Donald Trump just announced news that President Obama is not going to like. According to Trump, on his first day in office, he is going to eliminate the Trans-Pacific Partnership.
Obama’s “signature” trade deal, the Trans-Pacific Partnership links countries around the Pacific Rim, with countries like Japan, and Australia participating. If the United States exits the partnership, it is pretty much over. But it’s not the end of international trade by any means. United States trade partners are looking forward to negotiating agreements with countries like China and Russia. China was excluded from the Trans-Pacific Partnership.
At the APEC Economic Leaders’ Meeting in Peru this past weekend, other world leaders looked to make trade agreements with China. China has been negotiating the Regional Comprehensive Economic Partnership, a deal that would link 16 Asian countries and that is almost completed, as well as the Free Trade Area of the Asia-Pacific (FTAAP), which includes 21 countries along the Pacific Rim, such as the United States, Russia, Canada, Mexico, and Peru.
The United States has been persuading trade partners to embrace the Trans-Pacific Partnership instead of the FTAAP. But now that Trump has promised to pull out, the FTAAP appears to be on track, with China pushing forward.
Australian Trade Minister Steve Ciobo announced that his country is already looking to the next agreement. “With the future of the TPP looking grim, my ministerial counterparts and I will work to conclude a study on the Free Trade Area of the Asia-Pacific, which sets out agreed actions toward a future free trade zone,” Ciobo said. China has also announced, through their Foreign Ministry, that they will be working with Russia to promote free trade. Singapore, Vietnam, and Malaysia have also confirmed that they will be following China, while only Japan is clinging to the Trans-Pacific Partnership.
Trump and his allies point to manufacturing industry losses, along with losses in other sectors, as proof that the Trans-Pacific Partnership was a failure.