Bid to salvage Asian trade pact
AUSTRALIA and New Zealand said yesterday they hoped to salvage the Trans-Pacific Partnership (TPP) by encouraging China and other Asian nations to join the trade pact after US President Donald Trump kept his promise to pull out of the accord.
The TPP, which the United States had signed but not ratified, was a pillar of former president Barack Obama’s pivot to Asia.
Japanese Prime Minister Shinzo Abe has touted it as an engine of economic reform, as well as a counterweight to a rising China, which is not a TPP member.
Fulfilling a campaign pledge, Trump signed an executive order in the Oval Office on Monday pulling the United States out of the 2015 TPP agreement and distancing the US from its Asian allies.
Australian Prime Minister Malcolm Turnbull said he had held discussions with Abe, New Zealand Prime Minister Bill English and Singaporean Prime Minister Lee Hsien Loong overnight about the possibility of proceeding with the TPP without the United States.
“Losing the United States from the TPP is a big loss, there is no question about that,” Turnbull said in Canberra yesterday.
“But we are not about to walk away . . . certainly there is potential for China to join the TPP.”
Obama framed TPP without China in an effort to write Asia’s trade rules before Beijing could, establishing US economic leadership in the region as part of his pivot to Asia.
China has proposed a counter-pact, the Free Trade Area of the Asia-Pacific (FTAAP) and has championed the Southeast Asian-backed Regional Comprehensive Economic Partnership (RCEP). New Zealand’s English said the US was ceding influence to China and the region’s focus could switch to alternative trade deals.
“We’ve got this RCEP agreement with Southeast Asia, which up until now has been on a bit of a slow burn, but we might find the political will for that to pick up if TPP isn’t going to proceed,” he said.
Malaysia’s trade minister said negotiators from the remaining TPP countries would be in constant communication to decide the best way forward. “Notwithstanding the position of the new US administration on [TPP], we will continue to engage with our American colleagues to strengthen our bilateral trade and economic relations, given the US’s importance as our third-largest trading partner and a major source of investment,” Mustapa Mohamed said.