Business

Trump backs out from TPP

Syndicated News
Written by Syndicated News

WASHINGTON, Jan 22 2017 : Keeping his election campaign pledge, the new U.S. President Donald Trump announced, on his first day in office, that the U.S. would withdraw from the Trans-Pacific Partnership (TPP) agreement which Trump’s predecessor Obama administration, along with eleven Asia-Pacific potential member countries, had signed in Auckland, New Zealand.

Malaysia was one of the signatory states to the TPP agreement.

An announcement on the U.S. withdrawal from the TPP, issued soon after Trump’s presidential swearing-in ceremony on Friday, was posted on the new President’s website.

The move came with Trump’s emphasis on protecting jobs of American workers amid widespread fears of trade unions that the TPP, like the North American Free Trade Agreement (NAFTA), which comprised the U.S., Canada and Mexico, will wipe out American jobs as, increasingly, dependence on foreign suppliers for goods and services would grow.

“For too long, Americans have been forced to accept trade deals that put the interests of insiders and the Washington elite over the hard-working men and women of this country,” it said. The statement said “tough and fair agreements”
on trade could be used to bolster U.S. economic growth and thus bring back millions of jobs to America.

“This strategy starts by withdrawing from the Trans-Pacific Partnership and making certain that any new trade deals are in the interests of American workers.”

The TPP, which remained unratified by the U.S. Congress, was conceived as the economic fulcrum of the Obama administration’s much-publicized “pivot” to the Asia-Pacific region and as a response to China’s growing assertiveness in the huge Asia-Pacific geographic expanse.

The TPP’s demise has fuelled fears among its supporters that U.S. withdrawal from the agreement, which was finalized after painstaking negotiations that lasted several years, was now going to give added leverage to China which could use its economic strength to eventually bring the other countries in the region under its political dominance.

China is also aggressively pushing its own trade partnership deal called Regional Comprehensive Economic Partnership (RCEP) with the ASEAN member states and some other countries.

Trump has been critical of China’s manipulative trade practices – Beijing has been vocally criticized by a number of industries in the U.S., including the steel sector which accuses it of giving subsidies to its suppliers and also
manipulates its currency by keeping its value much lower in relation to the U.S. dollar – and threatened to impose punitive tariffs on Chinese exports to the U.S.

At a discussion on Thursday night at the Asia Society in New York on “APEC and Free Trade in Asia Pacific”, Wendy Cutler, a former deputy U.S. Trade Representative who is currently the vice president of the Asia Society’s Policy Institute, told Bernama that one could not be sure about the TPP’s revival in the future, given Trump’s intention to withdraw from the pact.

She was responding to a question whether the TPP could be revived later  after Trump had settled down in office.

The panel discussion featured Wendy Cutler, Vu Tien Loc, Chairman and President, Vietnam Chamber of Commerce and Industry, Monica Hardy Whaley, President, National Center for APEC and Farisa Zarin, Managing Director and
Global Head of and Public Affairs, Moody’s Corporation.

Meanwhile, it was revealed that six U.S. ambassadors in the Asia-Pacific countries – the six ambassadors, all political appointees whose terms ended with the replacement of the Obama administration – had written what is described as an “open letter” to the U.S. Congress calling on its members to endorse the TPP agreement to ensure that the U.S. leadership position was not eroded in the region, and not to simply give away that role to China which was not a
prospective TPP member.

The six envoys’ “parting shot”, as some are calling the diplomatic representation, has so far not produced any positive reaction from Congress, and it remains to be seen whether the Trump administration will, at some point in the future, review the letter of the six diplomats who point out the benefits the TPP would have for the U.S. economy.

The “open letter”, which retraces American presence in the region since 75 years, warns that “walking away from TPP may be seen by future generations as the moment America chose to cede leadership to others in this part of the world
and accept a diminished role”. Chinese President Xi Jinping’s remarks that Asia should be left to Asians, are also seen as a clear warning about China’s ambitions in the region.

The six U.S. envoys are Max Baucus (ambassador to China), Nina Hachigian (ASEAN), Caroline Kennedy (Japan), Mark Lippert (South Korea), Mark Gilbert (New Zealand and Samoa) and Kirk Wagar (Singapore).

The letter points out that the alternative to a TPP is not the status quo.

Others were actively engaged in setting the rules of commerce in the Asia-Pacific region without the United States.

Describing the RCEP as a much lower-standard agreement, the six say that, in TPP’s absence, it would serve as the template for economic integration in Asia and shift trade away from America, which would face higher tariffs, resulting in less U.S. exports and migration of more jobs overseas.

Unlike the RCEP, the TPP would compel stronger intellectual property rights, limits on subsidies to state-owned enterprises, and protection of worker rights, the environment, and a free and open internet.

These enforceable commitments would place U.S. companies at an advantage because they already adhere to high standards and provide a powerful lever for change that we are unlikely to replicate in any other form in the near future. – Bernama

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Syndicated News

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