There is still room for US to join CPTPP, say analysts


ANALYSTS are not ruling the US’ decision to revisit the improved Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after terminating their agreement prior — once the treaty is all set.

Institute of Strategic and International Studies director of economics, trade and regional integration Firdaos Rosli said the suspension of 20 provisions revealed the CPTPP to be a temporary venture.

“There still is room for the US to return and this would make other Asia-Pacific countries to follow suit. Countries may also choose to refer to the original document if necessary,” he told The Malaysian Reserve (TMR).

Firdaos said by easing some intellectual property (IP) rule, the agreement might seem more appealing.

Among the 20 provisions that will be suspended are express shipments and investor rights along with IP rights.

Apart from that, state-owned enterprises provisions such as coal, trade sanctions and cultural exceptions still need to be finalised.

Firdaos said although no date for the signing has been given, it should be completed in time, to usher in the next Asia-Pacific Economic Cooperation Minister Responsible for Trade meeting in mid-2018.

HSBC Global Research chief trade economist Douglas Lippoldt said the CPTPP members intend to expedite the US’ possible return by suspending, rather than deleting these provisions.

The former International Trade and Industry Ministry secretary general Tan Sri Dr Rebecca Fatima Sta Maria said although the US is currently out of the picture, multilayer agreements like the CPTPP is good for business.

“It is a solid agreement. The other 11 nations are significant trading partners and their role in the global trade and investment environment should not be discounted just because the US has stepped out,” she told TMR.

Centre for Public Policy Studies fellow Jordan Heng-Contaxis said the omission of the US would have a negligent effect in terms of trade growth, but in terms of Malaysia, it propelled the country to adopt a higher level of standards.

“A plus point to the new agreement is that some of the politically ‘poisonous’ sections of the pact, such as most of the rules surrounding copyright, pharmaceuticals and patents, which is largely seen to unfairly benefit US’ interests, were removed,” Heng-Contaxis said.

He pointed out that while the apparent snub from Canada has resulted in a major loss of face, especially for Japan, who remains the largest economy in the re-worked agreement, the coming weeks will be crucial as to whether negotiators can get the agreement back on track.