Stories of the Trans-Pacific Partnership’s demise have been floating since the campaign and more firm since the election results considering Trump’s stance on existing trade deals and plans, but now the President-elect has made it very clear that TPP is out.
In a video address posted online, Trump outlined plans for his first day in office, saying all of his efforts would be about restoring U.S. laws and bring back jobs because, “It’s about time.”
On trade, Trump said: “I’m going to issue a notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country. Instead, we will negotiate fair, bilateral trade deals that bring jobs back onto American shores.”
The TPP was designed as an attempt to curb China’s power in Asia trade by partnering with smaller nations in the region, but with America out of it, China will be able to push its own rival TPP deal, the Free Trade Area of the Asia-Pacific (FTAAP) agreement.
“You could call this Trump’s inauguration gift to China at the expense of rapidly developing countries like Vietnam,” said Dr. Zvi Schreiber, CEO and founder of logistics technology firm Freightos. “Instead of improving global trade, cancelling TPP will hinder shifting manufacturing patterns, bolster China’s export industry, and hinder the continuation of the rapid growth of Vietnam’s economy with GDP multiplying 5x since 2000.”
Some leaders of Pacific Rim nations, like Peru and New Zealand, said at an Asia-Pacific Economic Cooperation (APEC) summit this weekend, that they’d push forward with trade with our without the U.S., and even consider implementing the TPP if the U.S. bows out.
Japan’s Prime Minister Shinzo Abe said, however, that TPP would be meaningless without the U.S.
What happens now will be the next major question, but many signs point more dominance from China and strained relations with the U.S.
“Even within the U.S., not implementing the TPP will do more harm than good. U.S. manufacturers may find it easier to compete domestically, but they will find it harder to export,” Schreiber said. “The one definite benefactor of canceling the potential free trade agreement? The People’s Republic of China.”
In an opinion piece for CNN, Mathew Davies, head of the international relations department at The Australian National University, who specializes in Southeast Asian politics said, “The TPP, despite being criticized widely within and beyond the U.S., was a traditional product of U.S. diplomacy with traditional aims. The decision to leave the TPP is a sign that Trump places little value in the U.S. keeping its promises when he sees no value in doing so—and that uncertainty now colors dealings with the U.S.”