The economic theme of the year was debate about the future of the Trans-Pacific Partnership after US President Donald Trump made good on his campaign pledge to withdraw the US from the deal.
The Australian government took a dim view of growing protectionist sentiment, but on TPP itself, Stephen Grenville felt the loss was no big deal:
To the extent that there were opportunities for enhanced trade access, the big prize was the American market: with that gone, the deal is finished.
John Edwards agreed.
Its collapse gives Australia an opportunity to switch the focus back to where it ought to be, which is basically China.
But Mike Callaghan believed reports of the death of TPP to be exaggerated.
What kept the TPP alive? Probably Japan. While Australia and New Zealand were always keen to press on with the TPP, the prospect received a major fillip when Japan did a U-turn in April and said it would take a major role in advancing an 11-country TPP without the US.
Vietnam also made a free trade pitch to Trump. Helen Clark:
Vietnam was disappointed, not just because of the loss of new trade avenues promised by the TPP but because it was also banking on the agreement to assist in reforming its problematic and unprofitable state-owned enterprises.
And like the Monty Python skit, the TPP achieved a ‘not-dead-yet’ quality. Greg Earl:
Officials from the remaining TPP11 countries are meeting in Japan [in July] to at least preserve the main principles of the agreement.
Alan Oxley cautioned that free trade was being deferred rather than reversed:
Trump has given grist to the protectionist mill. He wants trade curbed where a US trading partner has a trade surplus … Trump clearly savours this but most trade experts and key members of Congress do not. Trade policy cannot be set by the President alone - it is a shared power with Congress - and the global trading system cannot be turned on its head.
So the TPP struggled on without the US, and just as it looked like a version of the deal would be rescued at the APEC summit in November, Canada almost soured the party. Mike Callaghan again:
Canada’s Justin Trudeau failed to turn up for a meeting with the other 10 leaders who thought they would formally sign off on a deal … Following a good deal of recrimination against Canada, the TPP was salvaged. Trade ministers issued a statement on Saturday to say they had agreed on the ‘core elements’ of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP – the new name for the TPP), identifying areas of progress but not yet consensus.
Still, this was a far cry from the outcome Malcolm Turnbull and other leaders had expected.