Hugh Stephens Blog: Is the TPP really “dead”? Maybe not if you believe in “Twelve minus One”

Late last year, after Mr. Trump’s election but before his inauguration, I wrote a blog on the “Demise of the TPP and its Impact on Copyright”. The President-elect had declared the TPP to be “a potential disaster for our country” and “the death blow for American manufacturing”. He stated that he would notify the TPP partners of the intent of the United States to withdraw from the Agreement as soon as he became President. And he was true to his word, signing an Executive Order to that effect on January 23.

In my earlier blog I had stated that “for all intents and purposes the Trans-Pacific Partnership (TPP) is dead—or at the very least it will be in a state of suspended animation for a considerable period to come”. For the TPP to come into effect, the current text requires that it be ratified by six of the twelve partners comprising at least 85% of the total GDP of the negotiating partners. Without the US that can’t happen. As a result, technically it is dead in the water.

If it is not ratified and therefore does not come into effect, there will be no legal requirement on the part of the parties to the TPP to implement the gains in the area of copyright protection that were negotiated as part of the Agreement, such as the extension of the term of copyright protection in certain of the TPP countries, protection of encrypted broadcast signals, promotion of the use of legitimate software by governments and legal remedies, safe harbours and take down procedures by ISPs, to cite the most prominent commitments. Despite the disappointment of failing to crystalize the gains from the TPP, I noted that given Mr. Trump’s intention to re-open NAFTA, perhaps some of the intellectual property provisions in that Agreement would be reviewed and updated, including in the area of copyright (where Canada for example has only a 50 year term of protection except for sound recordings).

Now, just over a month into the Trump Administration, things are evolving. It appears that I, and some others, may have been premature with our TPP obituaries. With regard to NAFTA, after the meeting between President Trump and Prime Minister Trudeau, it was announced that the outcome of any NAFTA negotiation between Canada and the US would be to “tweak” the Agreement. What that means is anyone’s guess at this point. It may or may not include intellectual property provisions.

More interesting is the expression of interest on the part of many of the original TPP signatories, minus the US of course, to consider keeping all or parts of the TPP intact in what is being called a “TPP Minus One” formula. Chile, one of the TPP signatories, has invited all the other TPP trade ministers, plus non-TPP members China, South Korea and Colombia, to a meeting in Vina del Mar, Chile, on March 14-15 to discuss a potential pathway forward. The US has also been invited but at the moment Robert Lighthizer, the nominee for US Trade Representative, has not been confirmed. A number of countries, including China, Korea, Japan, Mexico, Colombia, Peru, New Zealand, and Australia, have said they will attend. Japan has been a big proponent of keeping the deal alive and the Japanese Diet has already ratified it. Japan is urging other TPP countries to do the same to demonstrate to the US the depth of support that the Agreement has among the signatories.

Canada, which has always been a bit ambivalent about the TPP, has announced that its new International Trade Minister Francois-Philippe Champagne will participate. Some critics in Canada, notably arch-TPP skeptic Michael Geist, have called for Canada to withdraw, similar to the action taken by Mr. Trump. There is no reason why Canada should do this. Rather, it should keep its options open. This is what the government seems to have decided and withdrawal does not appear to be on the table. That said, Canada has also not ratified the Agreement and is now unlikely to do. Instead it has held a series of public hearings on the TPP while waiting to see what would happen in Washington. Now that the official US position is crystal clear, the other countries have to decide whether to try to renegotiate the Agreement by proceeding without the US, keeping what Australian trade minister Steven Ciobo has called “important gains”, and even whether to add new partners.

Renegotiation will not be easy—but not impossible. Many of the chapters, such as the “horizontal” chapters on Intellectual Property, SMEs, Labour Standards, Environment or Competition Policy, for example, could be adopted with little change. With the withdrawal of the US, the main negotiations would have to take place over market access (tariff) issues between the remaining eleven, and any new entrants. (Some of the provisions in other chapters may also have been linked to market access). Many of the reforms agreed to in the IP chapter will benefit the country making the changes and even before the meeting of ministers in Chile was announced, there were reports that Malaysia and Vietnam were proceeding to implement the IP chapter commitments in domestic legislation even absent a treaty requirement to do so.

What the Chile meeting will produce in terms of concrete results is hard to say at this point. It is doubtful if China will play more than an observer role. China, as one of the motors of another trade agreement under negotiation that covers much of the Asia Pacific region (but no countries in the Western Hemisphere), known as the Regional Comprehensive Economic Partnership or RCEP, will want to monitor what is going on. However, it is unlikely to take an active role in negotiations. China will want to complete the RCEP (and assure its dominant position within that grouping) before it considers engaging formally with whatever emerges from the TPP minus the US.

For the other TPP countries, there are two important considerations. One is to keep the gains in the framework chapters of the Agreement, as outlined by Minister Ciobo, even if market access to the US is not included. A second is to keep the TPP alive in the hope that one day in the future (4 years? 8 years? or less?) the US will reconsider its rejection of an Agreement that it was largely responsible for shaping.

For copyright stakeholders, this may mean that many of the TPP gains may not be lost after all. Stay tuned.

© Hugh Stephens, 2017. All Rights Reserved.

Is the TPP really “dead”? Maybe not if you believe in “Twelve minus One”