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The chapter assesses the evolution of spillover effects of unconventional monetary policies (UMPs) and their macroeconomic impact on Asia and the Pacific region. It develops a Panel Vector Auto Regression model for a period covering data from first quarter 2000 until first quarter 2015. It finds that Asia and the Pacific region has responded to the advanced economies’ actions with accommodative monetary policy. Such lower interest rates were coupled with currency appreciation, asset price inflation, and strong movements in capital flows. If prior to the Global Financial Crisis (GFC), the ‘global saving glut’ hypothesis (i.e. Asian savings flight to the US) was one of the major effects resulting in booming US house prices, it is clear that a reversal effect has dominated the economy after the GFC: funds flight to Asia and the Pacific region putting pressure on asset prices, leading to financial vulnerability.

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The original Trans-Pacific Partnership (TPP) agreement was the first regional trade deal explicitly to address the issue of exchange rate misalignment by attaching a “Joint Declaration of the Macroeconomic Policy Authorities” (Joint Declaration) to the main text. The declared objective was to avoid the use of currency devaluations as a means to alter market access commitments agreed to under TPP. A similar agreement is absent in the CPTPP. This chapter analyzes the Joint Declaration by studying the main elements and comparing them with existing reporting provisions of the International Monetary Fund and the World Trade Organization. We find that the Joint Declaration provisions would have increased the transparency of the central banks’ actions only marginally, as the transparency requirements were not different from the existing practices of most TPP members. Most importantly, the Joint Declaration failed in providing a definition of the concept of exchange rate manipulation and linking it to any dispute settlement procedure.