Trump wants to abandon TPP
US president-elect Donald Trump has announced that on his first day in office he will sign a note of intent for the US to leave the TPP. The Trans-Pacific Partnership was one of Barack Obama's key initiatives, aimed at strengthening ties between the US and Asia. Is this bad news for global trade or a major opportunity for China and Europe?
Attack on the cornerstones of global trade
Trump's attack on the TPP is just the start, Il Sole 24 Ore fears:
“A Trump who strikes down the TPP with a flash of lightning from the White House Olympia may be good for America, but for international trade this is very painful. … Because Trump has vowed not just to dump the TPP, the Trans-Pacific Partnership, he also doesn't like the TTIP - the idea of a transatlantic free trade zone. And he's even less fond of Nafta, the North American free trade agreement between the United States, Canada and Mexico which came in to force on 1 January 1994. Trump is obsessed with the Mexico issue; the building of a wall is just a minor detail. The reason for his obsession is the relocation of a substantial portion of US industry to the neighbouring country, with its cheap labour. But breaking off the Nafta agreement could torpedo one of the world's most well integrated and internationalised trade and production networks.”
Trump strengthening China's position
Donald Trump will pave the way for the economic giant China, De Volkskrant warns:
“Trump's decision creates a power vacuum that China was quick to exploit last weekend. President Xi announced that unlike the US he wants to 'open the door', and praised the advantages of two other trade deals. ... This allows China to cast itself as a world leader. And the same holds for climate protection. Sceptic Trump wants to abandon the Paris climate deal. That gives Beijing an opportunity to pile the pressure on the US as the international community looks on. ... Hopefully Trump won't further increase China's momentum. Whatever else you may say about it, a Pax Americana is better than a Pax Sinica. Trump will play right into the hands of the latter option if he starts to withdraw on security issues as well. With any luck he'll pursue the same line as his predecessors. If he doesn't, global instability will rise to dangerous levels.”
A chance for Europe
If Trump abandons the TPP this could work to Europe's advantage, Kurier argues:
“The Americans have been negotiating with eleven Pacific states for seven years - from Japan to Australia, from Vietnam to New Zealand. The key factor is that China is not among them. The TPP was close to President Barack Obama's heart. He wanted to give the Chinese - who are swinging their military and economic weight in the Pacific Region - a shot across the bow. So Trump can do the Chinese no bigger favour than abandoning the TPP. This will be a grave geopolitical mistake, the 'US version of a Brexit from the Pacific Region', commented James Stavridis, a former four-star admiral with close ties to the Democrats. The US would be giving up their claim to political and economic leadership, he said. And in a high-growth region. Until now the EU has lagged a step behind in international trade. Now it could overtake the US. If it seizes the opportunity.”
Just empty words for now
We need to listen carefully to Donald Trump's statements and not automatically fear the worst, Lidové noviny recommends:
“Trump described his decision to back out of the TPP as what could be called a legally non-binding proposal. … Obama moved into the White House in 2009 with the project of closing Guantánamo, which not just he saw as a stain on the US's reputation. And what happened? Guantánamo is a little emptier but it's still there. Trump, unlike Obama, is not a legal expert. But with him too we are starting to see a difference between what he wants and what can be done. … TPP hasn't even been ratified by Congress yet, so the president can't just terminate it anyway. But even if he does, it doesn't mean he'll automatically start tearing more bricks out of the world order as we know it.”
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