Remaking The TPP Without The US: US Ag Exports To Japan Will Plunge

The US left the TPP when Trump took office. The world moved on. It's now the CPTPP. Some call it the anti-Trump pact.

US farmers are about to take a big export hit as the Trans-Pacific Pact, TPP moves on without the US. It's a new world order, and the US isn't involved.

Please consider Pacific states launch bold trade pact, shaping world order as America retreats.

Eleven countries are pressing ahead with the Comprehensive Agreement for Trans-Pacific Partnership (CPTPP), defying barely-disguised efforts by the Trump Administration to kill the treaty.

A vanguard of Japan, Singapore, Mexico, Australia, Canada, and New Zealand activated the treaty over the weekend, ripping down barriers to trade in almost all goods. It eliminates 18,000 tariffs, and slashes others in stages over coming years.

The great irony is that the US itself drafted much of the original text under the Obama Administration, aiming to ensure that Washington writes the rules of global trade and commerce in the 21st Century, not Beijing.

The pact opens up trade in services on the basis of equal treatment. It cuts the costs of customs clearance, rules of origin, and compliance to a minor friction.

The White House assumed that the TPP would wither on the vine without US impetus. Instead, long-standing US allies across the Pacific have brushed off pressure from Washington and forged ahead regardless with what is now known as the “anti-Trump pact”.

“America is the biggest loser,” says the Peterson Institute in Washington. The fall in food tariffs under the CPTPP means that US farmers will be undercut by exporters from Australia, Canada, and New Zealand in the lucrative Japanese market. Wheat from Canada will be $70 cheaper per metric tonne by 2020.

The latest twist is that Chinese officials have begun to explore the possibility of joining the pact that was supposed to exclude them, prompting a polite though wary riposte from the founding members.

Beijing is alarmed by clauses in the revamped Nafta deal for North America that gives the US an effective veto if either Canada or Mexico wish to sign a future trade deal with a “non-market economy”, clearly meaning China. Membership of the CPTPP would help to circumvent this legal clause. Precisely for this reason the Trump Administration would fight Chinese accession tooth and nail.

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