The Trans-Pacific Partnership (TPP) took five and a half years to negotiate, and was signed in February 2016. However, in January 2017, U.S. President Donald Trump signed an executive order to withdraw from the agreement, rendering it ineffective. With the United States' return to the TPP unrealistic while under the Trump administration, Japan and Australia have taken leading roles in discussions on creating a TPP11 without the United States which began in May 2017. In the November issue of the RIETI Report, we present the column "Outcome of TPP11: Persuading the United States of the disadvantages of withdrawal" by Faculty Fellow Shujiro Urata and Peter A. Petri of Brandeis University.
Urata and Petri conducted simulation analysis to examine FTA policies which the United States and other TPP nations should adopt in the Asia Pacific region, finding that the United States would suffer losses from withdrawing from the TPP. They then present their four reasons on why the TPP11 should take effect early from Japan's perspective. Finally, they discuss the effects of the TPP11 on other mega FTA negotiations, and emphasize that the Japanese government must transition to a policy of pursuing trade liberalization while simultaneously conducting structural reform to regenerate the Japanese economy.