RIEB Discussion Paper Series No.2019-05

Title

TPP11 (CPTPP): Its Implications for Japan-Latin America Trade Relations in Times of Uncertainty

Abstract

The paper examines the economic and political implications of the entry into force of the TPP11 (CPTPP) on trade relations between Japan and Latin America amid the increasing anti-globalism sentiments and protectionism in the world economy. The paper argues that its entry in force sends the world the message that Japan is prepared to play a leading role in preserving the multilateral trading system and that the benefits of TPP11 are significant; it has a potential to discourage harmful trade policies by building a 21st-century rules-based trading system, with a possibility that its trade rules will become the de facto trade rules of the Asia-Pacific region. The TPP also differs from other conventional mega FTAs by incorporating development dimensions into trade negotiations. In addition, TPP11 is likely to fill a geopolitical vacuum created by the retreat of U.S. global leadership, which is unlikely, at least for now, to be filled by China's "socialist-type" trade liberalism. Another benefit of TPP11 might be that it will open to Latin America new venues and ways to construct strategic relations with the Asia-Pacific countries, and rewrite integration strategies within the proper LAC region. A more unified and enlarged regional market resulting from joint efforts between the Alliance and Mercosur, on the one hand, and more connected regional markets with the EU, EFTA and Asia-Pacific countries (e.g., Australia, Canada, Korea, Singapore, and possibly Japan), on the other, will enhance the attractiveness of LAC as a region. However, as the membership of the Pacific Alliance expands, there might emerge two similar, overlapping transpacific mega agreements in progress; this might pose a challenge to the ongoing "Japan-led" TPP process.

Inquiries

Mikio KUWAYAMA
Research Fellow of Kobe University Research Institute for Economics and Business (RIEB) and Managing Director of the Japan Association of Latin America and the Caribbean (JALAC).