What's Next on CPTPP from Taro Kono and More from Horasis

Mr. Taro Kono (河野 太郎) is the Director of the Liberal Democratic Party Public Affairs Department in Japan since October 2021. He served as Minister for Administrative Reform and Regulatory Reform from 2020 to 2021 under Prime Minister Yoshihide Suga and was the Minister for Foreign Affairs and Minister of Defense under Prime Minister Shinzo Abe. He is a member of the House of Representatives representing Kanagawa's 15th district since 1996. At Horasis on Friday he made some noteworthy remarks.

Those remarks were on CPTPP, and they're summarized below along with additional observations. I was a speaker earlier in the day on the topic of nurturing foreign direct investment.

CPTPP had been the Trans-Pacific Partnership (TPP), a centerpiece of U.S. President Barack Obama’s strategic pivot to Asia. The agreement was a product of the hard work by Secretary of State Hillary Clinton in collaboration with key trade leaders. But alas, the subsequent inhabitant of the White House withdrew the U.S. on the first day in office just as the TPP was set to become the world’s largest free trade deal, with 40 percent of the global economy. Yesterday Mr. Kono joked that he offered to rename the deal 'Trump-Pence Partnership', but that wasn't enough.

Free trade agreements break down barriers and open markets to trade. Mr. Kono remarked that Japan was initially opposed to TPP because it required removing import restrictions, and so it was politically challenging to allow imported agricultural goods such as beef, rice and soybeans, and other products. The Japanese government eventually decided to move ahead and withstand the pressure, and in fact became a leader both in TPP and now in CPTPP.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was signed in January, 2018 by the original 11 countries, and thanks again to Japan for the leadership including Prime Minister Shinzo Abe. Thank you, too Mr. Kono for your transparency and leadership.

Here are some of the comments regarding CPTPP by Mr. Kono on Friday.

• The countries in CPTPP will welcome the U.S.A. when it's ready.
• The US under President Joe Biden is seeking additional labor and environmental provisions.
• China has applied to be let in, but Mr. Kono doesn't expect they can meet the requirements.
• South Korea is also interested, and they will need to make some changes to be allowed in.
• The group is welcoming to Indonesia and Taiwan, and they both have expressed an interest.
• The United Kingdom's interest is welcomed by the existing members of CPTPP.
• Other countries are also welcomed including Ecuador.

A summary of CPTPP, RCEP and applicants was done in January by Jeffrey Schott of Peterson Institute for International Economics HERE and summarized in the graphic below.

The rest of Horasis was filled with leaders from around the world, in business, non-profits, government... and opened with an updated from Ukraine. Watch that special message HERE. And watch any of the videos HERE. Join the next sessions live and in-person, throughout the year.

Earlier in the day I spoke in the session on Nurturing Foreign Direct Investment, moderated by Courtney Fingar of Investment Monitor, member of Global Chamber® based in London. The panel included Andreas Schweitzer, MD of Arjan Capital and Dinesh Joshi, Chairman of SatyaGiri Group, while a technical glitch excluded Robert Herrmann, CEO of Germany Trade & Investment from joining.

Investment Monitor has previously written on main 2022 issues with FDI.

• Chinese investment in the world, both positive and negative impacts.
• Attempts to debase democracy, not going well in Ukraine.
• Inequality between rich and poor is increasing, creating problems and opportunities.

Some of my notes on global FDI are shown below. The video is available HERE.

• It is too early to tell about the impact of Russia's invasion of Ukraine. It's important in trade that international laws are observed, and we wrote about it HERE on Linkedin.
• The U.S. is headed back in the right direction with immigration, but progress continues to be slowed by the minority party.
• Infrastructure is a key area for growth worldwide, including the U.S. where President Biden has announced the 'Infrastructure Decade'.
• The megaregion idea has bipartisan support in the U.S, plus Mexico and Canada, and remains a strong driver of jobs and growth through USMCA.
• Women in trade and leadership is a growing trend and driver for growth around the world, including the U.S.
• Young global leaders (YGL) are playing a more significant role as technology drives change, and YGLs look to have more global impact.
• Electric vehicle adoption is growing rapidly - expected to be 100% in Sweden in the coming months, and transforming the auto industry.
• Semiconductor industry has evolved and the supply chain has both expanded and been bottlenecked, more HERE on our recent event.
• Ecommerce and digital transformation are opening up new opportunities in Japan, South Korea, Latin America and worldwide.
• Opportunities are growing in agriculture, farming, antech and overall in food and beverage security - including water.
• The market for cannabis is growing - with legalizations coming up in Mexico, Costa Rica and Germany, portending a global supply chain.
• Fintech opportunities are growing everywhere - including application of artificial intelligence, machine learning, blockchain, crypto and more.
• Healthcare and life science innovations and applications - including with mental health - are driving growth in every country.
• The shift away from reliance on China for manufacturing is opening opportunities in India, Malaysia, Vietnam and Mexico.
• Trade agreements need to be expanded, and we will always encourage more to lower barriers, tariffs and anything else in the way.
• Shipping lines have caused supply chain disruption and inflation, and actions by governments will seek to reverse their market manipulation.
• Regional markets are HOT - like LATAM is this recent globinar HERE and Africa in this event coming up March 23rd HERE.
• Globalization is continuing - and nothing can stop it. "Arguing against globalization is like arguing against the law of gravity." - Kofi Annan

Some additional insights by the group included Dinesh's comment that in fact India has invested more on manufacturing in Africa than China has, though China's overall investment in infrastructure, supply chain and logistics is far greater.

Thank you to John Cook (Chairman of Rock Lake Advisors, based in Zurich) for introducing me to Horasis. Thank you to Frank-Jürgen Richter for inviting me to speak and participate at the event. I encourage you to learn more about Horasis at the link below.

Doug Bruhnke - Founder/CEO of Global Chamber®

The mission of Horasis is to enact visions for a sustainable future. Horasis' professional guidance to corporate leaders is based on three fundamental values: Sustainability, Principled Leadership and Community Building. More.

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