Strategic Interests of Participating US and Southeast Asian Economies

U.S. interests in the TPP

On January 23, 2017, President Donald Trump signed a Presidential Memorandum addressed to the United States Trade Representative (USTR) formally instructing the USTR to officially “withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP), to permanently withdraw the United States from TPP negotiations.” 

Source: U.S. President Donald Trump, January 23, 2017

Since the withdraw of the United States from the TPP, the remaining eleven members of the agreement have expressed both their respect for the Trump administration’s decision as well as their disappointment.   Many of the eleven governments expended a great deal of domestic political capital in successfully concluding the TPP agreement on October 5, 2015. The Governments of Malaysia and Japan formally concluded their domestic ratification processes for the TPP in 2016.  In March, the Government of Singapore announced its intention to conclude its ratification process in 2017.  

Since the January 23rd announcement, the group of TPP-11 nations have continued to explore options on if and how the TPP agreement could be moved forward. On March 16, 2017, TPP-11 officials met in Chile and issued a call supporting an expansion of trade between Asia and the Americas. In April, Canada will host a meeting of the Chief Negotiators from the TPP-11 nations.  In May, on the sidelines of the APEC Trade Ministers meeting, Vietnam will host a meeting of the Trade Ministers from the TPP-11 nations.  

While it’s safe to assume that TPP-11 members Canada and Mexico are likely to focus on renegotiating the NAFTA agreement before deciding what to do with the TPP, other members of the TPP-11 are either publicly signaling their interest to move the TPP forward or simply reserving their positions as a hedge until greater clarity on the future of U.S. trade policy is revealed.

The Trans-Pacific Partnership is the most ambitious trade negotiation in the world. The twelve nations involved make up 40 percent of the world’s GDP.  The TPP is the most expansive trade agreement the United States has negotiated in two decades, and was initiated to address many of the challenges and barriers unique to today’s global economy.  "It’s the highest standard trade agreement in history.  It eliminates 18,000 taxes that various countries put on American goods.  That will boost Made-in-America exports abroad while supporting higher-paying jobs right here at home.  And that’s going to help our economy grow."

Source: U.S. President Barack Obama, November 5, 2015

Positions of participating ASEAN member states


The withdraw of the United States from the TPP earlier this year has had a significant impact on the Government of Malaysia’s re-assessment of the costs and benefits of the TPP to its economic interests.  For Malaysia, the U.S. withdraw was a significant disappointment.  The Government of Malaysia made obtaining preferential market access to the U.S. its #1 negotiating objective, because Malaysia already has preferential market access to many of the other members of the TPP.  The Government of Malaysia also used the expected benefits of greater market access to the U.S. for Malaysia, to convince some segments of society to withdraw their political opposition to the TPP.  The Government of Malaysia’s 2017 trade policy priorities include: Participating in the TPP-11 process (but has noted that the TPP is much less valuable for Malaysia without the United States and that it would prefer to re-negotiate some elements of the TPP to conclude the TPP 11 process); implementing some of the TPP related reforms necessary to meet its commitments; continuing to pursue its objectives in the RCEP negotiations; and continue to support the continued formation of the ASEAN Economic Community (AEC).  Given that Malaysia also has an experience with conducting bilateral FTA talks with the United States, to date Malaysia has not indicated publicly if such a path is also a priority in its trade policy calculations.  Given that Malaysia is likely to hold a general election this year, pursuing any “new” trade policy initiative may not be politically feasible until 2018.

Sources: TPP breakdown a 'missed opportunity' for Malaysia, says MustapaMalaysia says renegotiation of TPP needed if it proceeds without the US


Since the withdraw of the United States from the TPP earlier this year, the Government of Singapore has publicly noted both its disappointment and its strong support for participating in the TPP-11 process to bring the TPP agreement into force without the U.S.  Given that Singapore has many FTA’s with TPP-11 nations including the U.S., the Government of Singapore has signaled its interest in a TPP-11 process which would allow the TPP agreement to be brought into force sooner rather than later.  In this context, Singapore joins TPP-11 nations Japan, New Zealand and Australia in favoring approaches which keep the agreement as is and only modify the going into force provisions.  Singapore is likely to also have an interest in the TPP-5 approach (Australia, Japan, Singapore, New Zealand and Brunei) to bring the agreement into force.

Source: Singapore 'supports joint efforts' to sustain TPP: Lim Hng Kiang ReadTPP sans US: Viable or no? Trade analyst weighs in


Since the withdraw of the United States from the TPP earlier this year, the Government of Vietnam has publicly noted both its disappointment, but also its continued interest in exploring other ways for expanding US-Vietnam economic relations.  The Government of Vietnam’s trade policies are focused on developing preferential market access relations with the world’s leading economies as a means of supporting its continued economic growth.   Vietnam is hosting the 2017 APEC Summit in November and recently hosted a TPP-11 Ministerial meeting to explore ways of bringing the TPP agreement into force without the U.S.  During the recent visit of Vietnam’s Prime Minister to Washington, he noted Vietnam’s desire to keep its trade policy options open.   Like many nations, the Government of Vietnam will closely watch the USG’s approach to re-negotiate NAFTA with TPP-11 members Canada and Mexico, to evaluate its future bilateral trade policy options with the United States.

Source: Vietnam Explores Its Trade Options With the U.S. -- UpdateWhat benefits will Vietnam get from TPP without the US?Vietnam's White House lobbying coup secures strategic gains


As one of the 4 original members of the P-4 group, the Government of Brunei viewed the TPP as a policy instrument which could help promote economic diversification in Brunei.  The withdraw of the United States from the TPP has not fundamentally changed that position and Brunei continues to participate in the TPP-11 process of exploring ways of bringing the TPP agreement into force without the U.S.  In addition, Brunei continues to explore ways of leveraging its participation in the formation of the ASEAN Economic Community (AEC) and in the RCEP negotiations as catalysts for supporting economic diversification.  

Source: TPP chief negotiators to meet in Japan in mid-July