THE ROLE OF NON-TARIFF MEASURES IN ACHIEVING AEC BLUEPRINT 2025

The recent establishment of the ASEAN Economic Community (AEC) in 2015 was a landmark achievement in the ASEAN region’s economic integration agenda. Notably, the AEC is meant to facilitate the free flow of goods, services, and investments, as well as the freer flow of labor and capital. The AEC promotes integration, competitiveness, enhanced connectivity, sectoral cooperation, equitable outcomes, and global engagement for the ASEAN region. Hence, the AEC is the ASEAN region’s most valuable asset, as it encompasses not only economic growth but also the political, social, and cultural union of all member states.

Significant gains have been made under the AEC. For example, tariff rates have been nearly eliminated on 99% of goods traded in the ASEAN-6 countries (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand). The CLMV countries (Cambodia, Lao PDR, Myanmar and Vietnam) have also been making substantial progress. From 2010 to 2015, tariff rates in Vietnam were reduced to 0-5% on approximately 90% of tariff lines.

Although remarkable headway has been made, a lot more must be done to fully capitalize on the AEC’s potential. Non-tariff barriers (NTBs) to trade continue to maintain a strong presence in the ASEAN region – according to the World Trade Organization (WTO), there are close to 2,500 NTBs currently being enforced.

A recent publication by the EU-ASEAN Business Council (EU-ABC) has expressed great concern over issues regarding NTBs under the AEC. They identified five main problem areas, namely 1) import restrictions; 2) non-transparent & inconsistent customs processing practices; 3) regulatory requirements; 4) restrictions on foreign investment and ownership; and 5) lack of mutual recognition & harmonization of standards.

It is evident that the existence of NTBs presents a huge obstacle to the success of the AEC.  The World Economic Forum found that the reduction of NTBs would have far larger benefits than the elimination of tariffs. Tariff removal can only increase global GDP by 0.7% and trade by 14.5%, whereas reducing NTBs halfway to global best practice could elevate GDP by 4.7% and trade by 10.1%. Clearly, greater efforts are needed to separate the legitimate public policy objectives of non-tariff measures from a desire to protect local interests.

In an attempt to highlight this issue, the Economic Research Institute for ASEAN and East Asia (ERIA) and the United Nations Conference on Trade and Development (UNCTAD) have just launched the Integrated Trade Intelligence Portal (I-TIP), which is a database detailing all of the NTBs in the ASEAN region. In contrast to the WTO’s report, I-TIP’s records show that there are now close to 6,000 NTBs in place. This reflects a crucial issue of inconsistency in data.

Based on I-TIP’s findings, more than half of the current NTBs are in two main categories: 1) sanitary and phytosanitary (SPS); and 2) technical barriers to trade (TBT). Furthermore, most of the SPS measures are imposed on food and drink items, whereas most of the TBT measures are placed on products of the chemical and allied industries. Some of these import restrictions might be due to legitimate reasons, such as public safety or national security. However, they can also be misused for less than legitimate reasons, especially the protection of domestic businesses at the expense of foreign competition. 

I-TIP’s study also revealed that across the ASEAN countries, Thailand has the highest number of SPS and TBT measures. For example, Thailand has approximately 20 times as many SPS measures as Cambodia and Lao PDR, and about 15 times as many TBT measures as Myanmar. These differences pose a significant obstacle to the growth of the CMLV countries, which represent the least-developed ASEAN member states. Additionally, on a global scale, Thailand enacts roughly 40% of the world’s existing SPS measures, and 20% of TBT measures. By taking such a tough stance on imports, both inter-ASEAN and intra-ASEAN free trade is severely hindered.

It is evident that the proliferation of NTBs in the ASEAN region is a huge obstacle to achieving AEC Blueprint 2025 goals. This problem has also been highlighted in a United States Agency for International Development (USAID) report on NTBs in ASEAN. It concluded that, despite prior efforts by the ASEAN High-level Task Force on Economic in 2004 Integration and the 2009 ASEAN Trade in Goods Agreement, there has been limited progress in the elimination of NTBs.

Consequently, the continued existence of NTBs in ASEAN is a pressing issue that must be addressed before the region can capitalize on the benefits of the AEC. There is a need to increase intra-ASEAN cooperation and transparency measures, so that countries can collaborate in tackling the problem of NTBs. The I-TIP database can be used to support such efforts, as it currently holds the most updated and comprehensive information regarding NTBs in the ASEAN region. Lastly, both private and public organizations should utilize the I-TIP database, as greater awareness of the problem of NTBs will place pressure on the relevant authorities to take action and rectify the situation.

What Companies Can Do:

-       The second phase of the I-TIP project involves data analyses on how non-tariff measures will affect trade in the ASEAN region (January 2017).

-       Companies can contribute to this project by sharing information on how NTBs have affected them (e.g. prevention of free trade and fair competition).

-       Contact the ERIA Annex Office:

o   Tel: (62-21) 57974460

o   Fax: (62-21) 57974463

o   E-mail: contactus@eria.org

-       Contact UNCTAD’s Division on International Trade in Goods and Services and Commodities (DITC)

o   Director: Mr. Guillermo Valles

o   Fax (+41 22) 917 5176

o   ditcinfo@unctad.org

***This is a guest Talking Trade post written by our departing research intern, Nur Atiqah Binte Suhaimi.  The post is also reproduced as a Policy Brief available for download on our website.  Best of luck with your studies Atiqah! ***

Another Take on Trade Deficits or Why Imports Are Not Automatically Bad

Neil Irwin had an interesting article this week in the New York Times about trade deficits.  The piece was triggered by comments on the dangers of deficits by both Donald Trump and Bernie Sanders. 

Trump has been arguing that the fact that the United States buys more goods from other countries than it sells overseas means that the US has become a loser while others, like China and Mexico, have been winners.  Sanders has been claiming that trade deficits prove that trade agreements are bad for American workers.

Irwin nicely argues that deficits, on their own, are neither automatically good nor bad.  Getting rid of a deficit, moreover, also involves important tradeoffs and consequences that may be much worse.

New analysis prepared by Moody's Analytics, at the request of the Washington Post, shows that Trump's plans to raise tariffs on China and Mexico would drive both countries into recession as both countries would likely retaliate.  The US would also fall into recession, with millions of American workers at risk of new job losses.   

There are, of course, additional problems with raising tariffs, such as getting Congress to agree to raise tariffs (since the President cannot do this alone); as well as the minor obstacle of such tariff increases being a clear violation of American commitments at WTO.  Nor, of course, would higher tariffs somehow bring jobs back to the United States.  In fact, the net result of jacking up tariffs as Trump suggests would be mostly to raise prices for consumers least likely to be able to afford them and to cause a lot of needless economic damage.  It would be an "own goal" of epic proportions.

The stakes would be high then, on a proper assessment of whether or not the country actually has a trade deficit and whether or not such a deficit matters.

Depending on what statistics are used, many people often focus only on merchandise trade figures.  This ignores trade in services completely.  For a country like the United States, services trade is usually in strongly in surplus.

Services are also embedded in manufactured goods.  For many supply chains, services make up 30-70 percent of the total value of the final product.  These services could be logistics, retail, research and development, cleaning, legal services, customer support and so forth. 

Many of these services may not show up at all in current trade statistics. 

Officials at the OECD and the WTO, as well as their counterparts in many countries, have been hard at work to revise the way that trade is recorded, partly to better reflect the importance of services in manufacturing. 

Better measurement is also critically important to handle some of the claims about trade “deficits.”  Trade is no longer so much about “exporting” a finished item from one country into another where it is recorded as an “import.”  Instead, in a world of increasingly complex supply or value chains, items are rarely created entirely in any one country nor do they move across a border only once.  Instead, they may include hundreds or thousands of parts from multiple locations managed by globally or regionally dispersed teams with the final items crossing borders many, many times before reaching the final customer.

The classic example, used everywhere now, is the iPhone.  Traditional statistics may record the full price of the phone as an export from China to the United States.  Hence this would show the full amount of the phone as an American import from China and another example of “how China is eating our lunch,” as Trump would say.

But a careful unbundling of the phone shows clearly that this simple story is just not true.  The bulk of the value of the phone remains in the United States, contained in the profit, research and development, intellectual property and marketing owned by Apple.  The rest is distributed elsewhere, including to Korean companies that make critical, high-value components for the phone and Taiwanese companies that manage most of the manufacturing.  Very little of the actual value of the phone resides with Chinese companies.

Depending on which Apple product is being described, the figures basically show that of a $300 product, about $3-6 should be properly attributed to China.  The rest goes somewhere else and most is American.  Hence what looks like a -$300 deficit for the US and +$300 surplus for China, is actually a sizable surplus for the US and a very small surplus for China.

It’s not just high-tech products that fit this description.  Even fairly simple food products are made up of items shipped around the globe.  The Financial Times has just run a fascinating (if deeply disturbing) piece.  The point of the article is about food fraud, but highlighted at the bottom of the article is a bit about the global travel of fish, caught in waters off Scotland, shipped to China for filleting, sent to South Korea for storage in massive freezers, and eventually sold back in Europe. 

Think a bit about the statistics for such fish sticks (hopefully not adulterated with unmentionable items along the way).  The logistics, filleting, warehousing, shipping, distribution and retail sales are all services.   Tracing the supply and value chains attached to a fish stick would likely also result in shifting patterns of imports and exports from all of the countries involved as well, moving some from “deficit” to “surplus” for fish sticks, for fish, for trade in goods or maybe even for overall trade. 

It is a rare company that can obtain all the raw materials, components, parts, and services it needs from purely domestic sources.  In order to create products, most companies have to import.  This is true even for firms that will export components, parts or final products. 

Changing the statistics dramatically alters the trade “deficit” story.  It does not eliminate a “deficit” somewhere, of course, but it does shift the magnitude of a deficit with some countries.

Of course, it is also important to remember that country accounts do not work like personal bank accounts.  It’s normal for people to assume that negative account numbers must mean bad things.  After all, after balancing a checkbook, a negative number is not normally a good sign.

But trade figures do not work the same way.  Imports are not automatically a bad deal. 

In short, whenever politicians promise solutions to “fix” problems related to trade deficits, citizens ought to be extremely concerned.  Most likely, the remedy will be much, much worse than anticipated.

--Please join us for the next Asian Trade Centre course on Understanding Trade Agreements in Asia, April 11, 9:00-1:00, 41A Ann Siang Road, Singapore.  To register, please click here.

***Talking Trade is a blog post written by Dr. Deborah Elms, Executive Director, Asian Trade Centre, Singapore***

How Small is Small? Why Do Firms Stay Small in ASEAN?

While most countries celebrate small and medium enterprises (SMEs) as the “backbone” of their domestic economies, there is surprisingly little consensus about what defines an SME, what conditions are critical to the success of SMEs and what sort of government policies are most helpful to support SMEs.

This post does not have sufficient room to cover all these issues either, but will highlight the divergence of definitions over what constitutes an SME in just a handful of countries within ASEAN and note one important challenge that SMEs in Southeast Asia face in making the leap from small to even medium size:  a lack of access to financing.

It turns out that even within just five ASEAN countries (Indonesia, Malaysia, Philippines, Singapore and Thailand) the definition of an SME varies quite significantly.[1] 

Indonesia counts turnover and net assets.  Malaysia and Philippines count turnover and employee numbers.  Singapore does as well, but does not have different categories to break out micro, small and medium enterprises—any entity with less an USD$74 million in turnover and under 200 employees is an SME (medium, small or micro).  Thailand counts fixed assets and employee numbers and lumps together small and micro enterprises.

To get a sense of the variation across the five countries, consider just the category for small enterprises (all figures in USD):  Indonesia has turnover from $20,000-200,000 and net assets from $4,000-40,000.  Malaysia counts turnover from $80,000-800,000 and 5-30 employees.[2]  Philippines says “small” is turnover of $68,000-340,000 with 10-99 employees.  Thailand expects fixed assets of less than $900,000 with less than 15 employees.   

By definition, anything smaller than this is a “micro” enterprise.  Most of these firms have been ignored or overlooked. 

My APEC readers will quickly point out that during Philippines host year in 2015, the definition of SME was altered to be MSMEs.  This actually makes a great deal of sense given that the proportion of enterprises in the five countries are nearly all micro enterprises.  (Note that the data is slightly skewed by Singapore’s classification of all SMEs into one category.)  Nearly 99% of Indonesian firms are micro enterprises, 77% of Malaysian companies, nearly 90% in Philippines, and probably most of the 99.5% of Thailand’s firms that are grouped together under micro/small. 

Governments, of course, care a great deal about MSMEs, because while they do not all contribute as much to overall GDP relative to their overwhelming numbers, they do contribute significantly to employment. 

MSME contribution to GDP in 2013 included Indonesia with 59% of USD$868 billion (2012 figures); Malaysia with 33% of $313 billion; Philippines with 34% of $272 billion; Singapore with 47% of $298 billion; and Thailand with 37% of $387 billion. 

The employment contribution of smaller firms is substantial.  Nearly every Indonesian (97%) works in an MSME.  More than half of all Malaysians (58%) work in MSMEs, as well as 63% in the Philippines, 70% of Singaporeans, and 81% of Thais. 

Hence the urgency in figuring out what government needs to do to get greater productivity out of the MSME sector and how the smallest firms can be encouraged to grow larger.  There are, of course, many obstacles to growth for small firms.

But one significant roadblock to growth is a lack of credit or financing, particularly for the very smallest firms.  SME loans and financing options are increasing, but remain extremely low relative to the importance of these companies to the overall economy.

What is so striking about the Deloitte study is the shockingly high levels of personal financing used by small firms.  In other words, most of the small firms in ASEAN are making do with money they have saved themselves or have borrowed from other family members. 

For example, in Thailand, 90% of SMEs said they relied on their own savings.  In Indonesia, 86% of SMEs reported relying on internal funds for financing needs.  Nearly half (48%) of Malaysian firms reported using their own funds for financing. 

It is true that providing bank funding, for example, to small firms and especially to micro companies, is difficult and expensive.  The complexity of processes for qualification can be too daunting for many small firms.  Credit rating agencies do not exist.  Most banks do not assess loans against business plans but against tangible assets.  Micro businesses, particularly, rarely have substantial assets or usable collateral.  The bank loans that do exist for these firms often do not get extended until small firms have been around for years.

All this leaves MSMEs badly served or underserved and unable to grow.

Payments are a particular problem for smaller firms.  The Asian Trade Centre is working on one aspect of this issue, connected to companies trying to operate on e-commerce platforms.  At the moment, smaller firms trying to manage cross-border payments, especially on mobile devices, struggle to complete transactions with interested buyers of their goods and services in a cost-effective way across the region.

To give a concrete example of the problems companies face, consider our issues related to payment.  We had a large multinational last year that wanted to provide a payment via a credit card on our website.  Our website is hosted out of the US via Squarespace.  It uses a proprietary payments system called Square, which was not authorized for use in Singapore. 

We asked Squarespace for help.  They suggested using Paypal.  With all due respect for our colleagues at Paypal, the large MNC said no.  Plus Paypal has a fairly large transaction fee (for a small firm). 

Squarespace suggested we turn on the shopping cart function on our webpage with our local Singaporean bank.  We called our bank.  They said they would do so for SGD$4200 in the first year and keep it active for $2200 a year after that. 

In the end, the company gave us cash. 

Think about the inefficiencies in this system.  This is why we are pushing so hard to get governments in the region to sort out payments for smaller firms—without this critical leg of the problem addressed, e-commerce benefits will never flow to the companies that represent the largest segments of commerce in the region.

Of course, if you would like to give us cash or sort out our SME banking, payments or loan problems, do let us know! 

***Talking Trade is a blog post written by Dr. Deborah Elms, Executive Director, Asian Trade Centre, Singapore***

[1] Data for this post is drawn from an interesting 2015 Deloitte study on Digital SME Banking commissioned by Visa.  Deloitte’s data was largely drawn from existing surveys or government statistics departments. 

[2]But apparently not in the manufacturing sector.  The Deloitte study draws from the Malaysia Department of Statistics.  (Perhaps readers could explain what is different about the manufacturing sector?)

Stitching Together Garments With Asian Trade Deals

Shanghai—Participants from more than 250 of the largest textile and garment manufacturing firms and industry associations in the world gathered in Shanghai this week as part of the 2016 China and Asia Textile Forum.   The overall economic picture for textile and apparel is decidedly mixed as overall economic growth is slowing, retail sales are off, yet many important apparel markets continue to show rising sales, including new markets within Asia.

One important panel session covered the benefits for textile and apparel producers coming in the Trans-Pacific Partnership (TPP).  [Assuming, of course, that US Congress does the right thing and approves the deal—but that is a post for next week after critical primary elections in Florida and Ohio.  Keep the calls coming into Congress in the meantime.]

While the TPP does provide significant benefits for many textile and apparel firms in the form of lower tariffs, the complexity of navigating the agreement is substantial.  It will provide job security for many, many consultants and legal firms for a long time to come as firms wrestle with new yarn-forward rules of origin for companies that have never had to grapple with these provisions in the past.

The TPP as a whole is a high-quality agreement.  The textile provisions—particularly for entry into the American market—are not.   It remains needlessly complicated and does not represent anything close to 21st century rules.  It does not foster efficient supply chains, will not encourage smaller firms, and basically goes against most of the general momentum of the rest of the agreement.

Many TPP countries granted duty free access to garments on the first day of the agreement.  The United States did not, except for a narrow range of products, like some categories of dresses.  Some American tariffs will remain in place for a decade. 

Some of the final reductions in important categories like denim can only take place after the United States certifies that labor provisions from elsewhere in the agreement have been fully implemented at the five year mark. 

But the lucrative American market has always been difficult to enter for textile and apparel firms, so even poor quality TPP rules can make substantial bottom line differences to companies willing to invest the time and effort needed to figure out the new system. 

Firms are already moving into Vietnam for spinning and dyeing operations, for example, to take advantage of new opportunities to get into US markets.  [Vietnam has the added appeal of the pending EU-Vietnam trade agreement that will provide improved access to the European markets.]

However, not every textile or apparel company can use the TPP.  Not every firm is located in a TPP market or is able and willing to move to one.  Not all sell products to TPP markets.  Not all are going to be able to easily shift sourcing of fabrics from current suppliers, especially. 

But all is not lost for textile and apparel companies.  Most Asia-based companies may also be able to use provisions in the Regional Comprehensive Economic Partnership (RCEP) negotiations. 

RCEP is an ongoing negotiation that brings together 16 parties in Asia—the 10 member countries of ASEAN, plus China, Korea, Japan, India, Australia and New Zealand.  Talks are targeted for conclusion this year and there is still time for companies to push for better outcomes that cover textile and apparel products of importance to firms in the region.

The garment supply chain for Asia often includes fabrics sourced from China, India, or Korea, sewn in Cambodia, Vietnam or Indonesia, and sold across the region including into Japan, Australia or China.  All these products could be eligible for RCEP benefits, if the rules of RCEP—including tariff cuts and rules of origin—are written to provide better preferences for RCEP member firms.

RCEP will likely be much easier to use than the TPP as well.  RCEP should not be using a yarn-forward rule of origin, so manufacturers can source fabrics from across the 16 member countries for inclusion into garments. 

Depending on how the rules are written, fabrics might be sourced from outside the region as well, as long as the garments are cut and sewn in RCEP member countries for sale within RCEP member countries.  This rule would benefit many garment manufacturers that currently source fabrics from non-RCEP countries like Taiwan.  It would allow manufacturers greater flexibility to choose materials from the most suitable source.

Companies from across Asia will have to push their governments to be more ambitious in textiles and garments.  Otherwise, important items could be left out of the final provisions and rapidly dilute the utility of the final agreement for firms. 

Asian companies are not used to working proactively with governments to shape ongoing trade negotiations.  This is, however, a critically important opportunity that ought to be seized by firms.  Government officials working on market access for goods, rules of origin and trade facilitation may not know very much about the specific conditions for textile and garment manufacturing in their own country or across the region.

Officials will certainly not know that, for instance, domestic companies could shift an additional 50,000 pieces of dress shirts per month if a key tariff were eliminated into a market.  They may not realize that they are fighting to protect a product category that will no longer be manufactured domestically at all or that growth opportunities are best found in a different category that needs the lowest possible tariff or a more favorable rule of origin calculation method. 

The rules set down in RCEP are likely to be the rules that govern trade in Asia for the next decade.  Using a 16 country agreement will be much easier for companies to use than overlapping sets of existing regional and bilateral agreements.  For a start, if the RCEP customs paperwork is consistent, firms will no longer need to fill out six or more different types of customs paperwork to ship products to the 16 markets in Asia. 

Firms should plan to attend the next round of RCEP talks in Perth, Australia, during the last week of April and should be talking to their own market access for goods and rules of origin RCEP negotiating officials now.

RCEP helps textile and garment firms that are sourcing and supplying to customers across Asia.  But it is also not a panacea.  Most of the final customers for companies remain consumers in North America and Europe.  RCEP provides benefits for neither market.

***Talking Trade is a blog post written by Dr. Deborah Elms, Executive Director, Asian Trade Centre, Singapore***

US Presidential Politics Sours Further on the Trade Front

Yesterday’s New York Times carried a front-page article that neatly captured the inside-out world of the US presidential campaign season for trade watchers.  The article highlighted both Donald Trump’s bashing of Japan’s trade policies and the increasing concern within Tokyo over this potential narrative.

Where to begin with reactions to this story?

First, perhaps to Japan—get in line.  Anyone with an interest in trade has been watching the Trump campaign (especially) with a growing sense of unease or even horror for a long time. 

This is a candidate, of course, who has already threatened to slap China with 45% tariffs on all products shipped to the United States.  This would, Trump has claimed, stop China from unfairly dumping products into the American market. 

It’s not entirely clear, but it seems that he expects that, if China were not “unfairly dumping” all these products into the US market, then the goods would be made in the United States by American workers?  Or perhaps he just wants Americans to pay an additional 45% for goods?  Or shift production to some other country like Vietnam or Myanmar?

At the same time, the Financial Times is reporting the largest collapse in Chinese trade in years, with exports and imports plunging faster than at any time since 2009.  The IMF is now warning of the risk of “eminent economic derailment.”

Whatever the original justification might have been for wanting to impose huge tariffs on Chinese imports, in such stagnating conditions, such a policy would be doubly disastrous.  But logic is not a key element of Trump’s brand.

For Japan specifically, Trump has long claimed that Japan practices a host of “unfair” policies, including manipulating its currency to keep it artificially low. 

One huge irony, of course, is that Japan is embarking on some of the biggest changes in domestic policy in a very long time as a result of commitments made in the Trans-Pacific Partnership (TPP) agreement.  These will include tackling sensitive issues in agriculture and services, revising regulations, and changing legislation to bring Japan into compliance with this 12 party agreement.

Japanese leaders have decided to proceed with the TPP precisely because such reforms are necessary to achieve higher levels of economic growth after a prolonged period of domestic stagnation. 

In the face of impressive political courage in Tokyo, Donald Trump has instead raised the specter of old ghosts from decades ago.  Others may start to pick up and run with his ideas as well.

In the 1980s and 1990s, when Japan was experiencing rapid economic growth, the two countries came perilously close to important trade “wars” over issues like autos and auto parts, construction, and insurance.  Trump’s language now restarts some of the same debates of this time period and may make it harder for Japanese officials to take critically important bold steps at the domestic level.

Equally alarming, of course, is that Trump is not alone in his comments.  Although, in typical Trump fashion, he has gone much further out on a branch than anyone else, other top political contenders for the position of US president are also bashing trade in general.

Ted Cruz, another top Republican party contender, once backed his party’s stance in favor of freer trade.  He had been a supporter of Trade Promotion Authority (TPA).  However, once he became a candidate for President, he suddenly switched his stance on the issue last summer and voted against the bill in the Senate. 

On the other side of the aisle, Democrat Bernie Sanders is strongly against trade.  He argues that trade agreements have done untold damage to American workers in the past and will continue to harm their prospects in the future.

Hilary Clinton was, of course, a frequent and vocal supporter of trade and of the TPP in particular when she was serving as President Obama’s Secretary of State from 2009-2013. 

When she began her run for president, she was as non-committal as possible.  Generally she argued that she needed time to study the deal before she could declare her position.  Once the texts were released in November 2015, however, this became harder to defend. 

In addition, with Sanders running an unexpectedly strong campaign, Clinton was forced to tack left of where she had likely hoped to remain.  This appears to have pushed her to make recent statements on the TPP particularly complaining as well about possible currency manipulation by key trading partners (not all of whom are also TPP members). 

Other areas of concern for her are state-owned enterprise behaviors, lax American enforcement of existing rules, and tax avoidance by American companies.  (See her recent op-ed for details.)

In short, the entire slate of top contenders for the US presidential office are either clearly hostile to trade and the TPP or are, at best, not supportive of the agreement “in its current configuration.” 

This is a problem.  Not just for businesses in the United States, but regionally and globally, as many stand to reap considerable benefits from the implementation of the TPP.  The agreement cannot come into force without the Americans. 

What to do?  We have been suggesting that the best pathway is to have the US Congress vote on the implementing legislation for the TPP as soon as the ITC issues its report in May and before Congress leaves for the summer recess. 

Most people would regard this as a crazy strategy.  Voting on a complex trade bill ahead of a general election is not seen as a sensible approach for candidates.  But this is not, as we have clearly seen, a normal election cycle either.  With all candidates at the top of the ticket lukewarm or hostile to trade, waiting to get approval for TPP is looking increasingly problematic. 

In the upside-down world of today, the TPP might not cost as many votes as might otherwise be expected either.  Voters are making decisions based on a lot more than the usual criteria. 

Hence, holding the TPP vote early and getting it out of the way may look increasingly possible.  But this will only happen if members of Congress believe that there is sufficient support from the business community to justify the vote. 

So call or write Congress.  Today.  Even if you are not American.  Don’t pass it off to your GR or PR person.  Do it personally.   And ask others to do so as well.  Congressional staffers count the number of times members are contacted and aggregated numbers are critical.

The TPP matters to too many in the broader trade community to let this fall down over narrow parochial concerns in a handful of districts or, even worse, nonsensical policy based on a misreading of facts from 25 years ago. 

Here are key contact details if you do not have a specific member to approach.  Contact them all or at least reach the committee chairpeople at:

House Ways and Means:  http://waysandmeans.house.gov/

Senate Finance: http://www.finance.senate.gov/

***Talking Trade is a blog post written by Dr. Deborah Elms, Executive Director, Asian Trade Centre, Singapore***