DEPA

The Final ATC Talking Trade

The Final ATC Talking Trade

It was an exciting time to be in the region.  Governments were enthusiastically signing up to a wide variety of trade agreements.  For example, Laos completed accession procedures to become the 158th member of the World Trade Organization (WTO).  We were in Bhutan for two workshops to support a renewed consideration of joining the WTO.  We also had several training activities in Timor Leste with members of Parliament and across the government to support accession to the WTO in conjunction with plans to become part of ASEAN.  Mongolia, the last WTO member to not have a free trade agreement (FTA), asked for training to complete an FTA with Japan. ASEAN itself was rapidly pursuing greater internal integration, with plans for the ASEAN Economic Community (AEC) pushed forward from 2020 to 2015.  It was also working on a range of agreements called ASEAN+1s with major powers in the region including Australia, China, India, Japan, New Zealand, and South Korea.  There was also a lot of activity to integrate Asia more closely to the rest of the world.  The first meeting in what would become the Trans-Pacific Partnership (TPP) took place in Singapore on the sidelines of APEC.  The TPP, as regular Talking Trade readers will recall, rapidly expanded and finally concluded in 2014.  The European Union was actively involved in working with members of ASEAN to create an eventual bloc-to-bloc agreement, starting with a bilateral FTA with Singapore.

Missing in Action: Trade Secretariats

Missing in Action: Trade Secretariats

Secretariats, or a permanent management structure, play a critical role in the delivery and implementation of international agreements including trade deals. They provide the backbone to administer the day-to-day functions of keeping such pacts alive and ensuring that parties stick to their obligations. Secretariats come in all shapes, sizes and levels of formality. Running an institution by informal committees alone can be a recipe for allowing members to shirk their implementation commitments. It is highly likely that many of the benefits of trade agreements will go unrealized. Countries in the region are signing on to a host of often overlapping free trade agreements (FTAs), creating a so-called “noodle bowl” effect in trade parlance; but a number of them have no permanent structures in place to monitor the agreements. Almost a year after entering into force, the Regional Comprehensive Economic Partnership (RCEP), despite having provisions requiring the creation of a Secretariat as the very first order of business, has yet to set up one.

Congressional Testimony: Trade Policies in Asia

Congressional Testimony: Trade Policies in Asia

The trade and economic landscape in Asia is rapidly evolving. While there are many activities that I could mention, I will focus my testimony today on four regional trade arrangements: the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP); the Regional Comprehensive Economic Partnership (RCEP); a set of digital trade deals known as DEPA or DEAs; and the upcoming American-led Indo-Pacific Economic Framework (IPEF). I will attempt to explain how and why these agreements matter for Asia and describe some of the implications of this evolving regional architecture for the United States. I will conclude with a few brief suggestions about how craft an IPEF that best fits into a complex economic landscape. Let me begin with the CPTPP. The CPTPP came into force in late December 2018 and now has eight active members: Australia, Canada, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam. The UK is in the middle of accession talks and hopes to be part of the group by the end of this year. Three additional formal letters of application were received last fall, from China, Taiwan, and Ecuador. South Korea’s outgoing government pledged to submit an accession request this month. There are three important items on the CPTPP agenda for this year: members must review the agreement; conclude accession negotiations with the UK; and decide on a process for addressing pending applications.

Latin America: A Key Stakeholder in Asia Pacific Trade?

Latin America: A Key Stakeholder in Asia Pacific Trade?

The participation and engagement of Latin American countries in multiple economic integration efforts within the Asia-Pacific means that they will become key partners and stakeholders in the development of a regional trade infrastructure that has the potential to create more open, resilient and inclusive trade outcomes in a post-Covid environment. However, increased political uncertainty and structural obstacles will determine the depth and impact of that role.

China Applies to Join DEPA

China Applies to Join DEPA

Trade watchers have had two important pieces of news this week. First, Regional Comprehensive Economic Partnership (RCEP) has enough members on board to bring the agreement into force on January 1, 2022. Note that the initial membership includes 10 of the 15 signatories: Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, and Vietnam. (The remaining members will become active participants 60 days after they have completed domestic level ratification procedures and submitted their letter to the ASEAN Secretariat.) Over all the years of negotiations and the time spent moving from substantial conclusion to signature to approval at the domestic level inside member governments, there has been repeated skepticism over whether or not RCEP would ever see the light of day. As a result, companies have been quite slow to get ready. With the actual launch less than 60 days away, it is time to focus. Firms should be rapidly preparing to use the agreement now. The second piece of trade news, however, was an even bigger bombshell. China officially asked to join the Digital Economy Partnership Agreement (DEPA). This agreement is only recently in force between the three members Chile, New Zealand and Singapore. DEPA was originally designed by these three small open economies as a way to build consistency in approaches to the digital economy. The idea was to create a series of “modules.” Each module covered a specific topic such as paperless trading or Artificial Intelligence (AI). Some modules, particularly those like paperless trading or non-discrimination against digital products, have become a more regular feature embedded in many different types of agreements, and have stronger, more legally binding language in DEPA. Other modules, especially those on new and evolving topics like AI or digital identities, were designed to encourage cooperation between members.