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Overview

TPP or ASEAN+N: a Regional Perspective Stephen Yan-Leung Cheung Chair, Hong Kong Committee for Pacific Economic Cooperation 4 October, 2012 Taipei. Overview. Part I: Asia and the ASEAN track Part II: Asia and the TPP track Part III: Case study on Impacts. Part I ：. Asia and the ASEAN Track.

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Overview

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  1. TPP or ASEAN+N:a Regional PerspectiveStephen Yan-Leung CheungChair, Hong Kong Committee for Pacific Economic Cooperation4 October, 2012Taipei

  2. Overview • Part I: Asia and the ASEAN track • Part II: Asia and the TPP track • Part III: Case study on Impacts

  3. Part I： Asia and the ASEAN Track

  4. Regional Strategy in the 21st Century • Actively involved in the Asian economic integration • Implementing FTA strategy • Deepening economic reforms • Maintaining stable regional environment

  5. China’s FTA Map Source: Ministry of Commerce of the People’s Republic of China

  6. ASEAN+N Partnership • Rapid development over past decades • Wide-ranged and multi-faceted • Goods, Service, 2-way investment, Energy, Transport, Culture… • Multi-level cooperation mechanism • China-ASEAN summit, Foreign Ministers Meeting, Senior Officials Consultations, Joint Cooperation Committee… • Open and inclusive partnership

  7. Rapid development: trade between China and ASEAN Source: Ministry of Commerce of the People’s Republic of China

  8. Future of the ASEAN Track • ASEAN+1 • ASEAN+3 • ASEAN+6 • ASEAN+6+2 （Russia, U.S.） • …… • FTAAP

  9. Part II： Asia and the TPP Track

  10. TPP：21st Century and High-Standard Agreement • Covering a wider range of topics than established FTAs • Open to newcomer: including accession clause (which is very unusual for a FTA) • Geographically, a real trans-pacific FTA • Binding agreements • With U.S. engaged

  11. Potential Benefits for Major Players • Increasing market access, competiveness and profitability • Increasing market size • Easier capital/investment flows • Uniform rules and standards • Rule-making • Stimulating reform

  12. TPP Negotiation is still UP INTHE AIR • Too ambitious may not be feasible • No clear guideline for how to integrate the various established regional and bilateral agreements into TPP framework • Bargaining costs roar as more countries join in the negotiation

  13. Gains for Major Players Income Effect under Different Scenarios Source: Shen Mingshui, “A cost benefits analysis of the Trans-Pacific Partnership Agreement (TPP): a Chinese perspective”, Journal of Contemporary Asia-Pacific Studies, 2012.

  14. Negotiation covering sensitive areas and issues • Environmental protection, Intellectual property rights, Labor, Financial service, Institutions, Telecommunication, … • Reforms of State-Owned Enterprise (SOE) • Convertibility of the capital account

  15. Will the TPP Negotiation Prevail? • Japan and Korea have strong interest, but both hesitate • China would NOT Join the Negotiation in the Short and Medium Term • TPP and ASEAN will coexist, with U.S. leading the former, China actively engaging in the latter

  16. Part III: Potential Impacts on China • Trade diversion • Weakening China’s influence around Asia-Pacific • “Spaghetti bowl phenomenon” increases trade costs (complex rules of origin) • Impeding structural reform

  17. Possible Policy Responses of China • Expanding domestic demand • Product differentiation • Concluding bilateral or multilateral FTAs • China-Japan-Korea FTA • China-Korea FTA • … • Consolidating China-ASEAN • “Greater China FTA” • Increasing overseas direct investment (ODI)

  18. Thank You!

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