Nobody is yet sure what the direction of US economic policy will be under President Trump. During the campaign, he made strident “America first” protectionist noises and has been notably belligerent towards China, but getting elected and running the country are two different matters.
One of Trump’s first actions upon taking office has been to issue an executive order to withdraw the US from the Trans Pacific Partnership (TPP) which sought to boost trade and growth between the 12 nations participating in the accord. The act is more symbolic than revolutionary since ratification of the deal had already been blocked by the US Congress and the deal could not advance, as originally slated until six signatories representing at least 85% of the new bloc’s GDP had ratified it. The failure of the US to endorse the accord meant that it could not go into force as written.
However, the Australians still believe in the merits of TPP. They are leading a movement to sign up to a TPP minus one deal which would move the deal forward in the absence of the USA (Brexiteers take note!). TPP would encompass more than 40% of global trade with American participation, but even without the US, it still represents a very significant proportion of global trade. The remaining TPP nations are: Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.
America’s withdrawal from the accord may please China since TPP was regarded as a mechanism to contain the rise of the Dragon economy and its burgeoning regional influence. China has noted that it is in favour of “open and transparent regional economic arrangements”.
A spokesman for the Chinese government noted that: “We believe in regional economic integration. We are for open and transparent regional economic arrangements. The economies of the Asia Pacific region are diverse. It’s important to behave in a open way. We’re ready to work with all sides to provide impetus for the Asia Pacific and the global economy.”
