INTRODUCTION

The Pakatan Harapan (PH) coalition rose to power at the federal level in the 14th general election in May 2018 upon defeating the longstanding dominant and authoritarian Barisan Nasional (BN), only to fall less than twenty-two months after its prime minister Mahathir Mohamad resigned. This led to the appointment of Muhyiddin Yassin as the country's eighth prime minister. Since 1 March 2020, when the newly formed political coalition Perikatan Nasional (PN) took over the federal government, there has been unprecedented political instability, anomalous for a country that had only ever experienced the BN rule up to 2018. This resulted in changes in several states, with PH losing Johor, Malacca, Perak and Kedah as well. The Sabah state election also saw PH-aligned Parti Warisan Sabah (Warisan) being voted out of power, to be replaced by the PN-aligned United Alliance of Sabah. The three PH-led states of Selangor, Penang and Negeri Sembilan have remained stable, however, and have survived the national-level storm.

Selangor's situation is of particular interest. Of the original fifty seats that PH had, twenty-one were held by People's Justice Party (Parti Keadilan Rakyat, PKR). Given that former Menteri Besar Azmin Ali was one of the chief architects behind the Sheraton Move in February 2020 that led to the installation of the PN government, it was widely expected that this would cause some instability within PKR, which would in turn affect the Selangor state government's own position. Yet ten months later, the Selangor state government continues unwaveringly in the midst of the national political turmoil.

Selangor did experience several defections: four PKR assemblypersons defected to Parti Pribumi Bersatu Malaysia (Bersatu) and four of the five Bersatu assemblypersons although no longer part of the PH coalition (after Bersatu left PH) have continued to be PH-friendly independents as “followers of Tun” (Mahathir), with the exception of Selangor Bersatu Chairman Abdul Rashid Asari who, as a Muhyiddin supporter, supports PN. These defections have not been sufficient to change PH's position in Selangor, where it continues to hold forty-one of the fifty-six seats.

The economic, political, strategic and cultural dynamism in Southeast Asia has gained added relevance in recent years with the spectacular rise of giant economies in East and South Asia. This has drawn greater attention to the region and to the enhanced role it now plays in international relations and global economics.

The sustained effort made by Southeast Asian nations since 1967 towards a peaceful and gradual integration of their economies has had indubitable success, and perhaps as a consequence of this, most of these countries are undergoing deep political and social changes domestically and are constructing innovative solutions to meet new international challenges. Big Power tensions continue to be played out in the neighbourhood despite the tradition of neutrality exercised by the Association of Southeast Asian Nations (ASEAN).

The Trends in Southeast Asia series acts as a platform for serious analyses by selected authors who are experts in their fields. It is aimed at encouraging policymakers and scholars to contemplate the diversity and dynamism of this exciting region.

THE EDITORS

Series Chairman:

Series Editor:

Editorial Committee:

EXECUTIVE SUMMARY

• • When the Pakatan Harapan (PH) federal government fell in February 2020, PH also lost control over the states of Johor, Malacca, Perak and Kedah. In Sabah, PH-aligned Warisan was replaced by the PN-aligned United Alliance of Sabah.

• • PH maintained its hold on three states—Selangor, Penang and Negeri Sembilan. Selangor's position is of unique interest, given the largest share of PH assemblypersons comprising members from the People's Justice Party (Parti Keadilan Rakyat, or PKR), the party which has faced significant elite splits in 2020.

• • The present stability of PH's survival in Selangor can be accounted for by the sheer majority it possesses within the legislative assembly, comprising forty-one out of fifty-six state seats. Unless a significant share of assemblypersons were to defect, the change in state government would be highly unlikely.

• • PH built a strong base in Selangor during its time in power over more than a decade, securing performative legitimacy and rooting itself strongly within the community.

• • PH has benefited from the highly urbanized and educated demographic profile of Selangor. However, the economic fallout from the COVID-19 pandemic has likely changed the landscape, which may in turn affect how constituents will now respond to goodies offered by the federal government.

• • Although PH in Selangor has survived the national storm, its future performance remains uncertain. This year's political realignment, public opinion towards PN and the 2018 redelineation exercise where the number of Malay-majority seats has grown may hamper PH's ability to maintain its strong margin.

• • The political fragmentation that continues to unfold will see further party and coalitional realignment, which will invariably impact PH's strength in Selangor.

Introduction

After more than thirty years of economic reforms (Đổi Mói), Vietnam has made a remarkable transition to a market economy. The country has reached new heights in socio-economic development in general, and economic growth in particular. For example, between 1990 and 2006, Vietnam witnessed high and sustained economic growth of 7.44 per cent per year on average. Recently, in line with economic growth, more resources for development have been mobilized, resulting in positive structural shifts and significant improvements in living standards of the country's population. More importantly, Vietnam has also surpassed the low income threshold, formally becoming a low middle income country in 2008.

The aforementioned achievements resulted from the economic and political reforms under Đổi Mói through three channels: marketoriented economy; macroeconomic stability; and international economic integration. Additional reforms in the form of state-owned enterprise (SOE) restructuring, private and financial sector development, public expenditure management and trade liberalization also proved crucial. These facilitated Vietnam's international economic integration by attracting more foreign investments, generating more opportunities for the business community, and adopting the international best practices in several institutions. Economic liberalization and deeper integration into the international economy have also created momentum for Vietnam to carry out its pending domestic reforms. In fact, during periods of maximum integration (1989–96 and 2000–7), the country enjoyed unprecedented socio-economic improvement.

Being a part of a mega free trade agreement (FTA) like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is not a start and/or end point of Vietnam's global integration process. The CPTPP, however, is considered a model treaty for the twenty-first century because of its overwhelming scope, scale and influence compared to other agreements—both regionally and globally. Being the least competitive and developed of all CPTPP members, Vietnam participated enthusiastically in the agreement's long negotiation process. Despite the official withdrawal of the United States in early 2017, Vietnam has been optimistic about the progress and conclusion of the agreement, demonstrating its willingness to promote free trade and regional economic integration, while simultaneously developing bilateral relations with other member countries.

Introduction

The intellectual property (IP) chapter in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) covers almost all categories of IP rights. It introduces even higher standards of IP protection than those in the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement (the so-called TRIPS-Plus provisions). The CPTPP binds the participating countries and obliges them to provide more extensive IP protection. The IP chapter under the CPTPP, however, will undermine countries’ substantive ability to deal with public health problems. First, the proposed rules will have negative implications on access to medicines by limiting flexibilities that the countries currently have under the WTO TRIPS Agreement; for example, by restricting the right of governments to allow the production, marketing and import of generic medicines. The treaty has also introduced a language that will undermine the ability of the participating countries to make use of compulsory licensing as a means to obtain differentially priced generic products and restrict the measures that can be taken to pursue the option of affordable drugs. This chapter aims to examine the CPTPP IP provisions related to pharmaceuticals and assess their possible impact on public health. In order to do so, Thailand's experience with the TRIPS-Plus IP rules, together with the implications on access to medicines, is presented as a case study.

General Background of the CPTPP

In the late 1980s, a number of countries, including Taiwan, South Korea, India, Thailand and Indonesia, were placed under tremendous pressure by developed countries to improve their laws for IP protection. In particular, the United States, the world's largest trading nation, exerted significant bilateral pressure, by withdrawing or threatening to withdraw trade privileges they offered to developing countries under the Generalized System of Preferences (GSP). The developed nations also threatened to impose trade sanctions on the countries that failed to provide adequate and effective IP protection. As a result, the developing countries decided to revise their IP laws to increase the protection level even before the adoption of the WTO TRIPS Agreement in 1994. In addition to the aggressive unilateralism and bilateralism, the industrialized countries’ IP norm-setting activities also took place on a plurilateral level.

Introduction

On 4 February 2016, twelve signatory Parties—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam signed the Trans-Pacific Partnership (TPP) Agreement. However, on 23 January 2017, President Trump signed a presidential memorandum to direct the United States Trade Representative (USTR) to withdraw the United States as a signatory to the TPP. Despite the initial uncertainties created by the US withdrawal, the eleven remaining countries signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018.

While the TPP has since been given a new name, the agreement text has remained largely the same. It can therefore be argued that the current CPTPP text was mainly based on the US free trade agreement (FTA) model as the United States was previously the major demandeur for most of the thirty constituent chapters. It was during the TPP negotiations that the United States had introduced a new standalone chapter, Chapter 17, to regulate state-owned enterprises (SOEs) and designated monopolies of the signatory Parties. The eleven CPTPP members had agreed to not renegotiate the text of TPP Chapter 17; instead, the current CPTPP Chapter 17 has minor amendments in terms of some of the Parties’ date of enforcement for their commitments as laid out in the chapter annexes. Currently, Chapter 17 contains the most comprehensive trade-based regulations on SOEs. This has two key implications. First, it may set the standard for future SOE rules in trade agreements, including FTAs. Second, countries that are keen to be signatory Parties to the CPTPP in the future will see their SOEs being regulated by Chapter 17.

This study is organized as follows. The next section discusses the international rules on SOEs and aims to answer three questions: Why are there international rules on SOEs? What are the current international rules on SOEs? And how are SOE rules incorporated into FTAs? The third section then discusses the genesis of CPTPP Chapter 17 on SOEs and designated monopolies.

Introduction

The withdrawal of the United States from the Trans-Pacific Partnership (TPP) dramatically disrupted the long-standing trade agenda of the Asia Pacific. The region's governments have pursued trade and investment liberalization strategies for at least a quarter of a century, and many recently participated in both the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) negotiations. Since the withdrawal of the United States, not all of the remaining members have ratified the CPTPP. Should these countries still move forward with the agreement? Should they, instead, seek bilateral agreements that the United States still seems interested in concluding? Or should the region simply just focus on RCEP?

This chapter explores the choices facing Asia Pacific governments from the economic and political economy perspectives. The economic analysis presented here confirms that US withdrawal has been costly not only for the United States, but also for its Asia Pacific partners. But, in addition, it shows that significant gains are possible from less rigorous but wide-membership trade agreements such as the RCEP, and from high-quality trade agreements such as the CPTPP without the United States. As Schott (2017) noted, “bigger is better” with respect to Asia Pacific trade agreements, but this analysis also shows that “better is bigger” in the sense that higher-quality agreements generate larger benefits. As explained below, these results are supported by simulation studies similar to those conducted earlier for the TPP including the United States (Petri and Plummer 2016; Petri, Plummer, and Zhai 2012).

From a geopolitical perspective, new Asia Pacific agreements will increase the leverage of individual countries against bilateral pressures and help keep trade liberalization on the global agenda. In time, these agreements will likely attract other partners, too. For example, if an eleven-member CPTPP agreement later admitted the five Asia Pacific economies that have expressed interest in the alliance in the past (thus creating a TPP16), the total gains would rival those from the original agreement with the United States. Benefits could be further amplified if China, Europe, and/or the United States sought membership in the future. New agreements would also give members expanded influence over global rules.

This edited volume has taken a long time to complete. The original plan was to publish an edited volume on the potential impact of the Trans-Pacific Partnership (TPP) Agreement on Southeast Asia based on papers presented in a series of seminars held at the ISEAS – Yusof Ishak Institute in 2016. This plan was put on hold following the uncertainties created by the withdrawal of the United States from the TPP in January 2017. The subsequent signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018 convinced us to resuscitate the book project. Our contributors have had to revise their chapters to take into account, as much as possible, the major changes brought about by the new deal.

We are confident that this volume will continue to be important and relevant in light of the plethora of global political and economic challenges that have emerged in recent times, such as the rise of protectionism, the US-China trade war and the Covid-19 pandemic. We hope that this volume will serve as a useful reference to anyone keen to understand the CPTPP—its nature, evolution and impact.

This book project would not have materialized without our contributors. We thank them for their patience and willingness to reconfigure the chapters after the TPP was transformed into CPTPP. At ISEAS, the support of Director Choi Shing Kwok and Senior Advisor Tan Chin Tiong has been invaluable. We would also like to thank Ng Kok Kiong and Sheryl Sin Bing Peng of the Publications Unit for their help in finalizing and publishing this edited volume.

Background

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) consolidates most of the initial Trans-Pacific Partnership (TPP) provisions, yet suspends twenty-two provisions from the chapters on trade facilitation, investment, services, public procurement, intellectual property rights (IPR), and environment and transparency, effectively lowering the threshold for its enactment. The agreement establishes rules covering new and broader areas, such as e-commerce, and the procurement of environment and government. Moreover, while tariff schedules on 95 per cent of trade in goods are to be removed in the long term, the commitments to liberalize several key commodities, technical barriers to trade, competition, state-owned enterprises (SOEs) and small and medium-sized enterprises (SMEs), labour, and dispute settlement remain unchanged.

The CPTPP is expected to enhance trade among countries in the Asia Pacific through: the fundamental elimination of tariff and nontariff barriers for goods; developed access for services suppliers in a broader range of sectors; improved facilitation of investments; enhanced access to government procurement contracts; and updated rules to solve emerging trade challenges, which in turn will lead to higher flow of goods, services and investments within the region. In particular, the agreement is expected to advantage a number of sectors, including financial services, fishery and seafood, forestry, agriculture and food, and metals and minerals. Furthermore, it is estimated that the net benefit from liberalization of trade in goods and services to all participating countries will amount to roughly 0.3 per cent of their combined GDP in the medium term.

This chapter tries to assess Indonesia's interest in the CPTPP. It has several objectives. First, it discusses why Indonesia, in addition to its WTO membership, needs to increase regional economic engagement, from ASEAN's centrality in the ASEAN+ framework to the landmark mega regional economic cooperation in the current global economic scenario. Second, it explains the relevant pull and push factors behind this aim. Pull factors are associated with Indonesia's largest export destination countries—the United States and Japan. The push factors, on the other hand, are related to Indonesia's CPTPP competitors—Vietnam, Malaysia and Singapore. Third, the study elaborates on Indonesia's interest in joining global value chains (GVCs) to enhance involvement in the booming global production networks.

Overview

The appetite for regional economic integration has waxed and waned over time. Since the failure of the Doha Development Round of multilateral trade negotiations in 2008, countries in Southeast Asia have continued to show interest in greater regional economic integration. This has manifested in several forms and at several fronts—both intra- and inter-regionally. A key initiative that pre-dates the collapse of the Doha Round is the ASEAN Economic Community (AEC), which was formally established on 31 December 2015. It remains a key focal point for regional economic integration for ASEAN member countries. Simultaneously, ASEAN countries have also negotiated the free trade agreements (FTAs) with other countries that already have FTAs with the Association's member countries.

A smaller subset of Southeast Asian nations—namely Brunei, Malaysia, Vietnam and Singapore—and eight other countries from the Asia Pacific came together to participate in the Trans-Pacific Partnership (TPP). Even though the TPP negotiations were successfully conclude and the agreement was signed in February 2016, the United States’ withdrawal from the TPP cast significant doubts on its future. The remaining eleven countries subsequently renegotiated the agreement successfully, resulting in the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. To date, seven of the TPP signatory countries have ratified the CPTPP, where it has entered into force. Of the four Southeast Asian nations that have signed the CPTPP, only two countries—Singapore and Vietnam—have ratified the agreement; Brunei and Malaysia have yet to do so at the time of writing.

The CPTPP, in its current form and in its earlier manifestation as the TPP, has been touted as a “twenty-first century trade agreement”—a lofty phrase that conveys the agreement's comprehensiveness and its usefulness as a benchmark for all other subsequent trade deals. Despite this, there is clearly no consensus about the impact of the CPTPP in terms of its costs and benefits. To complicate matters, such calculus—as some have argued—extends beyond economics. The political economy of trade agreements is also not confined to domestic politics.Regional geopolitics matter, too. The ongoing trade dispute between the United States and China exemplifies this. This brings us to the goal of this edited volume.

Introduction

Up until January 2017, the Trans-Pacific Partnership (TPP), the mega free trade agreement (FTA) that enveloped 40 per cent of the world GDP and whose twelve members represented a market of 800 million people, was at the centre of global trade talks. It was the most comprehensive and ambitious FTA among all existing agreements then, covering several controversial issues. Many countries, including Indonesia, Thailand and the Philippines, also expressed interest in joining the TPP.

On 23 January 2017, however, US President Donald Trump signed a Presidential Memorandum to withdraw the United States from the TPP, casting doubt on the agreement's future. Given that at least six signatory countries constituting 85 per cent of the aggregate TPP GDP (in 2013) were needed to ratify the deal, the TPP in its original form could not move forward without America—since the United States and Japan together accounted for 60 per cent of this value (Petri et al. 2017). Subsequently, the remaining eleven member countries, led by Japan, Australia and New Zealand, decided to forge ahead without the United States, by launching a new agreement titled the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). As negotiations continued, the participating members suspended some of the agreement's more contentious topics in order to revive regional trade and, perhaps, induce more countries to join this new pact, including the possible return of the United States in the future. Agreement on the CPTPP was reached swiftly in January 2018, and the formal signing ceremony was held on 8 March 2018 in Santiago, Chile.

For Thailand, the main difference between the CPTPP and TPP lies in the fact that pharmaceutical data protection (i.e., data exclusivity) and patent extension, both of which were strongly endorsed by the United States, are excluded from the revised agreement.

Since the new millennium, the Thai government has been interested in signing FTAs with other countries, including the TPP/CPTPP economies (The Nation 2015, 2016; The Diplomat 2016; Reuters 2018). This was based on a conviction that FTAs would help private firms remain competitive in export markets. Prior to the withdrawal of the United States, Thailand had, on numerous occasions, expressed keenness in becoming a member of the TPP to gain preferential access to the United States in certain products, especially garments and processed foods.

Introduction

Malaysia's dependence on trade can be attributed to its geographical location and the relatively small size of its domestic economy compared to most of its regional neighbours. The use of foreign direct investment (FDI) as a tool for industrial development has further strengthened this dependence, as a majority of such investments in Malaysia and the region have been used to forge regional production networks for enhancing their cost and efficiency of production. This gave rise to a flow of “back and forth” trade, especially in intermediate goods, leading to a progressive increase in the share of merchandise trade in GDP to a peak of 193 per cent in 2000, before falling steadily to 131 per cent in 2014 (ADB 2015).

Accessing markets for exports is therefore a critical component of Malaysia's trade policy. For example, although the country's original motivation for joining the Association of Southeast Asian Nations (ASEAN) may have been geopolitical in nature, the economic rationales grew stronger over time, particularly in the wake of the 1973–75 recession in the United Kingdom and the United States. ASEAN's subsequent Free Trade Area, or the ASEAN Free Trade Area (AFTA), promulgated in 1992 was Malaysia's first venture into regional Free Trade Agreements (FTAs). The country is also a member of the ASEAN Economic Community (AEC) that evolved from the AFTA. The AEC was subsequently launched in 2015.

At the same time, Malaysia became a founding member of the World Trade Organization (WTO) in 1995. However, the protracted negotiations under the Doha Round of the WTO for further multilateral liberalization led to a flurry of bilateral and regional initiatives in Southeast Asia, including Malaysia, as alternative trade liberalization commitments to the WTO. To date, Malaysia has signed and ratified seven bilateral agreements, and is a party to the ASEAN+ agreements with China, Japan, Korea, India, and Australia and New Zealand. It is also in the process of negotiating another four FTAs.

Malaysia joined the Trans-Pacific Partnership (TPP) in the third round of negotiations in October 2010, and signed the agreement in February 2016 with the other eleven founding members.

Introduction

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was signed on 8 March 2018 by eleven countries—Japan, Brunei, Malaysia, Singapore, Vietnam, Australia, Canada, Chile, Mexico, New Zealand and Peru. The agreement is bound to affect business activities of Japanese manufacturing affiliates operating not only in CPTPP member countries but also in non-member economies. While the former effect will certainly be positive, the latter could be negative. According to ASEAN Stats, Japan ranks very high in terms of value of foreign direct investment (FDI) flow into ASEAN countries; therefore, any change in the trend will have a significant impact on the grouping.

This chapter investigates how Japanese manufacturing affiliates in ASEAN are expected to change their business activities following the implementation of the CPTPP. The liberalization levels suggested in the CPTPP are very high; all member countries are expected to eliminate tariffs for almost all products. With the exception of Japan, tariff elimination rates are expected to reach 99 or 100 per cent in all countries, both in terms of the number of tariff lines as well as trade value. In the case of Japan, this figure stands at 95 per cent—the highest among all its recently-concluded regional trade agreements (RTAs). In order to further investigate the impact of the trade agreement, it is important to discuss the general effects of tariff reduction on business activities in CPTPP member countries. This chapter begins with a discussion of the effects on their exports to other CPTPP members, followed by the impact on Japanese manufacturing affiliates in ASEAN.

The rest of the chapter is organized as follows. The next section provides an overview of the distribution of Japanese manufacturing affiliates across ASEAN economies. The third section focuses on the general effects of tariff reduction on exports from ASEAN CPTPP member countries. The subsequent section examines the effects of tariff reduction on Japanese manufacturing affiliates in ASEAN, while the fifth section concludes the chapter.

Distribution of Japanese Manufacturing Affiliates in ASEAN Member Countries

Information on the distribution of Japanese manufacturing affiliates across ASEAN member countries can be obtained from the “Basic Survey of Overseas Business Activities” collected by the Ministry of Economy, Trade and Industry (METI), Japan.

Introduction

The Trans-Pacific Partnership (TPP) free trade agreement (FTA) was signed on 4 February 2016. Prior to and following the signing of the TPP, significant media and public attention focused on its investment chapter, especially the investor-state dispute settlement (ISDS) provisions. For example, one report asserted: “Indonesia could fall into bankruptcy if the biggest market in Southeast Asia [joins the TPP], which would allow investors to sue the government in international arbitration courts through investor-state dispute settlements” (Jakarta Post, 15 February 2016). Yet a considerable proportion of additional economic growth modelled from the TPP was expected to come from more foreign direct investment (FDI) generated by liberalization commitments in that FTA (Petri and Plummer 2016).

Ratification of the TPP fell into doubt following newly-elected President Trump's withdrawal of signature by the United States in January 2017. But on 8 March 2018, the other eleven signatories (including four Southeast Asian states) re-signed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). It made minimal changes to the original TPP's investment chapter and its ISDS provisions as well as loosening the requirements for this FTA to come into effect. Accordingly, there are practical and theoretical lessons to be drawn from the investment chapter and ISDS provisions in the agreement. For example, why were the Southeast Asian countries involved agreeable to ISDS? As the second section of this chapter outlines, ISDS-backed investment treaty commitments are already widespread across the Asia Pacific region (Bath and Nottage 2020). They have been offered in FTAs and earlier standalone bilateral investment treaties (BITs) signed by Southeast Asian states, the option to promote FDI especially where host states lack domestic laws and courts meeting international standards, which are current TPP signatories as well as potential new partners.

Other countries in the region that showed some interest in the TPP, such as Thailand, the Philippines and Indonesia (Crockett 2016), have each been subjected to a few arbitration claims brought by foreign investors and these countries consequently reviewed their approach to investment treaties and ISDS. Yet, until the end of 2016, none of them, and indeed no Southeast Asian state, had ever had to pay out on an arbitral award where the host state's consent to international arbitration has been given through an investment treaty. Nor has any Southeast Asian state declared that it would eschew ISDS completely in future treaties.

Introduction

Preferential trade agreements are negotiated by states. By definition, they are political in nature. As they involve more than one state, by definition, they are shaped by geopolitical interests as well as economic and commercial ones. The larger the preferential trade agreement, the more geopolitical concerns are likely to matter in the intent of the deal and its ramifications. Likewise, the more powerful the states involved in the negotiations and eventual deal, the more geopolitical concerns are likely to matter in intent and ramifications.

The disastrous outcomes of World War I and World War II centred in Europe when power political considerations trumped all else were the necessary conditions for the establishment of the post-war Bretton Woods System and the General Agreement on Tariffs and Trade (GATT) at the global level (Office of the Historian n.d.) and the European Union (EU) at the regional level (Silva 2009). Both were created to foster economic exchange as a liberal means to moderate and direct power political impulses away from war. The Cold War bipolar interstate structure determined who was in and out of these new global and European economic bodies.

The Trans-Pacific Partnership (TPP) and its replacement following the US withdrawal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), reflect this overarching truth.

This chapter will go deeper and analyse how the four stages of the TPP's evolution each highlight different, but not all mutually supporting, elements about this geopolitical truth and its determining effects on preferential trade agreement negotiations and how these negotiations and agreements are interpreted. The first phase is prior to the United States’ decision to join the TPP negotiations. The second phase, the main focus of the chapter, is from when the United States joined the TPP negotiations to the signing of the agreement in early 2016. The third phase is the US withdrawal from the TPP under President Trump. And the fourth stage is the development of the CPTPP after the United States withdrew.

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