News Analysis |
While talking to the lawmakers from agriculture dominated states, President Donald Trump expressed his desire to get the United States of America back into Trans-pacific partnership trade agreement. It came as a surprise not only for rest of the world but to his closest aides as well. Throwing off Trans-pacific partnership of TPP was one of the few fundamental constituents of Donald Trump’s entire pre-election campaign narrative.
He firmly believed that TPP and North American Free Trade Agreement or NAFTA were crumbling the US manufacturing industry and the workforce. Trump believed it should be uprooted. As he is known for his witty name-calling, “rape to the country” and “horrible for US economy” were the phrases he used to demonstrate his despise for TPP in the past. In a matter of just four days after taking oath as 45th president of USA, on January 4th 2017 Donald Trump pulled out of TPP; a feat Obama administration worked hard to achieve.
US manufacturing industry and exports have already been reduced to weapons and tech products, courtesy of cheap labor and manufacturing abilities of China, a blow to farming sectors would be nasty for the unemployment rate and US economy.
Growing pressure from Republican lawmakers and farmers after Trump started a quid pro quo with China regarding tariffs might have forced him to reconsider his stance over TPP. On principle,the reason why the USA joined other Pacific countries was to curb the growing Chinese influence in the Pacific region.
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Trans-Pacific Agreement and its Significance
It was initially called the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP or P4) between four countries Brunei, Chile, Singapore and New Zealand. The provisions of the P4 agreement allowed almost tariff-free trade of goods and services, along with corresponding incentives, between signatories. Gradually more countries bordering the Pacific Ocean joined in to discuss the prospects, increasing the no. of participants to 12, including the USA.
As Obama administration took charge of public affairs during the end of 2008 economic recession, creating jobs and reviving the economy remained its goal till the end. Not only the trade between these 12 countries would have been beneficial for US workforce, as TPP countries represent roughly 40% of the total economic output of the world, it would have helped the United States to counter the growing economic influence of China in the Pacific region.
While talking to the lawmakers from agriculture dominated states, President Donald Trump expressed his desire to get the United States of America back into Trans-pacific partnership trade agreement.
However, the projections of the said agreement were not welcomed entirely in the United States. Criticism pivoted around the notionthat TPP undulyfavored big corporations whereas the working class in America will have a nominal benefit. The same disapproval led to termination of TPP becomingas the bedrock of Donald Trump’s election campaign and eventually pulling out of United States.
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After the US exist, the remaining 11 countries signed another agreement, Comprehensive and Progressive Agreement for Trans-Pacific Partnership, with almost same provisions as TPP. Resultantly, concerns were raised by US economic brains that country’s exports, especially agriculture and meat products, will face a profound decline due to comparatively high tariffs as being a non-signatory. Since US manufacturing industry and exports have already been reduced to weapons and tech products, courtesy of cheap labor and manufacturing abilities of China, a blow to farming sectors would be nasty for the unemployment rate and US economy.
Joining TPP Again is not Going to be Easy
While Trump may be willing to ride along now, the response from rest of the partnering countries has not been quite welcoming. The reason could be Donald Trump’s tweet later today which read, “Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!”
Firstly, agreements take an ample amount of time, efforts and negotiations before they are ready to be signed. Since 11 cosigners, excluding the United States, have come up with a new agreement of their own, accommodating the USA once again specifically as President Trump desires, seems highly unlikely. As expressed by Australian Trade Minister Steven Ciobo, “We’ve got a deal. I can’t see that all being thrown open to appease the United States.”
Read more: Is America becoming an isolationist?
Secondly, due to instinctive nature and a habit of making decisions without weighing the long-term outcomes on part of Donald Trump, allies might hinder US inclusion in the deal. Even if the United States does manage to make its way back, the potential deal could take years to be penned down.
By far, China is the largest single trading partner of United States, and for latter, the partnership is relatively more crucial. Inclusion in the Trans-pacific partnership might be a way out to United States’ trade over dependency with respect to China, but it is still a long shot.