Tuesday, October 6, 2015

Economic daily published an article on the front page TPP not likely to replace

Local time on October 5, the United States and from Australia, and Canada, trade ministers from 11 countries announced the completion of the trans-Pacific partnership agreement (TPP) negotiations lasted more than 5 years of arduous negotiations to an end. If the TPP in the National Congress, a 40% per cent of the world's economic output and is known as "history of the highest standard," trade group came into being. An interview with the economic daily that the Chinese Academy of social sciences and Pacific Institute of global strategy expert Shen Minghui.

Reporter: TPP 12 countries such as the United States reached a basic agreement on what a profound impact on the global trading system?

Shen Minghui: although it is still difficult to judge the TPP ultimate destiny, but the giant free trade agreements, including the TPP has had a profound impact on the global trading system.

This effect is mainly manifested in two aspects. One hand is TPP triggered a domino effect. Many small economies have expressed willingness to join the TPP, with a view to obtaining huge United States market, while others do not consider joining the TPP economies in the near future for other FTA (free trade area) or enthusiasm for multilateral trade negotiations became higher. The other hand is TPP raises competitive liberalization. Emerging powers change treated in previous trade negotiations trade in services, investment, intellectual property and other trade issues, is willing to make more open commitment.

Reporter: view TPP has now replaced WTO situation, how do you see this?

Shen Minghui: careful analysis can see this extreme situation may appear in the future development of the multilateral trading system. From the WTO in the area of trade unique features as well as the United States promote the TPP's strategic motives of two analysis shows that TPP is not likely to replace the WTO. This is because although the Doha round of negotiations did not go well, but the WTO remains by far the most widely involved in the global multilateral trade mechanism, and is the only one able to cover all kinds of different stages of development country or regional multilateral trade mechanism. Apple confirmed app store was massive attack no

Owned by the WTO most-favoured-nation tariff (MFN) preferential tariff is also the most frequently used, its dispute settlement mechanism are binding on a global scale, these unique features is currently not found in any other trade mechanisms, so that any country cannot easily give up WTO. More importantly, United States the intention to promote regional economic cooperation is not want WTO replaced by TPP. Looking at the history, United States promotion of TPP and trans-Atlantic trade and investment partnership (TTIP), the main goal is regional economic cooperation to promote a new round of reconstruction of the global trading system.

Reporter: TPP on behalf of regional economic and trade rules will increase as the global trading rules?

Shen Minghui: at present, the global trading system is experiencing since the Uruguay Round negotiations the biggest round of refactoring. In the short term, due to the current members of the WTO's most-favoured-nation tariff averages have been lower, whether developed countries open their sensitive sectors, and developing countries accept to secure market access to developed countries within its boundaries large steps to reform the cost so low chances of a package agreement WTO. In the medium term, with the stagnation of multilateral trade negotiations to some extent, States will continue to pursue regional economic cooperation as a means of promoting economic and trade development, the future pattern of global trade and investment will become more diversified.

In particular, if TPP TTIP successfully negotiated and implemented, within the Group of developed countries in the multilateral trading system's overall strength and bargaining position will be improved, United States within the TPP may be part of the rule template to push for a new round of multilateral trade negotiations. From looking at the rules, issues of the Doha round of talks has failed to promote, such as government procurement, competition policy (including State-owned enterprises), part of the new issues such as investment rules will be nominated for new round of multilateral trade negotiations, trade in services, environment, intellectual property, such as WTO issues may also be further deepened. But if TPP TTIP failed to successfully implement, or decision-making mechanisms fail to achieve reform of the WTO, to United States for representatives of developed countries will be possible according to the sectors open to the idea, independently initiated on investment, trade in services, such as content negotiation, formation of multilateral agreements, multilateral agreements such as the agreement on trade in services, investment, multilateral environmental agreements, and so on. This way, the final WTO will continue to maintain its multilateral mechanisms for dealing with trade in goods, service trade agreements, will likely rise as similar to the agreement on government procurement and the WTO information technology agreement under the framework of plurilateral agreements.

Long term, even if in the future United States, and Japan and the EU successfully form a trade group, but if you can't come to terms with emerging economies, trade rules in new areas is still difficult to be a real sense of the new rules for global trade. It can be foreseen that only when these emerging economies are basically complete industrialization and economic structure transformation, needs to further open up trade group of emerging economies in the new global market can really with the developed countries to launch a new round of "package" of multilateral trade negotiations.

In short, with the rise of the Group of emerging economies, developed countries "hugs" the growing trend of strengthening regional economic cooperation, it is overwritten by further regional economic and trade rules, which is itself developed a reaction to the changes in the world economy. TPP on behalf of regional economic and trade rules can rise into a global trading rules will ultimately depend on the interaction between developed and emerging economies and mutual compromises, it is difficult to judge the final results. But what is certain is, a new round of the global trade system reconstruction period, various free trade agreements would be substantially increased, and the future pattern of global trade and investment will become more diversified.