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From TPP to CPTPP: What does it mean?
Politically, this new development shows a more optimistic gesture from the 11 remaining signatories in continuing the trade agreement in spite of the US withdrawal.
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Politically, this new development shows a more optimistic gesture from the 11 remaining signatories in continuing the trade agreement in spite of the US withdrawal. (Shutterstock/File)
T
he impasse that ensued after the United States government’s withdrawal from one of the most anticipated mega-regional trade agreements, the Trans-Pacific Partnership (TPP), has finally been resolved with the 11 remaining signatories making a fundamental change to the agreement.
As announced by Vietnam’s Trade Minister during the APEC forum that closed on Nov. 11, the 11 member countries agreed to continue the TPP under a new brand, officially called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The original Trans-Pacific Partnership Agreement (TPPA) asserts that the TPP will come into effect 60 days after all members complete the ratification process.
However, if this condition is not met two years from the date the agreement is signed, the TPP would come into force when at least six of the original signatories, which represent 85 percent of the total GDP of members, must have ratified the agreement.
In this regard, the ratification of the US, which represents 62 percent of the original members’ combined GDP, would be necessary for the TPP to be implemented. Without US ratification, it would be unfeasible for the TPP to come into force.
The US withdrawal from the initiative, then, left the remaining signatories with two options. One, they must renegotiate and undertake major revisions to original design of the agreement, particularly on the TPP’s requirement for implementation.
Two, they need to consider the option of pursuing an alternative agreement with the addition of another global superpower. Relaunching the TPP under the new name with fundamental changes shows that the first of the two available options was the one the 11 remaining signatories finally chose.
