With the TPP in Limbo, Australia and Peru Cement Their Own Free Trade Deal

With the TPP in Limbo, Australia and Peru Cement Their Own Free Trade Deal
Peruvian President Pedro Kuczynski welcomes Australian Prime Minister Malcolm Turnbull to the opening session of the 2016 APEC summit, Lima, Peru, Nov. 20, 2016 (AP photo by Martin Mejia).

On Nov. 10, Australia and Peru concluded a free trade agreement while leaders of both countries were attending the Asia-Pacific Economic Cooperation summit in Vietnam. Free trade negotiations between the two countries began in May following the U.S. decision to abandon the Trans-Pacific Partnership, the major multilateral free trade deal that involved 11 other Pacific Rim countries, including Australia and Peru. In an email interview, John Edwards, a nonresident fellow at the Lowy Institute and adjunct professor with the John Curtin Institute of Public Policy at Curtin University, explains why Australia and Peru moved forward with their own free trade agreement, how its terms differ from those of the TPP, and which industries stand to gain and lose from the deal.

WPR: Australia does not count any Latin American countries among its top 10 trading partners. Why did it decide to sign a free trade agreement with Peru, and what does this move signal about Australia’s trade outlook?

John Edwards: Though useful in its own right, Australia’s new free trade agreement with Peru, known as PAFTA, was sought as a convenient, achievable and exemplary piece of salvage from the wreck of the Trans-Pacific Partnership, which was sunk in early 2017 by the incoming Trump administration. Both Peru and Australia saw considerable value in the TPP, and both wished to put on record the kind of quality provisions it contained by way of an example of what might have been achieved—and may one day still be achieved if the U.S. returns to the negotiating table on multilateral agreements. Canada’s reluctance to sign on to a “TPP minus the U.S.” at the APEC leaders’ summit in Vietnam earlier this month was another reason for Australia and Peru to promptly conclude the PAFTA.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review