On ReflectionDon’t mention the US-China trade war: Asia and Asean are pressing ahead with their own deals

Tit-for-tat tariffs hurled by the United States and China are starting to affect supply chains crossing Asia – but the CPTPP and RCEP agreements highlight regional governments’ commitment to trade integration

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The Comprehensive and Progressive Trans-Pacific Partnership is expected to lower barriers to trade for member firms and deliver new benefits for companies in the seven Asian CPTPP countries. Photo: AP

Published: 11:00am, 21 Oct 2018Updated: 11:06am, 21 Oct 2018

Global trade is currently headed in two directions – it is simultaneously slamming shut and opening up for Asia.

The continuing tensions in trade between the United States and China are starting to spill over into supply chains crossing Asia.

The rise in tariffs both ways is increasingly snagging large and small firms, with the likelihood of further damage on the horizon. Changing trade policies, like stricter investment screening, restrictions on cross-border movement of data and information, new rules on taxation for e-commerce and so forth promise more pain for many firms.

At the same time, however, the most significant new trade agreement in decades is poised to enter into force in January. The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) took several new big steps this week through legislature passed in Australia and Canada. When it starts, it will significantly lower barriers to trade for member firms and deliver new benefits for companies in the seven Asian CPTPP countries.

Asian countries are also enthusiastically working on a parallel trade deal, the Regional Comprehensive Economic Partnership (RCEP). The 16 member countries – Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand, and Vietnam – are meeting next week in New Zealand.