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TPP nations eye a future without the US with Trump in the White House

by November 19, 2016 General
United States President-elect Donald Trump had said TPP, from his perspective, was a horrible deal.

United States President-elect Donald Trump had said TPP, from his perspective, was a horrible deal.

Leaders of the Trans-Pacific Partnership nations are openly considering going it alone, without the United States, in a so-called ‘TPP minus one’ in the wake of Donald Trump’s election.

The 12 countries are meeting on the margins of the 21-strong Apec meeting in Lima, Peru.

Talking to reporters shortly after arriving in the Peruvian capital, Prime Minister John Key made it clear the grouping faced a critical crossroads with Trump’s election.

“Maybe it is one of the most important Apecs I have been to.”

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He said in the past the consistent stance at Apec had been that free trade was good and that free trade across the region was the big goal, ultimately through an over-arching Free Trade Area of Asia-Pacific (FTAAP).

“Now for the first time ever, really, we’ve got the United States under president-elect Trump going into a very different space.”

It was unlikely Trump would accept the broader FTAAP if he opposed the TPP.

Key said he favoured keeping the US in TPP, perhaps by making some small changes to mollify Trump.

“Something significant enough for Donald Trump to be able to say he has got a better deal, but not both so time absorbing or significant that we couldn’t get it done quickly,” Key said.

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“My preference is very much with the US if we can get there –  maybe with some coercion, maybe with some changes that we could agree to that didn’t have an overall significant enough impact to slow the thing down dramatically, maybe it’s possible to get in there. we just don’t know.”

Trump had said TPP, from his perspective, was a horrible deal, but he hadn’t said he was philosophically opposed to trade, Key said.

There were three scenarios: Go ahead without the US with an 11-member TPP, Trump changes his position and accepts the agreed text, or the countries go back to the table and start talks again.

But the last option would be difficult, and if New Zealand had to give more it would want more concessions in return – as would other countries. ​

Once the deal was opened up again, the lobby groups would came back in.

Key said free trade had been a catalyst for growth in New Zealand. Leaders needed to make the case for its benefits.

New Zealand’s goal was a free trade agreement that included the US and Japan through the TPP. 

But a deal without the US, but with Japan would still be worth it from New Zealand’s point of view.

“It might be, in the end, the way we go forward without the United States – that’s  not an impossible scenario. But we have a few years to make that decision.”

A meeting of TPP leaders is planned for Sunday and New Zealand was reserving judgement on a ‘TPP minus one’, he said.

Key cut short the trip to Apec, which had originally included a three-day trade and business stopover in Argentina, because of the Kaikoura earthquakes.

He said if any more significant events unfolded he would return early from Peru.

He is scheduled to hold formal talks with a number of leaders including Canada’s Justin Trudeau, Chile’s Michelle Bachelet and Peru’s President Pedro Pablo Kuczynskii during the two-day summit as well as a less formal meeting with Australian PM Malcolm Turnbull.

He will also have the opportunity to rub shoulders with United States President Barack Obama, who is on his final diplomatic tour before he leaves office, as well as presidents Vladimir Putin of Russia and Xi Jinping of China, as New Zealand pushes hard for an upgrade to the free trade agreement with China.


TPP: The Trans-Pacific Partnership is the furthest down the track and is one of the largest free trade deals ever negotiated. It covers 12 countries; New Zealand, US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, Canada, Mexico, Chile, Peru, and the US. But there are serious doubts the US will ratify it now Donald Trump has won the presidency.

RCEP: The Regional Comprehensive  Economic Partnership includes the huge China and Indian economies, but not the US. It is still in its early stages, though some countries believe meaningful progress on it is possible by the end of 2017. The countries involved are: New Zealand, Australia, China, India, Japan, South Korea, Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Singapore, Thailand, Vietnam, Malaysia, and the Philippines,

FTAAP; The Free Trade Area of the Asia-Pacific is the big kahuna of trade deals in the region, linking the TPP and RCEP countries in one bloc – though it is the least developed option.

 – Stuff