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Accession to TPP: Veto Power and “Opt-Out” Option

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Paradigm Shift in International Economic Law Rule-Making (ODS 2017)

Part of the book series: Economics, Law, and Institutions in Asia Pacific ((ELIAP))

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Abstract

One of the most important policy questions relating to the future impact of the Trans-Pacific Partnership on the global and regional economy is whether other countries in the region, particularly China, will join the partnership. While several commentators have made some observations regarding the future prospects of TPP expansion, little scholarly analysis has been conducted. To go beyond the speculation of a certain country’s accession to TPP, we first attempt to generalize the issue before moving on to a specific question. We conduct a comparative analysis of a large number of regional trade agreements (RTAs) for a better understanding of the parameters of RTAs that are critical for membership expansion. This general framework enables us to conduct a systematic examination of specific membership expansion cases, such as China’s membership in TPP. The paper also proposes a necessary “accession practice” that truly facilitates new members’ participation to TPP and RTAs in general.

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Notes

  1. 1.

    Baldwin and Low (2009).

  2. 2.

    While there are studies on the accession to institutions (Kelley 2004), those focusing on accession to RTAs are limited. Hamanaka (2012) found that South–South RTAs based on the Enabling Clause tend to have an accession clause.

  3. 3.

    Hamanaka (2014a).

  4. 4.

    Regional Trade Agreements Information System (RTA-IS) Database of WTO. Available at: http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.

  5. 5.

    Ruggie (1992).

  6. 6.

    Capie and Evans (2002) 39.

  7. 7.

    Krauss and Pempel (2007).

  8. 8.

    Capie and Evans (2002) 40.

  9. 9.

    Ruggie (1992) 571.

  10. 10.

    It is not entirely clear whether withdrawal of membership from RTAs shall be notified to WTO, although one could argue that withdrawal is a serious modification of an RTA. In reality, no notification regarding withdrawal is included in RTA-IS. Bulgaria, Croatia, and Romania withdrew their membership in the Central European Free Trade Agreement (CEFTA). Austria, Denmark, Finland, Portugal, Sweden, and UK withdrew membership from the European Free Trade Association (EFTA). Angola, Lesotho, Mozambique, Namibia, and Tanzania withdrew membership in the Common Market for Eastern and Southern Africa (COMESA).

  11. 11.

    For example, one condition to become a member of European Union is that the applicant should be a European country, while ‘European’ is undefined.

  12. 12.

    In addition to the 11 subsidiary RTAs listed in the Appendix 16, there are 9 subsidiary RTAs: Andean Community FTA, Commonwealth of Independent States (CIS), CIS FTA, Central African Economic and Monetary Community (CEMAC), Economic Community of West African States (ECOWAS), Economic Cooperation Organization (ECO), Gulf Cooperation Council (GCC), SAARC Preferential Trading Arrangement (SAPTA), and the South Pacific Regional Trade and Economic Co-operation Agreement (SPARTECA). Note that both CIS and CIS FTA are separately notified to the WTO.

  13. 13.

    Lao PDR has been a member since 1975, although it has not submitted a concession schedule.

  14. 14.

    Block and Herrup (1994).

  15. 15.

    Miller (1996), Zahralddin-Aravena (1997).

  16. 16.

    Block and Herrup (1994).

  17. 17.

    Gantz (2003).

  18. 18.

    Haas (1993).

  19. 19.

    From the US perspective, a ‘weak’ side agreement on labor and the environment was the result of its failed negotiations. Mexico was of the view that the imposition of labor standards by the agreement was a violation of national sovereignty. See Pomeroy (1995).

  20. 20.

    The US–Chile FTA was concluded after 14 rounds of negotiations since 2000.

  21. 21.

    Salazar (2005).

  22. 22.

    Chia and Pangestu (2005).

  23. 23.

    Brunei Darussalam decided to join the P3 negotiations in April 2005, which led to the enlargement of negotiations into P4. The Trans-Pacific Strategic Economic Partnership (TPSEP) was signed by the P4 countries in July 2005 and came into force in May 2006.

  24. 24.

    Kolsky Lewis (2011).

  25. 25.

    The TPSEP has an accession clause (Article 20.6) and is open to any APEC member and other states.

  26. 26.

    If the expansion of TPSEP were to be pursued, the US would have been a party to be admitted by P4 countries, and the US can approve other countries’ participation only after its accession. If a new agreement were to be pursued, all eight parties would be the negotiating parties on an equal footing.

  27. 27.

    USTR website: https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2009/december/tpp-statements-and-actions-date.

  28. 28.

    https://ustr.gov/sites/default/files/uploads/agreements/morocco/pdfs/TPP%20Congressional%20Notification.pdf.

  29. 29.

    James (2010).

  30. 30.

    Gao (2012).

  31. 31.

    Hamanaka (2014b).

  32. 32.

    One possible difference can be found regarding the establishment of a working group for APEC and non-APEC parties. See Footnote 33 for details.

  33. 33.

    Owing to the stipulation in para 3(a), the establishment of a working group for non-APEC members requires agreement by all parties (the ‘no objection within seven days’ rule does not seem to be applicable to the establishment of working group for non-APEC members).

  34. 34.

    Eighty-five per cent of the combined gross domestic product of the original signatories in 2013 is necessary for the Agreement to come into force. Only the US and Japan have a GDP share higher than 15%.

  35. 35.

    Elms and Lim (2012).

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Author information

Authors and Affiliations

  1. IDE-JETRO, Mihama-ku, Chiba, Japan

    Shintaro Hamanaka

Authors
  1. Shintaro Hamanaka
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Correspondence to Shintaro Hamanaka .

Editor information

Editors and Affiliations

  1. Faculty of Law, Chinese University of Hong Kong, Shatin, New Territories, Hong Kong

    Julien Chaisse

  2. Singapore Management University, Singapore, Singapore

    Henry Gao

  3. Judicial Yuan, Justices of the Constitutional Court, Taipei, Taiwan

    Chang-fa Lo

Appendix: 16 Cases of Actual RTA Accessions

Appendix: 16 Cases of Actual RTA Accessions

Name

Original signatories

Accession

Typology

ASEAN FTA (AFTA) (1992)

Brunei; Indonesia; Malaysia; Philippines; Singapore; Thailand

Vietnam (1995); Laos(1997); Myanmar (1997); Cambodia (1999)

Subsidiary

Asia Pacific Trade Agreement (APTA) (1976)

Bangladesh; India; Korea; Lao PDR; Sri Lanka

China (2002); Mongolia (2015)

Standalone

Caribbean Community and Common Market (CARICOM) (1973)

Antigua and Barbuda; Barbados; Belize; Dominica; Grenada; Guyana; Jamaica; Montserrat; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Trinidad and Tobago

Suriname (1995)

Subsidiary

Central American Common Market (CACM) (1960)

El Salvador; Guatemala; Honduras; Nicaragua

Costa Rica (1962)

Standalone

Common Market for Eastern and Southern Africa (COMESA) FTA (2000)

Burundi; Djibouti; Egypt; Kenya; Madagascar; Malawi; Mauritius, Rwanda, Sudan, Zambia, Zimbabwe

Libya (2005); Comoros (2006)

Subsidiary

East African Community (EAC) (2000)

Kenya; Tanzania; Uganda

Burundi (2007); Rwanda (2007);

Subsidiary

Eurasian Economic Community (EAEC) (2000)

Belarus; Kazakhstan; Kyrgyzstan; Russia; Tajikistan

Uzbekistan (2006)

Subsidiary

Eurasian Economic Union (EAEU) (2014)

Belarus; Kazakhstan; Russia

Armenia (2014); Kyrgyz Republic (2014)

Subsidiary

European Communities (EC) (1957)

Belgium; France; Germany; Italy; Luxembourg; Netherlands

Denmark (1973); Ireland (1973); UK (1973); Greece (1981); Portugal (1986); Spain (1986); Austria (1995); Finland (1995); Sweden (1995); Cyprus (2004); Czech Republic (2004); Estonia (2004); Hungary (2004); Latvia (2004); Lithuania (2004); Malta (2004); Poland (2004); Slovak Republic (2004); Slovenia (2004); Bulgaria (2007); Romania (2007); Croatia (2013)

Subsidiary

European Free Trade Association (EFTA) (1960)

Austria; Denmark; Norway; Portugal; Sweden; Switzerland; UK

Iceland (1970); Liechtenstein (1991); Finland (1986)

Standalone

Melanesian Spearhead Group Trade Agreement (MSGTA) (1994)

Papua New Guinea; Solomon Islands; Vanuatu

Fiji (1998)

Subsidiary

Mercosur (1995)

Argentina; Brazil; Paraguay; Uruguay

Venezuela (2013)

Standalone

Latin American Integration Association (LAIA) (1980)

Argentina; Bolivia; Brazil; Chile; Colombia; Ecuador; Mexico; Paraguay; Peru; Uruguay; Venezuela

Cuba (1999); Panama (2011)

Standalone

South Asian Free Trade Agreement (SAFTA) (2006)

Bangladesh; Bhutan; India; Maldives; Nepal; Sri Lanka; Pakistan;

Afghanistan (2011)

Subsidiary

Southern African Development Community (SADC) FTA (2000)

Botswana; Lesotho; Malawi; Mauritius; Mozambique; Namibia; South Africa; Swaziland; Tanzania; Zambia; Zimbabwe

Madagascar (2006)

Subsidiary

West African Economic and Monetary Union (WAEMU) (1994)

Benin; Burkina Faso; Côte d’Ivoire; Mali; Niger; Senegal; Togo

Guinea Bissau (1997)

Subsidiary

  1. Source Author’s compilation

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Hamanaka, S. (2017). Accession to TPP: Veto Power and “Opt-Out” Option. In: Chaisse, J., Gao, H., Lo, Cf. (eds) Paradigm Shift in International Economic Law Rule-Making. ODS 2017. Economics, Law, and Institutions in Asia Pacific. Springer, Singapore. https://doi.org/10.1007/978-981-10-6731-0_25

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