On Monday, to much fanfare, the United States , Japan , Canada , Australia , and 8 other nations on both sides of the Pacific concluded a “mega” free trade agreement, the Trans-Pacific Partnership (TPP). On some measures this trade deal is the largest ever outside of the World Trade Organization (WTO)—it is said to “cover” 40% of the global economy. The deal, whose detailed terms have yet to be released, also addresses important trade-related matters such as policies towards intellectual property, state-owned enterprises, and use of local parts, components, labour, and the like. At this early stage, what are the implications for economies outside this new exclusive club? Should they (a) keep calm and carry on, (b) panic, or (c) revisit their trade strategies towards the WTO and free trade agreements? Keep Calm and Carry On? Some business associations, analysts, and trade negotiators will fret that firms based outside the TPP free trade zone will lose out. Quite frankly, at this stage no one can know for sure how large those losses will be—but why let such details get in the way? These players will pile on pressure on governments to engage in trade talks in the World Trade...
Written by Simon J Evenett