The 11 remaining countries of the Trans-Pacific Partnership (TPP) are moving forward after the departure of the United States early this year. They recently concluded three-day negotiations in Sydney, meant to map a way forward and broadly address certain issues that will be discussed more thoroughly at the group's September meeting in Japan. And while the Sydney meeting was seen as a success, there is still some uncertainty over how the group will progress without the United States.
Japan, Australia and New Zealand — all enthusiastic to see progress made — served facilitating roles in the talks, while Mexico and Canada arrived with their own amendments, which they hoped to see made quickly. The TPP could have the power to set standards in other trade deals, and the two North American countries were aiming to reshape the agreement in a way that will benefit them in current NAFTA renegotiations.
In spite of their differences, all TPP members — Japan, Australia, Brunei, New Zealand, Peru, Mexico, Canada, Chile, Malaysia, Singapore and Vietnam — unanimously agreed to suspend a clause on pharmaceutical data exclusivity, which prevents new versions of a drug from entering the market until a certain amount of time has passed. The now-absent United States pushed hard for the inclusion of the clause, and resounding agreement to ditch it may be further echoed in a planned patent-requirement freeze.
With access to huge U.S. markets no longer an incentive, it's not surprising that the remaining countries have become a little less ambitious in their commitments. Meanwhile, this type of watering down of trade terms could also have domestic repercussions for individual countries. For example, Vietnam's reform progress was partly driven by TPP requirements, and if they are made less stringent, the country's reform momentum could also suffer.
Most of the TPP members remain on board with the tariffs and import caps negotiated in the original deal, but they have yet to reach conclusions about investment rules, copyright protection and other topics. The countries will decide which specific terms to suspend at their next meeting, and are aiming to reach an agreement at the Asia-Pacific Economic Cooperation in Hanoi in November.
Overall, negotiations seem to be progressing well (unlike ongoing Regional Comprehensive Economic Partnership talks, which have seen China struggling to get its Asian neighbors to align). But ultimately, if this new TPP agreement is finalized, it will likely be a shallower deal than originally envisioned, composed of smaller economies and making less of a global impact.
And there are still sizable hurdles on the way to a final deal. For example, if the TPP-skeptic New Zealand First Party comes into power in New Zealand's Sep. 23 election, the country could withdraw from negotiations. And a recent public consultation process in Canada revealed strong negative sentiment toward TPP among some Canadians. Any additional departures from the group could slow down or even derail progress. But if they are avoided, the accomplishments of this recent summit indicate that a final deal on a smaller, shallower TPP appears to be coming together.