TRANS-PACIFIC PARTNERSHIP SCRAPPED
TPP loses clout as Donald Trump pulls US out of Asian block
AUSTRALIA and New Zealand hoped to salvage the TransPacific 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 two countries said yesterday.
The TPP, which the US had not ratified, was a pillar of former US president Barack Obama’s policy to pivot to Asia.
Japanese Prime Minister Shinzo Abe has touted it as an engine of economic reform, as well as a counter-weight to a rising China, which is not a TPP member.
Fulfilling a campaign pledge, Trump signed an executive order on Monday pulling the US 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 US.
“Losing the US from the TPP is a big loss. There is no question about that,” Turnbull said yesterday. “But we are not about to walk away… certainly there is potential for China to join.”
Obama had framed the TPP without China in an effort to write Asia’s trade rules before Beijing could, establishing US economic leadership there 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 south-east 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 south-east 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,” English 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 current 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,” said Mustapa Mohamed.
Losing the US from the TPP is a big loss, there’s no question… there is potential for China to join.
The TTP, which has been five years in the making, requires ratification by at least six countries accounting for 85 percent of the combined gross domestic product of the member nations.
Australia held open the possibility of China, the world’s top exporter, joining a revised deal.
“The original architecture was to enable other countries to join,” Australian Trade Minister Steven Ciobo said.
“Certainly I know that Indonesia has expressed interest and there would be scope for China if we are able to reformulate it.”
Trump had vowed to bring jobs back by renegotiating what he called bad multilateral trade deals. – Reuters
US President Donald Trump shows the executive order withdrawing the US from the Trans-Pacific Partnership (TPP) after signing it in the White House on Monday. Standing behind Trump, from left to right: US Vice-President Mike Pence; White House chief of staff Reince Preibus; National Trade Council director Peter Navarro; and Jared Kushner, senior adviser to the president.