Trump Withdraws from TPP, Bilateralism Back with a Vengeance

Donald Trump signed a presidential memorandum confirming the U.S. withdrawal from the Trans-Pacific Partnership (TPP). Among his targets of criticism were the North American Free Trade Agreement (NAFTA) of 1994 and the United States accepting China into the World Trade Organisation in 2001. TPP was successfully agreed only last February and was awaiting ratification from Congress.

TPP is a weighty and complex agreement negotiated painstakingly by 12 countries: the United States, Canada, Mexico, Peru, and Chile in the Americas, and Japan, Australia, Vietnam, Malaysia, Singapore, Brunei, and New Zealand in the Asia-Pacific. Together, they comprise almost 40 percent of the world’s gross domestic product. A TPP minus America is impossible. A TPP would have balanced China, now the members are on their own.

There are several common misconceptions about TPP. One is that it is simply a trade agreement, when it is actually much more than that. TPP measures on anti-corruption measures, intellectual property obligations, human rights and child labour conditions, and environmental commitments would have isolated China. India with the proposed Regional Comprehensive Economic Partnership (RCEP) - which includes China and India, but excludes the United States - are not entirely apt. Countries that are party to both negotiations - Japan, Australia, Malaysia, Singapore, Brunei, Vietnam, and New Zealand – may better off now with no competing TPP.

Trump said that Trump exploited, is that TPP would lead to a loss of U.S. jobs. The rationale Trump has given for withdrawing from TPP is that it disadvantaged American industry, workers, and wages, and that he believes in dealing “directly with individual countries on a one-on-one (bilateral) basis in negotiating future trade deals.”

U.S. industry and other TPP members will be disappointed. Indeed, this could be seen as a massive self-goal for the United States. Trump’s decision has already been criticized by some American political leaders, including fellow members of the Republican Party.

TPP Nations Cuts Losses – China may Replace US

President Donald Trump signed an executive order Monday pulling the United States out of the TPP. Leaders from some TPP nations pledged Tuesday to make attempts to continue the agreement even without the U.S.

Australian Prime Minister Malcolm Turnbull said he had discussed the TPP’s future with the leaders of Japan, Singapore and New Zealand.

Turnbull added that with America now out of the agreement, “Certainly there is potential for China to join the TPP.”

In Beijing, a foreign ministry spokeswoman would not say whether China would now attempt to join the TPP. She said China believes that all nations “should keep going down the path of open, inclusive, continuous” economic development.

In the past, China has proposed an alternative to the TPP, a trade group called the Free Trade Area of the Asia Pacific (FTAAP).

There are 11 remaining TPP members, including Japan, Australia, New Zealand, Singapore, Malaysia and Vietnam. The others are Canada, Mexico, Chile, Peru and Brunei.

Last week, Japan’s parliament approved the TPP. But Japanese Prime Minister Shinzo Abe has said that without the U.S., it would become “meaningless.”