CPTPP trade agreement poised to be new powerhouse partnership in beleaguered global trade system

Name: CPTPP could become game changer and supplant 'out-of-date' WTO, after mainland China, Taiwan apply
Uploaded: 2021-11-01T14:00:14.000Z
Duration: 11 min 11 s
Description: CPTPP could become game changer and supplant 'out-of-date' WTO, after mainland China, Taiwan apply

Experts weigh in on how a trade deal that the United States abandoned has gradually been gaining significance as a global agreement, rather than a regional one

Britain is looking to get in on the deal, while mainland China and Taiwan also want a piece of the pie

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CPTPP could become game changer and supplant 'out-of-date' WTO, after mainland China, Taiwan apply

Su-Lin Tan

Published: 10:00pm, 1 Nov 2021Updated: 10:58pm, 1 Nov 2021

One of the world’s biggest multilateral trade agreements has the potential to become a global game-changer and supplant a beleaguered world trade system, trade experts say.

That trade agreement – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – was formerly known as the Trans-Pacific Partnership (TPP) when it was the centrepiece of the United States’ strategic pivot to Asia. But not only has the agreement survived the disappointment of a US withdrawal, it has also attracted a host of non-Asia-Pacific countries that want a piece of the trade deal, thus increasing its significance as a global agreement rather than merely a regional one.

The original TPP was meant to be a trade pact for Asia-Paciﬁc nations, but its current shape the CPTPP has attracted Britain, which has applied to join the trade pact, as well as mainland China and Taiwan, whose back-to-back applications mirrored their World Trade Organization (WTO) memberships 20 years ago.

Tim Groser, a former trade minister with CPTPP member country New Zealand, told the South China Morning Post in an exclusive interview that these moves could help revitalise or even replace the WTO, which has come under pressure from trade wars and a defunct appellate body – the highest global trade court.

The CPTPP has manifested the “spaghetti bowl” concept, where countries cut trade deals directly with each other, thereby bypassing the WTO, the long-standing forum for the establishment of global trade rules and trade agreements, Groser said.

“What is actually happening is that the spaghetti is all being put together in this sort of large multilateral or multilateral/plurilateral deal known as TPP … and of course, now we have this interest of China, the No 2 economy in the world, plus the customs territory of Taiwan, and the interest of the United Kingdom,” he said.

“If we get a geographically European country coming into what we have always up to now seen as an Asia-Pacific entity, it does transform this from a regional to an alternative global system.”

“If the WTO continues to go round and round in circles doing very, very little, which is the case of the last 25 years, and this agreement loses its Asia-Pacific specific regional character, and starts to acquire other members, I think there’s every reason to think it could become an alternative system of multilateral rules.”