The EU's Strategy for Trans-Pacific Partnership

This paper attempts to assess the discriminatory impact that the Trans-Pacific Partnership (TPP) agreement could have on the EU economy. It gives robust evidence that the discriminatory impact will be dramatic if the TPP is successful in reducing or abolishing "behind the border" barriers among member countries. This situation leaves the EU with only two options. First option consists in doing nothing. It is costly from the beginning, as East Asian economies are already quite large. More importantly, the cost of this option will keep rising because EU's weight will decline whereas the East Asian weight will keep rising. In such a context, threatening to close the EU markets as a leverage to open non-EU markets damages credibility. The second option consists in insuring the EU against a successful TPP by reaching a preferential trade agreement (PTA) with Japan, and then with Taiwan. Concluding PTAs with Japan and Taiwan is not only an insurance policy against the TPP, but it also allows the EU to boost the development of Europe, East Asia, and global trade.