THE TTALK QUOTES 

On Global Trade & Investment

 

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No. 25 of  2016

WEDNESDAY, MAY 4, 2016

Filed from Portland, Oregon

Click here for last Tuesday's quote form the United Steel Workers.
RCEP: LOOKING AHEAD

"It would not be in New Zealand's interests to stand aside from a negotiation that covers at least 55 percent of our merchandise exports."

Todd McClay
April 29, 2016
CONTEXT

RCEP is the Regional Comprehensive Economic Partnership currently being negotiated by 16 countries, namely, the ten members of ASEAN, the Association of Southeast Asian Nations plus six others.  The ASEAN members are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

The other six are the "plus three" in ASEAN Plus Three: China, Japan, and South Korea; and then three more: Australia, India, and New Zealand.

Often described as a China-led exercise, RCEP was born, in a sense, at an ASEAN meeting in 2011.  Now negotiators are working to wrap up the deal by the end of this year.

Todd McClay is New Zealand's trade minister, and today's quote is from a New Zealand government press release from last Friday, April 29, announcing that the next round of RCEP negotiations will be held in Auckland from the 12th through the 18th of June.

New Zealand (NZ) is, admittedly a small country, with a population not much bigger than Oregon's - 4.7 million souls in New Zealand versus just over 4 million in Oregon.  The demographic sweep of RCEP on the other hand is huge.  As the NZ government's April 29 press release points out:

"Once completed, RCEP will be the largest trading block in the world in terms of population.  The countries participating have a total population of over 3 billion.  They also account for around 27 percent of global trade and have a combined GDP of $US23 trillion.  Critically for New Zealand, the 15 other countries cover 55 percent of our goods export market (in 2015) and six of our top ten trading partners."

COMMENT
The notion that either TPP or RCEP will be the rule-setting agreement for India and the Asia Pacific now seems quaint.  The push behind RCEP is palpable, and if you have been watching the agonies of American politics, you are probably not taking an implemented TPP for granted.  Our guess is that those two agreements are going to end up sharing the regional stage.  And ironically, much as their leading champions - notably the United States and China - might each wish for the rival agreement to simply disappear, in fact they feed off one another.  A recent report in The Times of India, for example, noted that "Indian industry is apprehensive that the TPP will adversely affect India's exports." 

On the other side, if and when RCEP seems truly imminent, it is likely to influence America's debate over TPP. 

But RCEP is still far from a done deal, and it still has major obstacles to overcome.  We will look at some of those later this week.  Those obstacles do not change the basic picture, however.  RCEP is moving forward and could well be a done deal before this year is out.

RELATED EVENT
On May 20, the Global Business Dialogue will host a half-day conference on the topic:

PACIFIC ARRANGEMENTS:
A Look at the Likely Effects of TPP, RCEP, and
Key Bilaterals on
Production, Employment, and Markets in
The United States and Other Countries

Friday, May 20, 2016, from 9 a.m. to 2 p.m.
The St. Regis Hotel, Washington, DC

The formal notice for this event should reach your in-box soon.  Among other things, it will note the participation of the embassies of Japan and New Zealand and of business representatives like Christopher Padilla of IBM and Nick Giordano of the National Pork Producers Council.  So mark your calendar. You are going to want to be there.
SOURCES & LINKS
NZ to host RCEP round takes you to the April 29 press release from the New Zealand government that was the source for today's quote.

To Seal the RCEP deal is a link to The Times of India story mentioned in the comment section above.

 

 

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