The coverage I’ve been reading so far has been pretty weak for a structural reason: the few dedicated trade reporters who are out there write for industry rags so have a very narrow focus that wouldn’t be relevant except maybe for specific equity research, and the general international economics reporters cover trade so rarely that they don’t really know what they’re doing. The think tank research which will come out in the next few days/weeks will be a little better as there are like 4 smart ppl at Peterson and Brookings who cover this well. So, I’m gunna fix it.
Now it’s a question of how much risk there is that one or more of the countries will fail to adopt it. There have been some articles about how there’s this wellspring of opposition in the US to the deal but I think the risk that Congress doesn’t ratify it before the election is way overrated. The TPA vote was for all intents and purposes a TPP vote and nothing that’s happened over the past few months in the primaries (ie the rise of the Donald) or in the House with Boehner’s resignation that has changed that dynamic. McCarthy is very pro-trade (unsurprising as California is set for some big gains) and Chaffetz voted in favor of TPA too (but he’s not going to be speaker).
Congress will accomplish one thing and one thing only in 2016: TPP.
I also think that despite his slipping numbers there’s no way Abe isn’t going to give it his all to get this through — he signed on the dotted line because he wants this and knows how important it is to improve Japan’s economic prospects. I have no idea whether he can push it through the Diet but I’m optimistic. The Canadian election is the biggest wildcard, and Canadian politics is not interesting enough to follow if I’m not getting paid, so don’t have a real opinion on that. Maybe there could be some issues in Malaysia but I think once the terms come out they will be generous enough on bumiputera (this economic affirmative action that Malaysia has for ethnic malays that the US wanted to end through the TPP) to neutralize some opposition. Australia/New Zealand don’t want RCEP to be the dominant trade framework for Asia and every other country is too big an economic winner to want to blow this up.
There is a long tail risk that the negotiators agreed to something that really strikes a nerve and gets a big chunk of one country’s corporations to come out against the deal (ala SOPA/PIPA protests). However, since all countries have been consulting with companies all the way through this would be very surprising. There have also been so many leaks by this point that there isn’t much that can really make news anymore. If something was going to hook the broader publics in the member states enough to stop a deal my sense is that it already would have.
Geoeconomics (is this even a thing?)
Now for ‘geoeconomics,’ the biggest takeaway is the deal’s impact on Asian trade flows in general and China’s trade policy in particular. The Japan/China/ROK deal looks less important now as ROK will probably be the first nation to get into the TPP game. Trade will get diverted away from countries not in the TPP, so states like Indonesia, the Philippines, and of course China are set to lose.
This on the margin will make China more focused on liberalizing their economy and upping the ambition of their RCEP deal. But I don’t think it will make all that much difference in the end. The PRC is not going to give up the ability to do the sorts of crazy government interventions they’ve done this summer/fall even for a few extra points of GDP growth 10 years from now.