TRANS-PA­CIFIC PART­NER­SHIP SCRAPPED

TPP loses clout as Don­ald Trump pulls US out of Asian block

The Star Early Edition - - BUSINESS REPORT - Charlotte Greenfield and Stanley White

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.

Big loss

“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

PHOTO: EPA

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.

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