The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is finally springing to life at the end of the month.  Despite doubts from many quarters, companies and consumers will start receiving benefits within days. In their rush to become one of the first signatories, in fact, CPTPP members have actually delivered an unexpected, early New Year’s gift.  Not only does the entire agreement begin on the first day, but most firms will get double tariff cuts by January 1, 2019. What does this mean? Start with the basics: on December 30, 2018, the full legal text of the CPTPP will come into force for Australia, Canada, Japan, Mexico, New Zealand, and Singapore.  Vietnam joins on January 14, 2019. Every single provision in the 583 pages will become active on the very first day.

The much anticipated G20 meeting between US President Trump and Chinese President Xi finished without a total disaster.  Both sides finished dinner, in fact, with a rudimentary agreement in place and managed to emerge with smiles all around. But does the “deal” signify anything of substance?  In short, the signs are not great.  Bets could easily be taken now on whether or not we will return to the exact same spot at the end of February.   The early signs are not good.  While people leaving the table in Argentina managed to argue that they achieved win-win outcomes, immediately afterwards both sides seem to have different interpretations of what, exactly, was agreed. The Americans have stressed a 90-day timeline for resolution of significant issues in the relationship.  In that timeframe, the US will refrain from increasing tariffs on $200 billion in goods from 10% to 25% on January 1 as promised earlier.  In exchange, the Chinese will make substantial purchases of agriculture, energy and other industrial goods. The Chinese, by contrast, have made no mention at all of the timelines for discussion.  The tariff discussion inside China suggests that all tariffs will be eliminated during dialogue.  And no commitments have been made for what, exactly, is to be bought or in what quantities or how quickly.