TPP and Globalization in a Post-Covid World

TPP signing
TPP signing

Many analysts and commentators have argued that in a post-coronavirus world, countries are likely to become more insular; and globalization which has been on the wane in recent years is likely to diminish further in the aftermath of the pandemic.

However, a number of former policymakers, including Henry Kissinger and Gordon Brown have argued that the Covid-19 pandemic should pave the way for deeper international cooperation. Brown recommended a global government to deal with the medical and economic challenges arising out of the pandemic. He also pitched for greater cooperation between health experts, world leaders and international organizations and the setting up of a task force for the same.

It is true that the pandemic is likely to have a significant impact on ‘economic globalization’ at least in the short run, with trade and travel being disrupted. At the same time, the past few months have also been witness to international cooperation at various levels. While in certain instances, this has been driven by bilateral relations between states; the role of multilateral institutions has been important in the context of the pandemic.

Institutions like the International Monetary Fund (IMF) and World Bank have stepped in to provide financial assistance to developing countries. G20 member states too have reiterated their commitment to a joint strategy in dealing with the pandemic. On March 26, 2020, G20 members held a video conference to discuss methods for bolstering cooperation.

Trans Pacific Partnership

While there is a growing consensus that trade and travel will be severely impacted by the pandemic, the TPP (Trans Pacific Partnership) is is making concerted efforts to ensure that supply chains are not destroyed, and that at least essential travel is restored.

Keeping the supply chain intact 

Member states of the TPP like Singapore and New Zealand have agreed to remove tariffs and other trade barriers on goods which are essential to combating the pandemic — such as gloves, disinfectant and medication. They have also agreed to do the same on dairy products, meat and other foods. Singapore and Japan have also been in talks to maintain trade in essential commodities – especially agricultural and medical commodities.

Member states of TPP have also been in talks regarding the revival of essential travel. It would be pertinent to point out that TPP non-members, such as the UK too are finding common ground with TPP members. Apart from promoting cooperation within member states it has also sought to promote the narrative of ‘Globalisation’. For instance in an opinion piece written by the trade ministers of three TPP member countries — Singapore, Australia, New Zealand — along with the trade minister of UK pitched for the need for closer trade linkages, while also providing instances of how these countries had benefitted from the agreement. Said the Op-Ed:

‘We are four independent trading nations who have derived success by operating globally. Almost two-thirds of Britain’s economy is made up of trade. One in five Australian jobs is trade related. In New Zealand that number is one in four. Nearly two-thirds of Singapore’s GDP is generated by external demand.’ The Op-Ed also forcefully argued against the imposition of tariffs and trade restrictions.

Expansion of TPP

It would be pertinent to point out that the TPP is seeking to get new members on board, and the UK has already expressed its interest to join the organization. Japan will make a fresh attempt to expand the pact to include more Asian economies such as Thailand, Taiwan, Indonesia and the Philippines. One of the key motivations for Tokyo to rope in new countries into the TPP is to reduce its economic dependence upon Beijing.

TPP neither dependent upon the U.S. nor China

The TPP is yet another instance, not just of rising multilateralism in the midst of the coronavirus pandemic, but also an organization which does not depend upon China or the U.S. for navigating global trade and commerce. It was a brainchild of the U.S. President Barack Obama and his aim was to bolster the ‘Pivot to Asia’ policy, to check China’s rise in the Asia-Pacific region. The first step which President Donald Trump took was to pull the U.S. out of the deal, saying that it would harm the interests of U.S. workers. During the presidential campaign of 2016, Hillary Clinton who had served as Obama’s Secretary of State opposed the TPP, and even in the 2020 election it is unlikely that the Democrats will really pitch for a revision in the U.S. approach vis-à-vis the TPP.

It is important to pay close attention to arrangements like the TPP, which are not just pushing the narrative of interdependence but also a reiteration of the point that not every organization has to be the U.S. or China centric. TPP, with members like Australia, Japan, Vietnam and Singapore (and other countries also likely to get on board) is especially relevant in the context of pushing a new alternative not just in the Asia-Pacific region – now referred to as Indo-Pacific – but in a global context.

The views and opinions expressed in this article are those of the author.