TPP-11 and RCEP: The Push to Establish a Desirable Regional Order

Professor Oba Mie comments on the two large FTA recently agreed (TPP-11) and proposed (RCEP), and evaluates the role Japan has played in negotiating their settlement.

Early last month [ed. this article was submitted Dec. 23, 2017], trade ministers from eleven signatory nations of the Trans Pacific Partnership (TPP), excluding the United States, released a statement announcing that they had reached agreement on major elements of TPP-11, the version revised in the wake of the United States’ withdrawal. With some believing that the TPP was “mostly dead” when the United States pulled out, there is still some debate, mainly emphasizing how losing the massive American market has limited the economic benefits of the TPP itself and blunted its momentum. However, while the the reduced economic benefits due to the departure of the United States are obvious, I have to say that eleven nations reaching an agreement is significant in and of itself.

That is not to say the situation is hopeful. During the latest talks, four points were raised as matters requiring ongoing negotiation, namely state-owned enterprises (Malaysia), coal industry services and investments (Brunei), dispute resolution (Vietnam) and cultural exceptions (Canada). Observers forecast a difficult road ahead as to how these unresolved issues will be ironed out through future talks. If each nation sticks to its own interests, it will be difficult for TPP-11 negotiations to reach a final conclusion.

TPP-11 also holds significance as an entry point should the United States one day decide to re-join the TPP. At least for the meantime, however, America is moving in very much the opposite direction. In its National Security Strategy announced at the end of 2017, the United States referred to the promotion of an “American First Security Strategy.” As part of that strategy, the United States has indicated a clear disdain for “international institutions” seen to be harming efforts to protect American workers and businesses, and will take a hard line in seeking “fair and reciprocal economic relationships” to correct trade imbalances.

With the latest agreement on major elements of TPP-11, what deserves the most recognition is the stance being adopted by these eleven countries to establish common rules across a wide region that will apply to a broad range of economic fields. In so doing, they are expressing opposition to the trend of protectionism that has taken hold around the world. Far from being a unique American phenomenon, protectionist movements typified by anti-EU sentiments have also gained traction in Europe, and excessive nationalism continues to spread. Going against this tide and reaching a basic consensus on the establishment of common rules across a wide range of fields, with each country effecting structural changes to their industries and at least some legislative reforms, is quite significant.


The Regional Comprehensive Economic Partnership (RCEP) is another large FTA currently in the negotiating stages. RCEP also missed its initial target of concluding negotiations by the end of 2017, but a new target year of 2018 was set, with the aim of forming a “comprehensive, high-quality and mutually beneficial economic partnership agreement.” RCEP proposes the establishment of rules across seventeen areas that include trade in goods, investment liberalization, rules of origin, policies on competition and the protection of intellectual property rights. The degrees of liberalization and common rule establishment achievable by TPP-11 and RCEP will likely differ. Even so, the fact the signatory nations continue to advance negotiations and indicate their willingness to reach a conclusion on these two so-called mega-FTAs shows that attempts to form economic order in the region based on multilateralism are still alive. This can rightly be described as a bid to maintain international order based on the principle of international cooperation. Today that notion is truly under threat, and these developments mark an attempt to bring the rest of the world back towards that ideal.

From this perspective, the Japanese government deserves recognition for producing the driving force behind the establishment of TPP-11, and for the major role it has played in RCEP negotiations. Japan’s strong leadership clearly played a big part in the establishment of TPP-11, and RCEP negotiations offered a vital opportunity for Japan and China to cooperate with one another against a backdrop of improving relations. In the current climate, there is extreme uncertainty surrounding international and regional order. Given this, it is crucial that in addition to its traditional policy of strengthening the Japan-US alliance, Japan has employed other means such as an improved relationship with China and regional multilateral efforts like TPP-11 and RCEP. In doing so, Japan seeks not only to secure its own interests, but also to ensure the safety and prosperity of the entire region.

Note: This article was submitted on December 23, 2017, before the Agreement was signed on January 23, 2018. See also “Challenges to the New ASEAN-Japan Partnership in the Changing Regional Circumstances,” Discuss Japan, March 26, 2014.

Oba Mie is a professor at the Tokyo University of Science, Faculty of Engineering, Liberal Arts.

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