June 30, 2018

...AND CHEAPER...:

TPP negotiators to gather next month to discuss expansion: Thailand and Indonesia ready to join Asia free trade bloc (YASUO TAKEUCHI, RINTARO TOBITA and YUTA KOGA, June 30, 2018, Nikkei Asian Review)

TPP-11 is poised to create a free trade zone covering 13% of global gross domestic product and 15% of global trade by value. GDP in the 10 members other than Japan is currently around $5.7 trillion, and is set to grow more than 6% annually through 2023, according to the International Monetary Fund.

Clear, unified rules on investment in the pact will greatly expand business opportunities in the economic bloc, which would trail only the U.S., China and the European Union in size. Signatories have pledged not to discriminate between foreign and domestic financial institutions and to allow the free flow of data across borders.

Vietnam will loosen restrictions on retail, including lifting a regulation that limits foreign convenience store operators from opening more than one location. Malaysia will make similar changes. A representative of Japan's FamilyMart said the chain "will be able to think more flexibly about expansion" once TPP-11 takes effect. All but one of the FamilyMart UNY Holdings unit's 157 Vietnamese stores are operated by a local partner, but TPP-11 will allow the Japanese headquarters to take the lead on opening new stores.

Trade barriers such as tariffs will all but vanish once TPP-11 is fully implemented. Canada will end its 6.1% tax on Japanese autos in five years, while Vietnam will phase out its 70%-plus duties on large Japanese vehicles over the course of a decade.

Japan will see levies on 99.9% of its industrial exports eliminated over time, as will 98.5% of tariffs on farm, forestry and fisheries products. Imports of Japanese liquor by Vietnam and Australia have more than tripled over the past decade, and the industry looks to raise shipments even higher as barriers fall, according to a source at the Japan Sake and Shochu Makers Association. Vietnam will eliminate levies on those products under TPP-11.

Japan will end import tariffs on nearly all textiles from the bloc -- a likely boon to nations such as Vietnam and Malaysia with robust textile industries. Japan will also cut its tariff on beef to 9% from 38.5% in the pact's 16th year.

A rival effort to TPP-11, the Regional Comprehensive Economic Partnership, is also taking shape. This pact would join the Association of Southeast Asian Nations with six other countries, including China, India, South Korea and Japan, covering 31.9% of global GDP and 28.8% of global trade. In Indonesia, many have pushed to give this pact priority over the trans-Pacific deal, drawn by the possibility of partnering with China, the world's second-biggest economy behind the U.S.

Japan has kept its distance in negotiations so far due to concerns about issues such as intellectual property rules. But momentum toward an agreement has begun to build of late, according to a negotiator.

Posted by at June 30, 2018 6:50 AM

  

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