New Zealand targets supply management system to get better access to Canada's dairy market

LONG READ

Janyce McGregor - Yesterday 

Canada's dairy industry will soon be defending a new front in its ongoing battle to preserve its supply management system in the face of international trade challenges.

On Thursday, New Zealand's minister for trade and export growth, Damien O'Connor, announced his government has initiated dispute settlement proceedings under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It's the first time consultations have been triggered in an attempt to resolve differences between signatories of the eight-member Pacific Rim trading bloc.

The CPTPP came into effect at the end of 2018, with Canada and New Zealand among its original six members. New Zealand is an aggressive global exporter of dairy products, putting it on a collision course with Canada's relatively closed domestic market both during the original negotiations, and as the deal has been implemented.

"Our priority is to ensure that New Zealand exporters have meaningful access to the benefits negotiated under CPTPP, and that all parties fulfil the commitments they have made to each other under the agreement," O'Connor said in a release.

While New Zealand's relationship with Canada is "excellent," the minister said, the two countries have engaged on this issue "over a number of years and these proceedings will not come as any surprise to them.

"Occasionally even good friends disagree, and it's for that reason dispute settlement mechanisms in free trade agreements such as CPTPP exist to provide a neutral forum for settling such disputes when they arise," O'Connor said.


© Blair Gable/Reuters

The federal government, and Minister of International Trade Mary Ng, have seven days to respond to New Zealand's dispute resolution request.

Canada was notified Thursday, the New Zealand government release said. Canada has seven days to respond, after which the two countries will begin formal consultations. If those don't resolve their differences, New Zealand can request a panel to adjudicate the dispute, according to the provisions found in Chapter 28 of the agreement.

International Trade Minister Mary Ng's office did not immediately respond to a request for comment from CBC News.
Latest in a line of disputes

It's not the first time Canada's system for controlling the importation of dairy products has been targeted by trading partners and criticized as unfairly protectionist. Similar issues emerged with cheese imports under the Comprehensive Economic and Trade Agreement with the European Union, although, so far formal arbitration has not been required.

To stabilize domestic prices and maintain a consistent national supply of cow's milk and other processed dairy products, the federal government uses prohibitively high tariffs to discourage any imports beyond the minimum levels required by the World Trade Organization and negotiated trade agreements with specific partners.

The CPTPP guaranteed member countries a specific amount of tariff-free access to Canada's market in 20 different categories of dairy, egg and poultry products — all sectors that are part of Canada's supply management system.

In order to import these named products tariff-free, interested businesses must apply to Global Affairs Canada for a share of the annual quota for the specific commodity. The ultimate decision over who gets to hold how much quota for a given year rests with the trade minister

Less than a month before the CPTPP came into effect, the Liberal government announced it would allocate between 80 and 90 per cent of the import licences to domestic dairy processors, with a much smaller share available for dairy distributors. Grocery retailers — businesses that directly import and sell food products to consumers — were shut out entirely.


© Nick Perry/AP

Damien O’Connor, New Zealand’s minister for trade and export growth, said his country's relationship with Canada remains 'excellent' despite their issues with dairy trade.

For Canada's dairy sector, it was a form of compensation for the market share they stood to lose to foreign competitors. Processors already active in the market, industry spokespeople argued, would know best what kind of complementary foreign imports could fill market gaps for consumers.

Retailers, not to mention foreign producers, called foul, pointing out that domestic processors have no incentive to import goods that compete with their own. They warned Canada may not import as much foreign dairy as the agreement specified, although the federal government put rules in place to supposedly prevent importers from applying but then not fully exercising their right to import tariff-free.
Fill rates suggest unused quota

Import data posted on the Global Affairs website suggests New Zealand's concerns may be founded, at least for some products. Although Canada was close to importing the full quota negotiated for butter under the CPTPP last year, the data for cheese and other commodities show a much bigger gap between what was bargained at the negotiating table and what's been realized at the border.

That data doesn't specify how many of those imports came from New Zealand. Decisions over what to import from which CPTPP countries rest with the holder of the import licence. The other major dairy exporter among current CPTPP partners is Australia.

The quota volumes set for CPTPP partners predate the departure of the United States from the agreement following the election of former U.S. president Donald Trump, and the subsequent renegotiation of the North American Free Trade Agreement (NAFTA), in which the U.S. also successfully negotiated additional tariff-free access to Canada's dairy market in a long list of product categories.

Once the Americans left, not all of the CPTPP categories, which include fresh products, remained practical and competitive for producers farther away to fill, especially after international shipping took a hit during the COVID-19 pandemic and remains significantly more expensive as supply chains continue to strain amid disruptive geo-political events like the war in Ukraine.

The United Kingdom is in the early stages of talks to join the CPTPP in the future. Depending on how those accession negotiations go, the U.K. could compete for this market share in the future.

Thursday's challenge shows New Zealand hasn't forgotten about its grievances. And it may be seeing fresh momentum for its side of the argument, following a decision by a panel established under the Canada-U.S.-Mexico Agreement, CUSMA, the successor agreement to NAFTA, that found Canada's administration of similar import licences wasn't consistent with what the Americans believed they had signed onto when NAFTA was renegotiated.

In early March, Canada announced changes to its CUSMA quota allocation policies, eliminating the pool reserved only for processors. However, the CUSMA panel decision maintained the right of the trade minister to make the final decision. The end implications of these changes remain unclear.

The U.S., for its part, is still sounding skeptical.

During a visit to Ottawa last week, United States Trade Representative Katherine Tai called access issues with Canada's dairy market a "source of great frustration." While she and Ng are still "talking and thrashing out the details for how we might be able to make some progress," Tai said "it's been a thorny issue for decades, for sure."

Canada's dairy industry remains bitter for having to take a succession of hits to its market in order for Canada to land several subsequent trade deals under the Liberals. In return for taking these hits for the team, they've demanded compensation from Canadian taxpayers.

On top of benefits from the way import licences are allocated, Canadian farmers are receiving up to $1.75 billion in direct payments over the first four years of the implementation of both the CPTPP and Canada's trade agreement with the European Union. The owner of a farm with 80 dairy cows, for example, was awarded approximately $38,000 each year.

The 2021 federal budget also established a $292.5 million investment fund for domestic dairy processors, to help them compete.

Finance Minister Chrystia Freeland said in her spring budget that her department will include additional domestic dairy sector compensation for losses attributable to CUSMA in next fall's economic statement.

Mathieu Frigon, the president of the Dairy Processors Association of Canada, told CBC News he's aware of New Zealand's request for consultations and his organization is committed to working collaboratively with the federal government "to defend our country's ability to design and implement tariff-rate quota allocation mechanisms that meet its trade obligations and support its domestic production."

CPTPP: Trump abandoned this giant trade deal. Now, China wants in

By Diksha Madhok, CNN Business 

China has applied to join a major Asia-Pacific trade partnership that the United States ditched several years ago, as the world's second largest economy tries to bolster its relationships in the region.

EVEN THOUGH IT HAS ITS OWN FTA CALLED RECTP WHICH TPP WAS A RESPONSE TO

© Esteban Felix/AP The signing ceremony of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in Chile in 2018.

Chinese Commerce Minister Wang Wentao applied for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), according to a statement published by the ministry late Thursday.


The CPTPP is an 11-country free trade pact that came into force in December 2018 and includes Mexico, Australia, Canada and Singapore. It succeeded the Trans-Pacific Partnership (TPP) after the United States withdrew under former President Donald Trump in 2017.

The TPP was negotiated under former US President Barack Obama, who wanted to counterbalance China's growing clout in the region by imposing US-backed labor, environmental and patent protections.

Obama wanted the deal to be a major part of his legacy, but his successor, Trump, withdrew the United States from the partnership in 2017. Chinese leaders began angling to take its place almost immediately.

US President Joe Biden backed the TPP during his time serving as Obama's vice president. But his stance has shifted over the years: While running for president in 2019, Biden said he would "not rejoin the TPP as it was initially put forward."

"I would insist that we renegotiate pieces of that," Biden said at a presidential debate during the Democratic primary.

Chinese officials on Friday boosted the idea of involvement with the CPTPP. Foreign ministry spokesman Zhao Lijian called it "conducive to promoting regional economic integration in the Asia-Pacific region, as well as the economic recovery, trade development and investment growth after the pandemic," at a press conference.

The agreement cuts tariffs among participants, standardizes regulations in areas such as food safety and determines levels of market access for goods and services, such as visa rules for business travelers, which can vary between members.

But the path forward may not be easy for China, particularly since relations between the country and CPTPP member nation Australia have been worsening.

In recent years, Australian Prime Minister Scott Morrison has moved to embrace the United States more closely as a security partner, building a personal relationship with Trump and attempting to do with same with his successor, Biden.

China's official application comes just a day after Canberra signed a security deal with the United States and the United Kingdom called AUKUS.

Australian coal, wine, barley and beef have all already been affected by trade tensions with China, and experts say that defense deal has antagonized Beijing further.

"China probably won't get into CPTPP anytime soon, but news of its formal application coming a day after the AUKUS announcement neatly underscores the continuing rift in how Washington and Beijing conceive of 'competition' in Asia," tweeted Ankit Panda, a fellow at the Carnegie Endowment for International Peace.

Still, the Chinese and Australian economies are highly dependent on each other. In 2020, tensions between Australia and China did not stop the two countries from pressing ahead with a free trade deal in Asia-Pacific called the Regional Comprehensive Economic Partnership, as both nations saw benefits from their deeper economic integration with other Asian countries. The RCEP spans 15 countries — including Japan, Indonesia and Thailand — and 2.2 billion people, or nearly 30% of the world's population.

At Friday's press conference, Zhao, the Chinese foreign ministry spokesman, said that China's efforts to join the CPTPP have "nothing to do with the US, UK and Australia trilateral agreements."

"[China] is pushing for economic cooperation and regional integration while the US, the UK and Australia are pushing for war and destruction," he added.

Even if China were allowed to join the CPTPP, the country may find some aspects of the agreement challenging, said Alex Capri, a research fellow at Hinrich Foundation. He singled out "e-commerce and data standards," though said China may be able to find loopholes.

"Keep in mind that when the US pulled out, some 20 provisions dealing with data privacy, IP protection and other digital standards were essentially put on hold," Capri added.

Meanwhile, China isn't the only country attempting to join the CPTPP. Earlier this year, the United Kingdom began talks on entering the partnership, which it sees as one of its biggest opportunities to forge economic alliances beyond Europe after Brexit.

— Hanna Ziady, Ben Westcott and CNN's Beijing bureau contributed to this report.

US tariffs didn’t change China but rejoining Pacific trade pact could: Obama aide

Washington’s tariff hikes have not forced China to reform, former acting deputy trade representative Wendy Cutler says in think tank report

Next president should rejoin the 11-member Asia-Pacific agreement Donald Trump withdrew from in 2017, she argues

Wendy Cutler, the former acting deputy US trade representative, said the US could not counter China by working alone. Photo: Handout

A former US trade official is calling for the next US president to rejoin a trans-Pacific trade agreement as a means to working with like-minded countries and offering an alternative to China’s state capitalism.

Wendy Cutler, who was acting deputy US trade representative under former president Barack Obama, said the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was still the best way for the United States to redefine global trade and counter China. Her comments came in a report published on Wednesday by think tank the Asia Society Policy Institute, of which she is vice-president.

Formerly the Trans-Pacific Partnership (TPP), the CPTPP is one of the world’s largest multilateral free-trade agreements, accounting for 13.5 per cent of global GDP, and was seen by Beijing as a way for the Obama administration to contain China’s rise in the Pacific region.

The agreement was renamed after the
US, under President Donald Trump, withdrew in 2017, and came into force the following year, featuring 11 Asia-Pacific countries: Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.


Trump orders US withdrawal from trans-Pacific trade deal

The report contributed to by Cutler – “Re-engaging the Asia-Pacific on Trade: A TPP road map for the Next US Administration” – urges the next president to explore options for re-engaging with countries about the trade agreement.

“In recent years, the case for US participation in the TPP has only become more compelling as the political and economic importance of the Asia-Pacific region has grown and concerns about Beijing’s economic model have mounted,” Cutler said.

“With no end to tensions with China in sight, there is a growing recognition that the United States would be better off enlisting like-minded countries to rein in
unfair Chinese trade practices and to promote an alternative economic model to state-led capitalism, rather than going it alone. To date, US unilateral tariff hikes and export control restrictions have not led to meaningful Chinese reforms.”
The report suggested four options that the next US administration would have for re-engaging the CPTPP countries on trade: returning to the original TPP agreement, formally acceding to the CPTPP, seeking a broader renegotiation with the CPTPP as a baseline, or working on a narrower sector-specific deal as an immediate, interim step.

Representatives from the 11 CPTPP member countries mark the signing of the agreement in 2018. Photo: AP

Cutler said in the report that renegotiation of the trade deal could be one of the more likely options, with the US revising or adding provisions such as rules on origin, labour, environment and currency manipulation. This option, though time-consuming, could also open the door to expanding the deal for other accession candidates such as South Korea to join and reshape the agreement, Cutler argued.

She said the US can rebuild trust with CPTPP members by first pursuing an interim, sector-specific trade deal on an area such as digital trade, or trade in medical and other essential products in light of the vulnerabilities in supply chains exposed by the
coronavirus pandemic.

This article appeared in the South China Morning Post print edition as: US urged to rejoin Pacific trade agreement

Taiwan questions China's suitability for Pacific trade pact, fears 'obstruction'


A Taiwanese flag flaps in the wind in Taoyuan

Ben Blanchard, Yimou Lee and Jeanny Kao
Thu, September 30, 2021, 

TAIPEI (Reuters) - China's restrictive practices present fundamental problems for its application to join a major pan-Pacific free trade pact, and if it joins before Taiwan there is a risk it could block their application, the island's economy minister said.

Taiwan and China both applied last month to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), but China says it opposes Taiwan - which it claims as its own territory - joining.


"If China enters first, certainly there is a risk of them obstructing Taiwan," Taiwan Economy Minister Wang Mei-hua told Reuters in an interview late on Thursday. "Taiwan joining anything, they oppose."

China says it has the right to represent Taiwan's 23.5 million people in international bodies regardless of the island's claim that it is an independent country.

Beijing has numerous issues, from internet censorship to labour rights, that call into question whether it can reach the CPTPP's high standards, she added, saying those requirements are set to "challenge China's very fundamental systems".

"If China can change these, I think changing this system and then entering (the trade pact) is not a bad thing. But the prerequisite is that if this system is not changed, why can they enter CPTPP? This is an issue I don't really understand," she added.

"Look at their information - nothing can enter. Facebook can't enter, Google can't enter," Wang said, referring to China's blocking of both major sites, which it does to a slew of Western internet firms including Twitter, all in the name of national security.

The original 12-member agreement, known as the Trans-Pacific Partnership (TPP), was seen as an important economic counterweight to China's growing influence.

But the TPP was thrown into limbo in early 2017 when then-U.S. President Donald Trump withdrew the United States.

The grouping, which was renamed the CPTPP, links Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Taiwan, a major semiconductor producer, has applied to join under the name it uses in the World Trade Organization (WTO) - the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. Taiwan is also a member of the Asia-Pacific Economic Cooperation grouping.

Wang said Taiwan was not aware of any CPTPP member objecting to their application, in contrast to the disquiet expressed by Japan in particular about China's bid.

"At the very least after we submitted the written application, we've not heard that any member opposes, not like after China applied, when some countries brought it up."

Taiwan has been angling for free trade deals with other countries, especially other democracies. Wang said if it joined, it would not need to seek a separate agreement with Australia, or fellow CPTPP applicant Britain.

While talks to enter the WTO went on for more than a decade, Wang said she did not think it would take that long for the CPTPP, but added it was hard to give a timetable.

"I think if the political obstacles can be reduced as much as possible, I don't believe talks will go on for decades."

(Reporting by Jeanny Kao, Yimou Lee and Ben Blanchard; Editing by William Mallard)

Changing global order poses fresh challenges for trade deals

Multilateral trade agreements find themselves in increasingly choppy waters. Protectionism has been growing and tensions between the West and China have ratcheted higher. So, will deals to free up trade have a future?



Trade deals are becoming more complex as partners no longer contend with merely cutting tariffs

The history of trade deals is a sea of acronyms…GATT, WTO, CAI, RCEP, TTP, NAFTA. But grand-scale multilateral agreements to promote global trade look set to become increasingly complex. Derek Scissors, a scholar at the American Enterprise Institute thinks reaching a deal on trade these days is "more complex than the tariff-cutting of a generation ago."

He told DW that the impact of free trade pacts on particular industries and groups in societies was harder to assess, causing more domestic opposition. "Similarly, greater financial leveraging has made many economies less capable of adjusting to new competitive pressures," he said, adding that the United States widening trade deficit with the rest of the world also changed the global playing field.

"Trade liberalization has been supported by the dollar as global currency and the US providing liquidity through trade deficits. American hostility toward higher trade deficits and questions about the future role of the dollar make expanding trade riskier," he noted.

The rise of China

The single biggest factor behind the changing international trade landscape has been the rise of China. Twenty years ago, China joined the WTO after 15 years of talks and there was a belief in Europe and the US that trade would help open up the economy and bring about a new era of liberalism in China.

Easier trade conditions helped China become the world's second-biggest economy, but didn't bring political reform. Instead, China's communist leadership has tightened its grip and China operates large trade surpluses with the US and Europe. Two decades on, the talk in the West is of systemic competition with China and constant calls for level playing fields.

As a major exporter, China sees trade deals like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) as means to boost its economic role in Asia. Beijing led the RCEP regional trade deal last year, when China and 14 other countries in the Asia-Pacific region signed the pact in November. It covers 2.2 billion people and 30% of the world's economic output. Now, there are reports that China is even pushing ahead with behind-the-scenes talks to join the CPTPP.


Watch video 01:52 Leaders of 11 countries ink huge trade deal

This is ironic as the CPTPP evolved out of the Trans-Pacific Partnership (TPP), a deal that originally aimed to exclude Beijing and cement US economic power and trade ties in the Asia-Pacific region. However, Donald Trump pulled the US out of the TTP and it fell apart until it was revived as the CPTPP.

Officials from Australia, Malaysia, New Zealand and other nations have held technical talks with Chinese counterparts on details, Bloomberg reported recently.

Ultimately the terms of the CPTPP could prove troublesome for China. The CPTPP has rigorous requirements, particularly its provisions on labor, procurement, state-owned enterprises, state support and subsidies, e-commerce and cross-border data transfer.

China would need the agreement of all 11 CPTPP members, including Australia, Canada and Japan, with whom it is in conflict

Politics trumps trade

Australia's membership of RCEP and its free trade agreement with China didn't stop China imposing tariffs on Australian barley, wheat, coal, wine, lobsters and lumber It also suspended ministerial-level strategic economic dialogue, after Canberra called for an investigation into the origin of the COVID-19 pandemic and criticized China for human rights abuses in Xinjiang province and Hong Kong.

Scissors argues China appears unwilling to "negotiate away" what it sees as state prerogatives. "The obvious example is that China's 'free' trade agreements do not allow foreign competition to harm state-owned enterprises. They are only 'free trade except for the state sector.'"

The tensions that have erupted between China and Australia recently would show, he said, that Beijing was stretching the definition of state interest further than that. "Countries negotiating with Beijing should understand they are negotiating conditional market access only, and China expects them to behave accordingly," said Scissor

Watch video 01:48 Australia-China relationship hits low point

Christina Otte, an expert on East Asia at the GTAI, told DW that concluding free trade agreements doesn't protect against punitive tariffs and other such actions, as the example of Australia shows.

"But they can still be a sensible instrument to encourage trade and set standards between the states that are party to the contract. And the fact that in the form of the RCEP a free trade deal was concluded despite all the political differences in Asia means that the onus to act is now on Europe," Otte said.
European sanctions

Geopolitical concerns also played a role in freezing the EU-China Comprehensive Agreement on Investment (CAI). The European Parliament voted to shelve the pact, which had been heavily promoted by Germany, after Beijing introduced sanctions on EU lawmakers earlier this year.

The tit-for-tat sanctions were imposed after the 27 EU countries approved sanctions on Chinese officials running internment camps in the western, Muslim-majority Chinese region of Xinjiang.

US Trade Representative Katherine Tai has called for a strategic rethink of global trade policies that had failed to parlay increased trade activity into advances for workers and the environment.

"The use of force labor is probably the crudest example of the race to the bottom in global trade," Tai told reporters in Washington this month, in reference to China's use of forced labor in the Xinjiang provin

Watch video 05:09 Is China a friend or foe?

Jürgen Friedrich, chairman and CEO of German state-run trade promotion group, Germany Trade & Invest (GTAI), stresses, though, that geopolitics are always a factor in trade agreements, calling it "a fact of life." He told DW that it was debatable whether, from the larger historical perspective, these times were even "particularly contentious."

"In any case, the German government, including those of us who work for its economic arms, believes in international, negotiated, win-win solutions in both commerce and politics," he said, adding that the government is convinced "this approach will prevail in the long term."

UK formally signs up to trans-Pacific trading bloc

UK IS AN ISLAND SO ARE THE PACIFIC NATIONS

Phil HAZLEWOOD
Sun, July 16, 2023 

UK Business and Trade Secretary Kemi Badenoch said the CTPP deal was a great opportunity

The UK government on Sunday hailed what it said was its biggest trade deal since Brexit, as it formally signed a treaty to join a major Indo-Pacific bloc.

Business and Trade Secretary Kemi Badenoch signed the accession protocol for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand.

It makes the United Kingdom the first new member and first European nation to join the bloc since it was created in 2018.

The CPTPP comprises the UK's fellow G7 members Canada and Japan, plus long-standing allies Australia and New Zealand, alongside Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam.

It has been seen as a bulwark against Chinese dominance in the region, although Beijing has applied to join.

Badenoch said in an interview with Sky News that the deal showed the UK "looking outwards towards the world".

"We have a seat at the table in the fastest-growing region, countries are queuing up (to join)," she added.

"I'm really excited that we've brought home the biggest trade deal since we left the European Union."

London has been pushing a "Global Britain" strategy since formally severing nearly 50 years of ties with its nearest neighbours in the European Union three years ago.

Sunday's signing at a CPTPP meeting in Auckland was the formal confirmation of the agreement for UK membership after nearly two years of talks.

The government said it will cut tariffs for UK exports to CPTPP countries, which with UK membership will have a combined GDP of £12 trillion ($15.7 trillion), and account for 15 percent of global GDP.

It will give British businesses trade access to a market of more than 500 million people and access to the wider region, it added.

The agreement is expected to come into force in the second half of next year, after parliamentary scrutiny and legislation.

- Mixed reception -

UK accession to the CPTPP -- the successor to a previous trans-Pacific trade pact that the United States withdrew from in 2017 under president Donald Trump -- has, however, been met with a mixed reception.

For Brexit supporters, it has been seen as a chance for the UK to join other trading blocs with faster-growing economies than those closer to home -- and boost the country's international geopolitical and economic clout.

But critics say it will struggle to compensate for the economic damage sustained by leaving the 27-member EU -- the world's largest trading bloc and collective economy.

The UK already has trade deals with 10 of the 11 other CPTPP members, and analysts estimate the eventual economic boost to the country is £1.8 billion ($2.2 billion) -- a 0.08 percent annual GDP increase.

The government's spending watchdog, the Office for Budget Responsibility, in April forecast that London's Brexit deal with Brussels will reduce long-term productivity by 4.0 percent compared to when the UK was a member.

A key UK government pledge to sign a prized free-trade deal with the United States remains elusive, and Badenoch assessed the chances of securing one currently were "very low".

"It all depends on the administration... Lots of countries have been looking to have a free trade agreement with the US, including us, but for now, they've said that's not something that they want to do," she added.

In the absence of a deal, the UK has signed trade agreements with US states North Carolina, South Carolina and Indiana.

It is also seeking closer trading partnerships with US powerhouses California and Texas, and is in discussions with Utah and Oklahoma.

LA REVUE GAUCHE - Left Comment: Search results for CPTPP 

President Tsai seeks Canada's support for Taiwan's CPTPP bid

03/02/2023 

President Tsai Ing-wen (first right) and Canada's representative to Taiwan Jim Nickel (third left) hold a talk at the Presidential Office in Taipei Thursday. CNA photo Mar. 2, 2023


Taipei, March 2 (CNA) President Tsai Ing-wen (蔡英文) on Thursday expressed hope that Canada would support Taiwan's bid to join a cross-national trade pact, during a meeting with the country's representative to Taiwan Jim Nickel.

Taiwan's ascension to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would allow Taiwan and Canada to work together to promote economic prosperity, as the two nations have complementary economies, Tsai said.

Taiwan applied in September 2021 to join the CPTPP, which is one of the world's biggest trade blocs, representing a market of 500 million people and accounting for 13.5 percent of global trade.

Any new ascension to the trade pact requires the unanimous support of its signatories, which currently include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Hence, the government is keen to join the trade bloc ahead of China, which submitted its CPTPP application less than a week prior to Taiwan, to avoid a situation where Beijing could veto Taiwan's ascension.

Taiwan's Office of Trade Negotiations said in January that the government would seek the approval of the CPTPP's member states to establish "a working group" in 2023 to review Taiwan's application.

The trade bloc's commission is currently in negotiations with the United Kingdom, which submitted a formal request to join the trade bloc in February 2021.

Meanwhile, Tsai expressed hope that Taiwan and Canada would further broaden bilateral collaboration with the help of Nickel, who took up the post of executive director of the Canadian Trade Office in Taipei last September.

In his remarks, Nickel did not touch upon the topic of the CPTPP, according to a press release issued by the Presidential Office after the meeting,

The representative expressed hope that Canada could further deepen its trade and economic partnerships with Taiwan, especially in the areas of supply chain security, net-zero emissions, and digital transition.

At the same time, Nickel went on, Canada looked forward to strengthening its people-to-people ties with Taiwan through cultural, educational and parliamentary exchanges.


(By Teng Pei-ju)

Enditem/ASG

Mixed reception to UK unveiling trans-Pacific trade pact membership

Joe JACKSON
Fri, March 31, 2023 


The UK's announcement that it will soon join 11 other countries in a major Asia-Pacific trade partnership -- the country's biggest post-Brexit trade deal to date -- earned a mixed reception on Friday.

Britain will be the first new member since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was created in 2018, and the first European country in the bloc.

The trade grouping will include more than 500 million people and account for 15 percent of global gross domestic product once the UK becomes its 12th member, according to Prime Minister Rishi Sunak's office.

It said Britain's accession -- after 21 months of "intense negotiations" -- puts the country "at the heart of a dynamic group of economies" and is evidence of "seizing the opportunities of our new post-Brexit trade freedoms".

The development fulfils a key pledge of Brexit supporters that, outside the European Union, the UK can capitalise on joining other trade blocs with faster-growing economies than those closer to home.

But others have noted that such ventures will struggle to compensate for the economic damage sustained by leaving the EU, the world's largest trading bloc and collective economy.

"The impact on the UK economy from the UK joining the CPTPP will probably be fairly small," said Ashley Webb, of Capital Economics.

"Having said that, it may help to improve UK international relations and other countries' perceptions of the UK as a trading partner."

- 'Strategic' -

The CPTPP is the successor to a previous trans-Pacific trade pact that the United States withdrew from in 2017 under former President Donald Trump.

Its members include fellow Group of Seven members Canada and Japan, and historic UK allies Australia and New Zealand.

The remaining members are Chile, Mexico and Peru, along with Brunei, Malaysia, Singapore and Vietnam.

Despite rising geopolitical tensions, in particular with Canberra, China formally applied to join the bloc in 2021.

All existing members must reach a consensus for a new country to enter the CPTPP. London is set to formally join later this year following nearly two years of talks.

In Tokyo, Japanese government spokesman Hirokazu Matsuno welcomed the expansion.

"The UK is a global strategic partner and also an important trading and investment partner," he told reporters.

Its accession "will have great meaning for forming a free and fair economic order", he added.

Matsuno said Japan would need to examine whether China and any other nations hoping to join can meet the required conditions, and would also consider the "strategic viewpoint" and Japanese public opinion.

In Britain, two hawkish former leaders of Sunak's ruling Conservatives said London should use its membership to block Beijing's bid.

"It's essential that any idea of Chinese accession is ruled out (and) I'd expect the British government to oppose any such proposal," former prime minister Liz Truss tweeted.

- 'Longer-term benefits' -

Since Britain quit the EU's single market in 2021, it has been trying to strike bilateral deals to boost its international trade -- and flagging economy.

It has so far inked agreements with far-flung allies including Australia, New Zealand and Singapore, and is in talks with India and Canada.

However, a prized pact with the United States remains stalled.

King's College London economist Jonathan Portes noted the CPTPP was not a "deep multilateral agreement" like its predecessor or the EU, so its impacts in lowering trade barriers would be "quite small".

"Joining CPTPP may have longer-term benefits, both economic... and geopolitical," he told AFP. "But of course you can't directly quantify those at this point."

Analysts estimate the eventual UK economic boost is £1.8 billion ($2.2 billion) -- a 0.08 percent annual GDP increase.

Meanwhile, the Office for Budget Responsibility has forecast Brexit will reduce long-term UK growth by about 4 percent.

Scotland's devolved government, which wants to join the EU as an independent country after leaving the UK, seized on the difference.

"It is clear that this agreement will not make up for the damaging impact of the UK leaving the EU and forfeiting access to the European single market," its trade minister Richard Lochhead said.

However, the National Farmers Union was among those to applaud the deal, saying it "could provide some good opportunities to get more fantastic British food on plates overseas".

burs-jj/ea

 

Explainer: Asia-Pacific closes in on world's biggest trade deal

Martin Petty

Reuters13 November 2020

ASEAN Summit in Hanoi

By Martin Petty

(Reuters) - Fifteen Asia-Pacific economies are set to conclude talks on Sunday and sign what could become the world's largest free trade agreement, covering nearly a third of the global population and about 30% of its global gross domestic product.

The Regional Comprehensive Economic Partnership (RCEP), which could be approved at the end of a four-day ASEAN summit in Hanoi, will progressively lower tariffs and aims to counter protectionism, boost investment and allow freer movement of goods within the region.

A U.S.-China trade war and U.S. President Donald Trump's "America First" retreat from predecessor Barack Obama's "pivot" towards Asia has given impetus to complete RCEP, which is widely seen as Beijing's chance to set the regional trade agenda in Washington's absence.

The U.S. election win by Democrat Joe Biden, however, could challenge that, with the former vice president signalling a return to stronger U.S. multilateralism.

WHAT IS RCEP ALL ABOUT?

RCEP includes China, Japan, South Korea, Australia, New Zealand and the 10 members of the Association of South East Asian Nations (ASEAN) - Brunei, Vietnam, Laos, Cambodia, Thailand, Myanmar, Malaysia, Singapore, Indonesia and the Philippines.

India was involved in earlier discussions but opted out last year.

One of the deal's biggest draws is that its members already have various bilateral or multilateral agreements in place, so RCEP builds on those foundations.

It will allow for one set of rules of origin to qualify for tariffs reduction with other RCEP members. A common set of regulations mean less procedures and easier movement of goods.

This encourages multinational firms to invest more in the region, including building supply chains and distribution hubs.

WHAT IS ITS GEOPOLITICAL SIGNIFICANCE?

The idea of RCEP was hatched in 2012 and was seen as a way for China, the region's biggest importer and exporter, to counter growing U.S. influence in the Asia-Pacific under Obama.

Negotiations for a U.S.-led "mega-regional accord" then known as the Trans-Pacific Partnership (TPP) - Obama's signature trade deal - were making strong progress and China was not among its 12 members.

Momentum behind RCEP grew when Trump withdrew the United States from the TPP in 2017, taking away its main architect and two-thirds of the bloc's combined $27 trillion GDP. It was renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and it includes seven RCEP members.

As the key source of imports and main export destination for most RCEP members, China stands to benefit and is well positioned to shape the trade rules and expand its influence in the Asia-Pacific, which Obama had openly sought to prevent.

HOW IS RCEP DIFFERENT TO CPTPP?

RCEP focuses heavily on slashing tariffs and increasing market access but it does not harmonise to the same extent as CPTPP and is seen as less comprehensive.

It requires fewer political or economic concessions compared with CPTPP and RCEP has less emphasis on labour rights, environmental and intellectual property protections and dispute resolution mechanisms, although it does include provisions on competition.

RCEP's market size is nearly five times greater than that of the CPTPP, with almost double its annual trade value and combined GDP.

WILL A BIDEN PRESIDENCY CHANGE ANYTHING?

Biden is signalling a swing back to the multilateral approach of the Obama administration, but it might be premature to talk about trade deals given the huge challenges awaiting him on the domestic front, and risk of upsetting unions that helped get him elected.

His trade priorities are expected to focus on working with allies to jointly exert pressure on China over trade and to push for changes at the World Trade Organization. Rejoining the CPTPP in its current form might not be on the horizon soon.

The trade unions and progressives that backed Biden's election have previously been sceptical about free trade agreements. He has included elements of those in his transition team and may be advised to maintain protections on vulnerable industries like steel and aluminium.

However, indications of Biden's intent to reconnect in the Asia-Pacific would be broadly welcomed, including as a counterbalance against China.

UK Joins Pacific Trade Deal, Sees ‘Very Low’ Chance of US Pact



Isabel Reynolds and Wei Zhou
Sun, July 16, 2023

(Bloomberg) -- The UK signed a treaty to join a Pacific trade deal on Sunday, becoming the first new member since the framework came into force and shifting attention to a list of other applicants led by China.

Business and Trade Secretary Kemi Badenoch defended the deal as meaningful for the UK even though it already had trade agreements with most of the countries involved, and internal projections show a minimal economic impact.

“It will make a significant amount of difference,” she said on Sky News from Auckland. “We have a seat at the table in the fastest growing region.”

Badenoch also said that the chances the UK can ink a trade deal with the US are “very low.” The ability to ink such agreements, particularly with the world’s largest economy, was a major part of the UK’s Brexit campaign.

“The US is not carrying out any free trade agreements with any country,” Badenoch said on Sky. “Lots of countries have been looking to have free trade agreements with the US, including us, but for now they said that’s not something they want to do, and we need to respect that.”

Badenoch signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in New Zealand, the government said in a statement. New Zealand is chairing a meeting attended by 11 trade ministers and delegations from CPTPP economies.

Formerly known as the TPP, the agreement at one time included the US and was seen as a way of containing China’s growing influence in the Asia Pacific. Former President Donald Trump pulled the US out of the pact in 2017 and China made its application to join in 2021.

CPTPP-owned businesses employ 1% of UK workers, and membership is expected to “turbocharge investment” further, according to the UK government. British whiskey and cars are among 99% of current UK goods exports to CPTPP that’s set to be eligible for zero tariffs, it added.

“The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation and technology,” Ian Stuart, chief executive officer at HSBC UK, said in the statement.

China Next

Beijing is next in sequential order to enter negotiations as the CPTPP seeks to expand, followed by Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. But China’s accession would be divisive given tensions with existing members including Japan, Australia and next year’s chair, Canada.

“There was no specific discussion on any of the individual aspirants,” New Zealand Trade and Export Growth Minister Damien O’Connor said in Auckland at a press conference on Sunday.

The 12 CPTPP members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the UK and Vietnam. The bloc, which is home to 500 million people, would account for 15% of global GDP with the inclusion of the UK joins, according to the International Monetary Fund.

Critics Slam Lobbying by Tech Giants in Indo-Pacific Talks

While the US last year established a rival pact known as the Indo-Pacific Economic Framework for Prosperity, it doesn’t include provisions for market access. China is not among the 14 members negotiating that agreement.

--With assistance from Chris Kay.

SEE 

https://plawiuk.blogspot.com/2023/07/uk-formally-signs-up-to-trans-pacific.html

Britain to join Indo-Pacific trade bloc in biggest trade deal since Brexit

PUBLISHED FRI, MAR 31, 2023

Sumathi Bala

KEY POINTS

On Friday, the government said it will join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership, unlocking access to a region with a total GDP of £11 trillion ($13.6 trillion).

The U.K. said this was the country’s largest post-Brexit trade deal and makes it the first European nation to join the CPTPP.

Prime Minister Rishi Sunak said the deal puts the U.K. at the center of a dynamic and growing group of Pacific economies.


A Union Jack flag flies near the Elizabeth Tower, commonly referred to as Big Ben, at the Houses of Parliament in central London, U.K., on March 29, 2017.

Britain struck a historic trade deal to join a vast Indo-Pacific trade bloc after nearly two years of intense negotiations.

On Friday, the government said it will join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership, unlocking access to a region with a total GDP of £11 trillion ($13.6 trillion).

The U.K. said this was the country’s largest post-Brexit trade deal and makes it the first European nation to join the CPTPP, since it came into force in 2018.

Prime Minister Rishi Sunak hailed the deal and said it puts the U.K. at the center of a dynamic and growing group of Pacific economies.

“We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms,” he said in a statement. “British businesses will now enjoy unparalleled access to markets from Europe to the south Pacific.”

The trade bloc spans Canada, Mexico, Japan, Australia, Vietnam, Singapore and Malaysia, among others. The agreement is expected to be formally signed by year end, after final approval from Parliament and the 11 member states.

The trade pact evolved out of the now-defunct Trans-Pacific Partnership, or TPP, that originated in the United States but fell apart after former President Donald Trump scrapped U.S. involvement.

Trade benefits

Britain said the deal will cut tariffs on exports of food, drink and cars, and will grant access to a market of around 500 million people and will be worth 15% of global GDP once the UK joins the trade bloc.

The U.K. estimates joining the CPTPP will boost its economy by £1.8 billion in the long term and lift wages by £800 million compared with 2019 levels.

The trade secretary, Kemi Badenoch, said the deal sends a “powerful signal” that Britain is using its “post-Brexit freedoms to reach out to new markets around the world and grow our economy.”

Natalie Black, the U.K.’s trade commissioner for Asia Pacific, called it a “progressive deal” for Britain.

“This deal is, yes, about economic performance today. But is very, very much about economic performance in the future,” she told CNBC’s “Squawk Box Asia” on Friday.

“This is the part of the world that is going to drive economic growth, and also drive the rules of the road of trade going forward. We want to be part of those discussions.”

Still, it remains to be seen how much the deal actually benefits Britain’s growth prospects. Based on the government’s own estimates, the deal will raise long-term domestic GDP by just 0.08%, which will have little impact to offset European trade losses as a result of Brexit.

Deborah Elms, executive director of the Asian Trade Centre, said it’s very hard to calculate these trade figures, especially based on existing trade flows.

“If you are a U.K. company, you probably have limited existing trade flows to many of the CPTPP countries like Australia, New Zealand, Japan and Singapore, ” she told CNBC’s “Capital Connection.” “Simply, because the distance is far and because you used to be very tightly enmeshed with the European Union.”

The trade flows are always “under what you actually are likely to see in the reality as businesses recognize the benefits and start to use a trade agreement like the CPTPP,” she added

High bar for entry

Still, negotiations to finalize the trade deal, haven’t always been easy. An impasse between Britain and Canada over agricultural market access had to be smoothed over to remove the final hurdle in closing the agreement.

“This has been a complex deal to negotiate,” acknowledged Black. “We’ve been negotiating across multiple time zones across a range of complex issues. And they’re not always straightforward. But, ultimately, all parties have agreed that the U.K. is a great new member of CPTPP.”

China has also applied to join the trade bloc but has not made as much progress as the U.K.

There are many “aspirant economies” who have either “declared that they want to formally join or we know are interested in joining,” said Black.

While the trade commissioner said it “wouldn’t be appropriate” to comment on individual economies, she noted the barriers to joining the trade bloc are very high.

“It’s really up to those who come behind us to make sure they meet the expectations of members of having high quality applications.”

Free trade deal is a major threat to UK public health, warn experts

New deal will make it harder for the UK to regulate tobacco and alcohol or ban products like those containing harmful pesticides

Peer-Reviewed Publication

BMJ

The UK’s decision to join one of the world’s largest free trade agreements, known as the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP), poses a major threat to UK public health, warn experts in The BMJ today.

In acceding to the CPTPP, the government hopes to boost trade, improve economic growth, and strengthen the UK’s strategic position as a global rule setter. 

But Courtney McNamara and colleagues argue that free trade deals have serious and wide ranging implications for public health and policy making, as they commit countries to certain regulatory and legal obligations. 

As such, they call on the government to commission a health impact assessment before signing takes place later in 2023 to evaluate the potential benefits and harms of this deal.

The CPTPP poses several threats to public health in the UK, they explain. For example, it is likely to make it more difficult to enact policies to cut consumption of tobacco, alcohol, and unhealthy food and drinks through clauses that allow foreign corporations to contest any such regulations.

It also contains provisions that effectively rule out a precautionary approach to food safety, meaning that bans on products like those containing harmful pesticides can be challenged.

And while some workers might benefit from a boost in exports and demand, which might increase wages, they argue that those working in industries that are undercut by cheaper imports and unable to compete are likely to experience economic insecurity and potentially job losses, which carry huge consequences for health.

The UK government has said the agreement will not mean lower health or food standards in the UK, and the authors acknowledge that the gross domestic product (GDP) boosting consequences of a free trade agreement could conceivably have positive health effects.

Based on the UK government’s own calculations, however, they point out that the economic case for joining the CPTPP “amounts to no more than a 0.08% increase in the country’s GDP over a 15 year period.”

More problematically, the government’s calculations fail to account for the implementation costs of joining the agreement, they add. “To our knowledge, no national evaluation has been done to account for implementation costs with respect to changes in regulatory and dispute settlement rules.”

“If a priority of the government is to do no harm, a commitment made explicit during Brexit negotiations, then it should take account of the health implications of its trade policies,” they write.

“Even if it is unlikely that, given the government’s poor track record on public health, the findings would influence its decision to sign, evidence produced by the assessment will still be extremely valuable by pointing to populations at risk and communities whose health might be safeguarded during the agreement’s implementation,” they add.

If the government fails to undertake a health impact assessment, it will fall to public health scholars, professionals, and advocates to mobilise and act to undertake this important work, they conclude.

[Ends] 

---

JOURNAL

The BMJ

DOI

10.1136/bmj-2022-073302 

METHOD OF RESEARCH

Content analysis

SUBJECT OF RESEARCH

People

ARTICLE TITLE

The CPTPP trade deal is a major threat to public health and warrants a health impact assessment

ARTICLE PUBLICATION DATE

12-Apr-2023

BUILD BACK BETTER WILL USA JOIN

UK to apply to join free trade pact with nations on other side of world

Liz Truss to seek to join 11-nation trans-Pacific partnership, whose nearest member is 3,000 miles away

COMRADES TO BE

Liz Truss elbow bumps Vietnam’s minister of industry and trade, Tran Tuan Anh, after signing a free trade agreement in Hanoi in December. Photograph: Nhac Nguyen/AFP/Getty Images

PA Media
Sat 30 Jan 2021 23.07 GMT


The British government is to formally apply to join a mammoth free-trade pact that includes Australia, Canada, Japan and New Zealand now that it has left the EU.

Liz Truss, the international trade secretary, will ask to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) when she speaks to ministers in Japan and New Zealand on Monday.


Negotiations are expected to start later this year, Truss’s department said, in announcing the move on the anniversary of the UK’s formal departure from the EU.

Joining the CPTPP will cut tariffs in trading with its members. UK trade with the group last year was worth £111bn, according to the Department for International Trade.

The pact’s 11 members are:


Australia.


Brunei.


Canada.


Chile.


Japan.


Malaysia.


Mexico.


New Zealand.


Peru.


Singapore.


Vietnam.

Boris Johnson said: “One year after our departure from the EU, we are forging new partnerships that will bring enormous economic benefits for the people of Britain.

“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade.”

British businesses reacted warmly to the plans, with the Federation of Small Businesses (FSB) saying the move would help firms “thrive and succeed more than ever”.

But the shadow international trade secretary, Emily Thornberry, said Labour will closely scrutinise any pact and called on the government to consult the public.

“Like any other trade agreement, the advantages of joining the CPTPP will have to be assessed once we see the terms on offer,” she said.

“At present, Liz Truss cannot even guarantee whether we would have the right to veto China’s proposed accession if we join the bloc first.

“More generally, people will rightly ask why we have been through five years of debate in Britain over leaving a trade bloc with our closest neighbours only to rush into joining another one on the other side of the world without any meaningful public consultation at all.”

Truss said joining the pact would “create enormous opportunities for UK businesses that simply weren’t there as part of the EU”.

The Confederation of British Industry president, Lord Bilimoria, said: “Membership of the bloc has the potential to deliver new opportunities for UK business across different sectors.”

Sue Davies – head of consumer protection and food policy at Which? – said ministers must ensure joining CPTPP “will bring clear consumer benefits” and will not dilute standards.

Opinion

World has moved on from US, EU’s drug monopoly. India and China are changing IP regulations

Even without an IP waiver from the WTO, China and India are leading the challenge to the West’s vaccine monopoly.

HANNAH SWORN
3 January, 2022 

Vials of Zydus Cadila's Covid-19 vaccine ZyCoV-D | Photo: zyduscadila.com

Twenty years after the HIV/AIDS crisis, the world faces a new pandemic but a familiar problem. Technology needed to produce life-saving drugs remains fiercely guarded by the Western pharmaceutical companies who develop it. But there are signs that their tight grip may be loosening.

In the mid-1990s, a course of anti-retroviral drugs (ARTs) was priced at US$10,000. This was an impossible sum in Southeast Asia and Sub-Saharan Africa, where more than 90 per cent of new HIV infections in 1995 were recorded. But governments of developing countries were blocked from supplying their HIV-affected citizens with affordable, generic alternatives by strict global intellectual property (IP) regulations.

Patents: power and regulations

In the negotiation of IP regulations, the world’s most powerful states use their economic clout to establish rules that disproportionately benefit them. Introduced at the behest of the United States and European Union, stringent IP standards protect high-value patented drugs developed by Western pharmaceutical companies.

Eventually recognising that HIV/AIDS could destabilise entire regions of the globe, the US and EU backed the 2001 World Trade Organisation (WTO) Doha Declaration. This allowed governments to overrule IP regulations in the interest of public health. Facing competition from generic versions, the price of patented ARTs dropped to US$700 a year.

But after Doha, Western governments reverted to their old ways. Unable to work through the WTO, these powers shifted to threats of sanctions and narrower trade agreements to extinguish the IP flexibilities provided by the declaration.

In 2021, most IP related to COVID-19 vaccines is owned by pharmaceutical giants based in the US and EU who have reaped tens of billions of dollars in sales. Struggling to access immunisations, just under four per cent of people in low-income countries are fully vaccinated.

This contrasts with the much higher 69 percent vaccination rate in high-income nations, an inequality that is prolonging the pandemic with new strains of the virus. Once again, developing countries are beseeching the WTO to waive IP protections. But the review process has been hamstrung for more than a year.

Also read: Govt panel recommends emergency use nod for Covovax, Corbevax

Big pharma vs generic drug makers

Drafted in 2015, the then Trans-Pacific Partnership (TPP) was a 12-member mega-regional free-trade agreement that would have required many less-developed signatories to increase IP protections — including for pharmaceuticals — beyond what was already mandated by the WTO.

The Anti-Counterfeiting Trade Agreement (ACTA) was another controversial and ambitious US-driven arrangement that would have allowed countries to seize in-transit shipments of generic drugs suspected of IP infringements.

The rules embodied in these agreements once again bestowed advantages on Western pharmaceutical companies, while generic drug manufacturers based in countries like India, Brazil and Thailand were restricted in what they could produce.

Fearing the loss of precious access to the US and EU’s enormous markets, developing countries were prepared to capitulate to these IP regulations, all the while arguing that open access to knowledge was necessary for education, public health and economic development in their countries.

But since the 1990s, a tiger has joined the table. China has now overtaken both the US and the EU in GDP (PPP), positioning it to influence global IP regulations. While China has been reluctant to directly challenge the economic system that enabled its rise, it has endorsed flexible IP regulations advocated by the developing countries who are its most important economic partners.

Also read: Govt panel recommends EUA for COVID-19 vaccines Covovax, Corbevax and anti-Covid pill molnupiravir

Rival camps in global IP

Trends in recent trade agreements suggest that the US-EU regulatory hegemony may not be as robust as was presumed. Beijing has placed ASEAN at the centre of the Regional Comprehensive Economic Partnership (RCEP), a mega-regional trade agreement rivalling the TPP that does not include the US and EU.

The agreement, which will enter into force in a few weeks on 1 January 2022, has emerged with flexible, development-friendly IP provisions that contrast starkly with the TPP. When in 2017, Donald Trump withdrew the US from the TPP, RCEP became the world’s biggest free-trade agreement. Left to pick up the pieces, the remaining TPP members unveiled the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) a year later.

The CPTPP eliminated all but one of the original IP chapters — including those related to pharmaceuticals — while leaving the rest of the agreement intact. Suddenly, the global landscape of IP regulation appeared very different.

Thailand has now expressed interest in joining the CPTPP, citing a reduced threat to access to medicines, and China formally filed a bid to join in September 2021. If the CPTPP advances in its current form, global IP regulations will be even further cemented away from the US and EU’s preferences, giving generics manufacturers greater scope to produce affordable medicines.

Also read: SII gets DCGI nod to manufacture drug substance, test it for developing jab against Omicron

Asia steps up its pharmaceutical game

Even without an IP waiver from the WTO, vaccine competition is heating up as Asia’s pharmaceutical companies leverage high demand and an injection of funds into R&D to put alternative immunisations on the market. With the second and third highest number of COVID-19 vaccine developers in the world, China and India are leading the challenge to the West’s vaccine monopoly.

While Chinese vaccines suffer bad publicity from questionable efficacy rates, generics giant India has seen Baharat Biotech’s Covaxin recently obtain WHO emergency approval and has another immunisation hot on its tail from Zydus Cadila.

South Korea and Japan are investing billions of dollars in local vaccine development, with multiple candidates in clinical trials in both countries. Another high-profile generics manufacturer, Thailand, has two promising vaccines in the pipeline — one mRNA and another protein-based — as well as two nasal sprays beginning human trials.

Asia’s home-grown vaccines could drive down prices globally by increasing supply. They could also produce valuable spillover effects for the development of other innovative drugs, rendering Asian firms more competitive against their Western counterparts in the long run.

A fractured Western IP camp

The West’s IP dominance has not only been weakened by the changing balance of power, but also from within. The US and EU’s powerful partnership came under strain as the latter found it increasingly difficult to achieve agreement between the European Commission and European Parliament on IP issues.

In 2012, the European Parliament rejected ACTA, sealing its political death. Even the US’ special partner, the United Kingdom, has begun negotiations to join the CPTPP, further indicating the pact’s viability with countries that have traditionally been firmly in the US and EU’s IP camp.

But the trajectory of IP regulations is far from settled. Property protections are key for encouraging innovation, especially given the high R&D costs for pharmaceuticals. As countries develop and produce more innovations, they are likely to demand higher IP standards.

China is shifting from a dependence on trade in goods toward high-technology sectors that benefit from more stringent IP regulations. If history repeats itself, developing countries may once again find themselves at the mercy of these great power interests.

Hannah Elyse Sworn is a Senior Analyst at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

This article was previously published by the RSIS and first published by 360info™ under Creative Commons. It has been reproduced here with permission.