The United States has soured on the Trans-Pacific Partnership (TPP) during 2016, disintegrating Australia’s trade strategy and scuppering years of negotiations.
Although President Barack Obama drove development of the agreement, president-elect Donald Trump is vocal in his opposition, .
In the wake of the stagnation of the TPP, SBS News checked in with some of Australia’s trade experts to find out what's next for Australian in international negotiations.
Is it really time to forget about the TPP?
The TPP was signed by ministers from 12 nations in February 2016, including the US, Canada, Mexico and Japan. Like any international agreement, parliaments of the member countries need to ratify it before it comes into force.
That now looks unlikely. The agreement requires at least six countries, between them representing at least 85 per cent of the total GDP of the original 12, to ratify it within two years. If the US does not ratify the deal, this threshold cannot be reached.
Alan Oxley, Chairman of the APEC Study Centre at RMIT, told SBS there may still be hope for the TPP within Donald Trump’s first four-year term, citing support from senior Republicans in the US Congress.
However he acknowledged the agreement may have to be amended in order to stretch out the deadline for ratification or redrafted when the political climate allows for it.
Mike Callaghan, Fellow at the Lowy Institute for International Policy, the non-US parties to the free trade agreement should “do everything possible” to implement the TPP. That may mean reviewing concessions made with access to US markets in mind - a difficult task he noted, but a possible one.
Trade Minister Steven Ciobo responded to Trump's announcement saying he would still push for ratification; Japan's Prime Minister Shinzo Abe said .
Has time negotiating the TPP been wasted?
The years of negotiations invested in the drafting of the TPP may still prove valuable even if it is never ratified. The US and Japan do not currently share a major bilateral trade agreement, and the US - even under Trump's presidency - may seek to push on with a Japanese deal.
According to Peter Drysdale, head of the East Asia Forum at the ANU, a bilateral agreement between Japan and US could conceivably rise from the ashes of a failed TPP, even though such an agreement would face resistance on both sides of the Pacific. He also said a deal would have a significant impact on the balance of power in the Asian region.
"The Japanese are nervous about (an agreement with the US), mainly because it would mean having to deliver more genuine agricultural liberalisation,” he said. "But it would make economic and political-security sense.”
Similarly, RMIT's Mr Oxley said some of the key components of the TPP, namely the liberalisation of investment and the operation of state-owned enterprises (SOEs) may be taken up in other multi-lateral agreements. The TPP sought to lower barriers for investment in overseas countries and required that SOEs operate more like companies in a non-discriminatory manner.
A protester holds signs against the Trans Pacific Partnership during a rally in Lima, Peru, Friday, Nov. 18, 2016. (AAP) Source: AAP
What are Australia’s priorities in trade now?
The Department of Foreign Affairs is . The one closest to conclusion is a deal with Indonesia and Mr Ciobo has stated such an agreement can be finalised by the end of 2017.
Following the breakdown around the TPP, the significance of negotiations for a separate regional agreement - the Regional Comprehensive Economic Partnership (RCEP) - has increased. Because China is involved - and not the US - these negotiations have also taken on a political significance.
From a trade perspective, Mr Drysdale said the negotiation of the RCEP is "critical pathway to a strategy towards free trade in Asia and the Pacific”.
Talks will also continue around a potential agreement with Britain following its decision to leave the European Union, as well as a separate agreement with the European bloc.
There has been optimism from Mr Ciobo towards a UK deal, and he has even established a new Australia-UK Trade Working Group.
Mr Oxley is also optimistic, and he believes any agreement with the EU will be difficult given the volatile political climate and growing protectionist sentiment in the wake of the refugee crisis and unresolved economic tensions dating back to the Global Financial Crisis.
"It will be easier to negotiate (a deal with Britain) than to negotiate an agreement with the EU," he said.
However, Gary Sampson from Melbourne Business School said in a piece for an agreement with Britain might take a decade.
Is RCEP the new TPP?
China was not invited to join the TPP, and President Xi used a meeting of Asia-Pacific leaders in November 2016 .
RCEP negotiations were launched by leaders of Southeast Asian nations in 2012. An agreement would initially include the 10 member states of the Association of Southeast Asian Nations (ASEAN) and those countries which have existing agreements with ASEAN: Australia, China, India, Japan, Republic of Korea and New Zealand. The 16 participating countries account for almost half of the world’s population, almost a third of global GDP and over one quarter of world exports.
Mr Oxley said RCEP is likely to be a less ambitious agreement than the TPP without the involvement of the US.
"The drivers in the RCEP are the ASEAN economies, who have been reluctant in the past to go too far down the path of opening up services and investment," he said.
"They will have something (on services and investment), but it won’t be as deep as a commitment as what had been done in the TPP."
Mr Drysdale said negotiations with RCEP nations will be important in "shaping an active response to the negative spillover of a Trump presidency on our international economic interests".
