The Trans-Pacific Partnership without the US may seem like Hamlet without the prince. When talks began in 2010, it was the US that fashioned the TPP by joining an existing trade deal and hugely expanding it, eventually recruiting countries whose economies make up about 40 per cent of global gross domestic product.
It was also the US that drove forward many of the provisions, including protecting cross-border data flows and constraining trade-distorting state-owned enterprises, that mark out the TPP from earlier preferential trade agreements. Nonetheless, following Donald Trump』s decision this year to pull the US out of the deal, the remaining 11 countries at the weekend decided to go ahead on their own.
The consequences of the US president』s go-it-alone approach has been evident throughout his trip to Asia, which comes to an end on Tuesday. The trip has featured plenty of sweeping rhetoric about rebalancing trade across the pacific.
Substantive agreements or even statements on a way forward have been absent, however. The reason is simple. Once again, in his marquee Asian trade speech, Mr Trump emphasised his key priority: reducing US trade deficits. His preferred tools are bilateral agreements, in which the US would usually be the stronger party, rather than plurilateral ones in which the US is but one among many. Unsurprisingly, US trade partners are not lining up to be pushed around.
Even so, it was never a given that the other parties to the TPP would push on regardless. Greater access to the huge American market was always one of the attractions that persuaded countries such as Japan to make difficult concessions to liberalise their own industries — in Japan』s case, to put its cosseted farmers under more pressure by allowing in higher quotas of imports.
Indeed, at the end of last week it seemed that the deal had stalled at the last minute because of Canadian reluctance to join in. Canada』s ambivalence about the deal is easy to explain. Not only had it never liked some of its provisions, including stricter rules enforcing intellectual property rights, or IPR, but — along with Mexico — Canada is in the middle of a politically-charged renegotiation of the North American Free Trade Agreement. Ottawa can be forgiven for not embarking on a new initiative that might cut across its existing talks.
In the end, Canada agreed to come along. It managed to change the name of the deal to the rather fluffier, if more unwieldy, Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and to take out some of the IPR provisions it disliked. As it happens, this is probably a positive development. IPR agreements are best kept out of such agreements, not least because they often do as much to restrict trade as to set it free.
Renegotiating the deal without the US will not be a simple matter of doing a 「find and delete」 through the document. It relies on a web of bilateral trade-offs to construct the whole. Still, the fact that the remaining 11 are willing to try is a positive development.
Perhaps the most useful way they could proceed is to assume that, one day, sanity will return to Washington』s trade policy and the US can rejoin. Hamlet without the prince may just about be worth watching. After all, Tom Stoppard constructed an acclaimed play — albeit a comedy — around the doings of Rosencrantz and Guildenstern, two of the minor characters. But the narrative will make far more sense with the central character back in place.