Regional and Preferential Agreements: The ‘Pacific’ and ‘Atlantic’ Styles in Latin America

Nowadays, two fundamentally different institutional responses to global economic liberalization coexist in Latin America: the ‘Atlantic style’ (closer to closed regionalism) and the ‘Pacific style’ (closer to open regionalism). In the context of never-ending efforts of an elusive Latin-American integration, this chapter advances the idea that the Trans-Pacific Partnership (TPP) is at least successful in consolidating a model of economic integration based on preferential trade and investment agreements for an important group of Latin American countries that follow the ‘Pacific’ style. Whereas the Pacific Alliance countries have embraced neoliberal trade and investment agreements actively and expanded their scope of influence, other countries, such as the Bolivarian Alliance, have responded with active counter-organizing but with fading influence in the region. But as often happens in Latin America, these styles are not absolute and being tempered by countries like Argentina that have blends or pragmatist (pick-and-choose) strategies, taking elements from both styles.

The Institutions of TPP11: Back to the Future?

This chapter canvasses the institutions of the Trans-Pacific Partnership (TPP)—left entirely unchanged in TPP11—to assess their cumulative potential to contribute to ties of solidarity among regulatory elites and consequently foster (mega)regional integration. The promise of treaty institutions as conduits of sanguine economic integration, the narrative championed by TPP’s architects, is contrasted with a more critical account in which plurilateral institutions are seen to serve as mechanisms to advance particular economic interests in the face of opposition in the almost-universal trade governance institutions such as the World Trade Organization (WTO). This “divide and conquer” strategy, so the argument goes, dominates in TPP’s institutions, which remain generally weak and unconnected to existing frameworks in Asia and beyond. But they also vary significantly between stronger mechanisms primarily for business interests and almost entirely aspirational efforts in more social areas such as environment, labor, and development.

Choices and Consequences: Internationalizing Competition Policy After TPP

The development of international systems for the coordination and constraint of competition law and policy offers a complex blend of rewards and costs. In this chapter, I evaluate the promises and problems of this endeavor in the realms of government procurement, antitrust, and the regulation of state-owned enterprises, and outline some options for internationalization in this area and some of their respective implications. I argue that, in a field dominated by deep conflicts of value and interest, real progress will require creativity and pluralism in the forms and tools of internationalization. I emphasize the importance of regionalism as a complement to multilateralism and bilateralism; frameworks of contingent cooperation as a complement to traditional treaties and networks; and a mixed strategy of linkage to, and separation from, international trade to ensure that jurisdictions are able to pursue their shared goals.

The Lessons of TPP and the Future of Labor Chapters in Trade Agreements

Linking labor standards to trade agreements out of dual concern for poor working conditions in low-wage countries and unfair labor competition in rich countries reached its high point in the Trans-Pacific Partnership (TPP). The US labor movement’s opposition to TPP shows the disenchantment with this agenda. Other elements of the agreement were seen as equally important to workers: investment, rules of origin, procurement, and currency manipulation. These new frontiers for labor advocacy in trade agreements highlight the need to re-balance how trade agreements treat capital and labor. A promising, though overlooked, feature of TPP was the pressure the US exercised to encourage domestic labor reforms—formally through a side agreement in the case of Vietnam and informally in the case of Mexico. The US withdrawal set those reforms back. The hardening opposition to TPP also made clear that rich countries’ workers expected losses from trade will not be made palatable in the absence of effective domestic safety nets and compensatory mechanisms. TPP’s reception in the United States was a resounding rejection of liberal globalization as we know it, and the CPTPP, unfortunately, does not seem to chart a different path.

Japan: Leveraging National Regulatory Reform and the Economic Modeling of Trade Agreements

After the withdrawal of the United States from the Trans-Pacific Partnership (TPP) in 2017, Japan has taken the lead in advancing the TPP framework via the CPTPP to reform its highly regulated sectors such as agriculture and medical services. This chapter analyzes Japan’s participation in the TPP regime by (1) examining the expected impact of changes in rules and regulations that have come to be institutionalized as “entrenched regulations” or ganban in those sectors; and (2) simulating the macroeconomic impact of TPP membership on Japan and other TPP member countries, using a GTAP database and a CGE model to analyze global trade outcomes. The simulation scenarios show the framework of TPP12 and model the economic impact of and third party country spillover from the reduction of non-tariff measures (NTMs).

How Ready Is Indonesia to Open Government Procurement à la TPP?

Government procurement is an important area of economic regulation in every nation, and free trade and comprehensive economic agreements are becoming central venues for adopting procurement standards. Based on arguments for efficient government spending on goods and services, opening commercial opportunities for local firms abroad, and larger concerns of social protection and policy pursued through procurement decisions, countries like Indonesia now need to consider whether they are ready to go down this path. This chapter analyzes in some detail the requirements of the World Trade Organization (WTO)’s Government Procurement Agreement and similar provisions of the Trans-Pacific Partnership (TPP) to assess which reforms, and political choices, Indonesia would need to make to bring its current system into compliance with these international norms. It argues that the costs, benefits, and challenges must be carefully weighed and counsels for a cautious and phased-in opening.

Customs Administration and Trade Facilitation in TPP: The Missing Development Agenda

This chapter provides a critique of customs administration and trade facilitation in the Trans-Pacific Partnership (TPP), suggesting that, at best, trade facilitation was an afterthought to the negotiation process. While this is not in itself problematic, the drafting of the customs administration and trade facilitation chapter of TPP, which remains functionally intact in TPP11, was reflective not only of insouciance toward how trade facilitation might apply in this megaregional agreement, but also toward how trade facilitation has developed in a legal context, as it fails to acknowledge the developments enshrined in the WTO Trade Facilitation Agreement (TFA). In light of recent global criticism of trade liberalization, addressing development concerns in its text would have made TPP more attractive to non-members. Future megaregional agreements would benefit from including a strong development agenda in their negotiations.

TPP and China: A Tale of Two Economic Orderings?

How China reacts to a potential US-led TPP or the current TPP11, and whether a China-centric ordering is compatible with a US-led one, will be determined by both domestic and geopolitical factors. These include China’s domestic economic structure and reform agenda, as well as China’s relative power vis-à-vis the United States and the strategic interaction between the two countries. Due to a variety of domestic constraints—such as the dominant role of SOEs and a reliance on industrial policy to move up GVCs—TPP or TPP11 is unlikely to make China substantially deepen its domestic economic reform or converge toward a hard law-based liberal economic ordering. Nevertheless, China’s perception of the potential negative economic and geo-political impacts of a US-led TPP has strengthened its will and efforts to establish a China-centric regional ordering: China has accelerated both its RCEP negotiations and the implementation of its ambitious Belt and Road Initiative. A China-centric ordering will exhibit mixed features of both market and statist components.

TPP and Environmental Regulation

This chapter examines the environment-related provisions of the Trans-Pacific Partnership Agreement (TPP) to assess how and how much they contribute to a larger megaregulatory program for the Asia-Pacific region. TPP calls for “high levels” of environmental protection and effective enforcement; incorporates duties from several multilateral environmental agreements; adds new provisions addressing several important environmental problems; mandates administrative best practices; promotes corporate social responsibility and the use of voluntary certification systems; and provides implementation mechanisms for most of these provisions ranging from Party negotiations to committee processes and binding arbitration. On the whole, it promotes a model of environmental regulation consistent with that of the most OECD countries. The resulting movement toward cross-border regulatory alignment is likely to make member state environmental programs increasingly legible and navigable for transnational business actors. Alignment dynamics are likely to contribute to increased economic and political integration through implementation of common administrative techniques, increasing levels of communication and idea-sharing among mandated committees and resulting networks of officials, and increased trade and regulatory interactions across member states. While these developments seem likely also to lead to modest strengthening of environmental regulation in some member states, they clearly leave the dominant role to markets and trade as the driving forces in megaregional integration. Finally, TPP’s environmental regulatory program is quite different from China’s current model, and seems likely to provide an important arena for engaging and countering Chinese policies. While TPP’s environmental provisions are likely to spur improved environmental regulation in some member countries, they do not pre-figure a governance system capable of controlling the environmental degradation wrought by continuingly intensifying production and trade.

After TPP Is Before TPP: Mexican Politics for Economic Globalization and the Lost Chance for Reflection

This chapter presents an analytical pathological appraisal of elite thinking and mobilization in Mexico after the Trump administration withdrew from TPP and forced Mexico to engage in NAFTA renegotiations. It examines the strategies developed by political and economic elites in response to the threat of trade war coming from Mexico’s most important trade partner. This analysis shows that, although Mexican elites developed sophisticated heuristics in order to confront the immediate challenge from the government in Washington DC, they did not engage in what should be a very important debate about Mexico’s role in the reconfigurations of global trade and order. This is a missed opportunity for Mexico which could affect its role in the ongoing reconfigurations of global trade and law, and thus its future stature in world politics.