“This is a remarkable achievement.”
November 16, 2017
Wendy Cutler is a Vice President of the Asia Society and the Managing Director of the Asia Society Policy Institute, the Society’s Washington Office. It was in November of 2015 that she left the government to take up those private sector/think tank roles. Before that, Ms. Cutler was a top USTR negotiator. She was the lead negotiator for KORUS, the U.S. free-trade agreement with South Korea and, as (Acting) U.S. Trade Representative, she was responsible for the TPP negotiations, especially the critical negotiations with Japan.
On Thursday, November 16, Ms. Cutler was one of four panelists at GBD’s first public event on TPP since the United States withdrew from the agreement. She said a lot in short period of time. Before turning to some of the highlights of Ms. Cutler’s presentation – including today’s featured quote – we would note these four dates in the life of TPP:
• September 22, 2008 – Then-U.S. Trade Representative Susan Schwab announces that the United States will join in the effort to negotiate a Trans-Pacific Partnership. Her statement is made at a meeting in New York with the trade ministers from Brunei, Chile, New Zealand, and Singapore or the P4.
• February 4, 2016 – Meeting in Auckland, New Zealand, representatives of the twelve countries that negotiated the Trans-Pacific Partnership Agreement (TPP) sign the agreement. The twelve countries are: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam
• January 23, 2017 – President Trump announces America’s withdrawal from TPP.
• November 11, 2017 – Meeting in Da Nang, Vietnam, the TPP 11 – that is the above 12 minus the United States – issue this statement on a revised TPP:
“Ministers are pleased to announce that they have agreed on the core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).” That’s the new name.
But now let’s return to some of what Ms. Cutler said last week. She told her audience she had eight points to make. A recording of her full presentation is available under the GBD Events tab of this website. If you listen to it, you will see that, here and there, we have ignored the numbers and shifted some observations from one segment to another.
On the Overall Effort. Ms Cutler’s first point was the one quoted above. “This was a remarkable achievement.” As noted by another panelist, Atsushi Yamakoshi of Keidanren USA, America’s withdrawal from TPP came as a shock to the countries concerned and to the region. The first clear public effort to regroup and regain some momentum for TPP was the meeting in Chile back in March, a meeting which included not only the 11 TPP countries but also Korea and China. It was certainly not clear then, however, that the TPP 11 would be able to salvage the deal.
Japan’s Leadership. Ms. Cutler had high praise for all of the TPP countries but focused particularly on the leadership role of Japan. She herself had worked with Japan in the effort to bring them into the TPP negotiations, where they became an active participant. But being an active participant, she said, is far different from being a leader. And in the wake of the U.S. withdrawal, Japan was the leader. And she offered this illustration:
In TPP, remember, there were rules, and then there were market access commitments. These market access commitments are very detailed, and for Japan a lot of that was about what they were going to do on agriculture. … Japan had agreed in certain instances, particularly with respect to some very sensitive products, to what we called TPP-wide quotas. So, it was one number for all TPP 12.
The question, I am sure, that was under internal discussion [in Japan] was, do we keep that number for the TPP 11? Or do we somehow take a percentage out of that quota to reflect the U.S. exit from TPP? ….
I am sure that the Ministry of Agriculture probably wanted to reduce that quota. But if Japan was going to be the leader here, it needed to keep its market access commitments intact or else it would be a slippery slope. If Japan took some agricultural concessions off the table, others would follow. And that’s what leadership is about. And so, again, congratulations to Japan.
Suspended and Retained. The TPP 11 have agreed to suspend some 20 provisions of the original agreement, and naturally, as Ms. Cutler noted, the U.S. stakeholders who had argued for those provisions – provisions on things like the length of copyright protection and the treatment of certain pharmaceutical data – are unhappy that those elements have been suspended. But the suspensions are hardly the whole story. In Ms. Cutler’s words:
We need to remember everything that they kept in [the agreement]. .. That means labor, environment, the SOE rules [for state-owned enterprises], … the market access commitments, the digital commitments. And, in the areas where there were suspensions, they’re not suspending the whole chapter. … The TPP is largely intact, and all of the TPP 11 countries .. did a magnificent job in keeping almost all of the provisions intact.
More to Do—Canada. Brunei, Canada, Malaysia, and Vietnam all have outstanding issues, but the one Ms. Cutler highlighted was Canada—Canada and culture. When Canada joined the TPP 12, she said, it sought a broad carve out for cultural policies, but “that was not the outcome that was achieved” in the TPP agreement. Of course, in some respects the CPTPP is a new agreement, and Canada may again be seeking a broad carve out for culture. The weight she attached to that challenge was evident in her comment to the effect that “it may be necessary at some point to think about a TPP 10.”
Effect on RCEP. RCEP, the Regional Comprehensive Economic Partnership, is the other major trade agreement being negotiated in the Asia-Pacific Region. Anchored by the ten countries of ASEAN, the Association of Southeast Asian Nations, the negotiations also include Australia, China, Japan, India, Korea, and New Zealand. Ms. Cutler said that “This conclusion or near conclusion of the TPP Eleven, I think, provides important momentum to the RCEP negotiations.”
Without America – The Confidence Effect. Ms. Cutler’s point in this portion of her remarks was a serious one, but there was a sense of fun in her language. This is what she said:
The TPP 11 agreement, I think, really will build the confidence of TPP 11 members but also others in the region. … They must now feel like, ‘Wow. [We] can now do this without the United States.’ I would have loved to have been a fly on the wall for the negotiations. I’m thinking of all the different phases they probably went through. I would like to think there were times, particularly in the beginning, when they really missed the United States. But I also have to believe they probably had a stage in which – one night, a late-night meeting – where they were all kind of like laughing and thinking, ‘We don’t want to do this. Let’s take this off the table. The United States isn’t here.’ Kind of acting like kids with a bowl of candy.
But I think, by the end, while maybe they still miss us, I think they figured out a way to work together, to adjust to the new reality, and now to move forward.
TPP and China. Ms. Cutler was emphatic:
I think the TPP 11 agreement underscores that the TPP was never a U.S. conspiracy to contain China. If it had been, then TPP 11 would not have happened.”
A Personal Assessment. She said:
I get this question a lot: What does this mean to you personally?
My response is, I am so happy for the TPP 11. I think this deal is great for the region. I think it’s great for the multilateral trading system. I believe it’s a serious mistake for the U.S. to withdraw from TPP. And I think this is a decision we will come to regret.
On the New Name. As noted above, what used to be the Trans-Pacific Partnership or TPP, is now the Comprehensive Progressive Agreement for Trans-Pacific Partnership or CPTPP. Asked about the name in the question period, Ms. Cutler said:
It doesn’t roll of the tongue. I kind of like what Prime Minister Abe called it, and that was “Oceans 11.”
This is already a long entry, and, moreover, we know we will be returning time and again to TPP or CPTPP, and we strongly suspect we shall be sharing much more from last week’s event. So, we shall keep our comments to the one, absolutely de rigueur observation: Happy Thanksgiving!
Wendy Cutler Looks at TPP 11. This is a link to the audio recording of Ms. Cutler’s presentation at the GBD event TPP, AFTER APEC on November 16, 2017. This was the source for today’s featured quote (and most of the rest).
TPP, AFTER APEC is the page of the GBD website devoted to materials related to this event.
Official Statements takes you to the Ministerial Statement from the TPP 11 issued in Da Nang on November 11 as it appears on the website of the New Zealand Government.
Originally published on November 22 as TTALK Quote No. 66 of 217.
© 2017, Global Business Dialogue, Inc.