Key heads to Peru for talks on life after TPP

Prime Minister John Key makes a fleeting trip to Peru this weekend to attend the annual Apec leaders' summit in Lima, having cut from his schedule a two-day trade mission to Argentina en route after Monday's earthquakes required him to stay in New Zealand.

The Apec meeting promises to be notable for the signals the grouping of 21 Asia-Pacific economies will send to the incoming Trump administration about their expectations of the global trade agenda, now that the Trans-Pacific Partnership (TPP) has been all but buried.

There is no credible path for its passage through the US Congress in the lame-duck period following the election last week of Donald Trump as the next US president, on a protectionist agenda.

Some commentators suggest a TPP renegotiation may prove possible in the medium term but at this stage Mr Trump has yet even to appoint a new US Trade Representative to replace the incumbent, Mike Froman, who has been among TPP's strongest advocates.

However, international media suggest developing economies in the Asia-Pacific region remain committed to continuing trade liberalisation, even as the political mood in many developed economies in the region sours toward globalisation.

China proposes alternative
Late last week, Chinese president Xi Jinping began talking up the prospects of a new regional free-trade agreement that could exclude the US.

While no definitive new Asia-Pacific trade agenda is likely from the Apec summit, organisers have confirmed they expect a TPP leaders' meeting in the margins of the meeting, at which outgoing US President Barack Obama will be present for one of his last official overseas engagements.

Already extant is the Asean-led Regional Comprehensive Economic Partnership negotiation (RCEP), which is less ambitious than TPP but includes China and India, while a broader Free Trade Area of the Asia-Pacific (FTAAP) agreement lies beyond RCEP as a goal.

"We have always thought the pathways were TPP, or possibly RCEP plus other things, and now we have to rethink some of that," Apec executive director Alan Bollard was reported as saying this week.

At this stage, Mr Key is expecting numerous bilateral meetings, including with his Australian counterpart Malcolm Turnbull, the Peruvian and Chilean presidents Pedro Pablo Kuczyski and Michelle Bachelet respectively, and Canadian Prime Minister Justin Trudeau.

Mr Trump had indicated on the campaign trail that he may restructure the organs of US trade policy, which he believed were too fragmented, with potential to create a one-stop "American Desk," the Inside US Trade newsletter reported this week.

(BusinessDesk)