “traditional” FTAs, but there have also been notable new developments. These include: an increase in multi-party FTAs; an increase in FTAs featuring more than one major economy; FTA coverage extending beyond the scope of the WTO Agreements; and subject-specific plurilateral negotiations being conducted outside the WTO negotiating structure. This chapter documents the rapid ascendancy of mega-FTAs and plurilateral trade agreements and explores the implications of these larger, more complicated and arguably more powerful trade agreements, with an emphasis on the Asia-Pacific region.
Meredith Kolsky Lewis

Chapter 25. Accession to TPP: Veto Power and “Opt-Out” Option

One of the most important policy questions relating to the future impact of the Trans-Pacific Partnership on the global and regional economy is whether other countries in the region, particularly China, will join the partnership. While several commentators have made some observations regarding the future prospects of TPP expansion, little scholarly analysis has been conducted. To go beyond the speculation of a certain country’s accession to TPP, we first attempt to generalize the issue before moving on to a specific question. We conduct a comparative analysis of a large number of regional trade agreements (RTAs) for a better understanding of the parameters of RTAs that are critical for membership expansion. This general framework enables us to conduct a systematic examination of specific membership expansion cases, such as China’s membership in TPP. The paper also proposes a necessary “accession practice” that truly facilitates new members’ participation to TPP and RTAs in general.
Shintaro Hamanaka

Chapter 26. Memento Mori: Membership Issues Surrounding Entry into, Modification of, and Withdrawal from the TPP

Until recently, only limited attention is paid to institutional issues in terms of the TPP, with the exception of requirements for entry into force of the TPP and possibility of new members’ accession. However, it is inevitable that membership issues will arise throughout a treaty’s lifecycle. Providing a broader perspective on membership issues that would affect proper decision-making and enforcement of the TPP or its successors is the primary objective of this chapter. Namely, there are systemic concerns that deserve attention during the course of discussions to revive or rewrite the TPP. First, with regard to the ‘late ratification’ issue in the phase the TPP takes effect, imposing an additional burden on a late ratifier regarding membership of the TPP may create incentives for early ratification. However, it may also incentivize early birds for rent-seeking by way of renegotiations or side payments, which will endanger the thin balance that drafters originally reached. Second, with regard to the ‘second ratification’ issue in the phase of amending the TPP, the rationale that requires ratification by all member states for an amendment to take effect is not clear. The current requirement may prevent the TPP’s expedited adjustment to subsequent changes in circumstances. Finally, with regard to the ‘litigation risk of withdrawal’ issue in the phase where a Party withdraws from the TPP, the leaving Party is free from risk of ISDS arbitration if the notification of the withdrawal from the TPP precedes the request for consultation by a foreign investor.
Tomohiko Kobayashi

Chapter 27. How Far Can Indonesia Go? Utilizing TSIA on the Would-Be TPP Impact for Indonesia

By offering the Trade Sustainability Impact Assessment (TSIA) assessment tools and beyond, the article discusses economic and non-economic aspects worth considering in light of Indonesia’s interest to join the Trans-Pacific Partnership (TPP). It identifies trade and non-trade elements of which future signatories of TPP Agreement such as Indonesia must take into account prior to its final decision on whether to join. Utilizing sustainable development perspective to assess a free trade agreement (FTA), TSIA offers a distinctive feature of measuring not only an FTA economic impact, but also non-trade ones that potentially arise from the agreement. This chapter accordingly offers a framework by which a careful and thorough assessment is required and of which rational calculation is settled on whether the benefits of joining TPP would outweigh the costs of remaining outside the agreement.
Riza N. Arfani, Poppy S. Winanti

Chapter 28. Picking the Right Alternative: Should India Participate in TPP Instead of RCEP?

Deeper trade integration in East and Southeast Asia has contributed significantly in development of international production networks (IPN) in several key manufacturing products in the region. To secure a much wider Asia-Pacific trade integration, negotiations for the Regional Comprehensive Economic Partnership (RCEP), involving six bilateral RTA partners of ASEAN, namely—Australia, China, India, Japan, New Zealand and South Korea has been launched from 2013, with ASEAN at the core. The other mega-FTA, Trans-Pacific Partnership (TPP) also involves a number of RCEP countries. The current analysis intends to compare the possible benefits for India through its association with RCEP and possible joining of TPP, with the help of select trade indices. The data revels that while from a pure trade balance perspective TPP offers India a better prospect, gains are expected in several RCEP countries in terms of trade complementarity, trade intensity and production integration dynamics. Because of geographical proximity, a number of RCEP countries have been able to deepen their presence in the Indian market and integrate with the value chains. It is expected that appropriate trade facilitation reforms, followed by conclusion of RCEP negotiations, would deepen intra-bloc trade flows further. The results reveal that RCEP holds an edge over TPP in India’s preference ordering on the basis of merchandise trade patterns. It is therefore concluded that India needs to focus on RCEP negotiations, at least in short run, before it can pitch for a TPP membership later, in line with its economic interests.
Debashis Chakraborty


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