Trump Blunders by Withdrawing from Trans Pacific Partnership

The new president disheartens America’s allies in the Pacific and cedes the initiative in trade to China.

Businessman Donald Trump gives a speech in front of the United States Capitol in Washington DC, September 9, 2015
Businessman Donald Trump gives a speech in front of the United States Capitol in Washington DC, September 9, 2015 (Joshua M. Hoover)

Donald Trump made good on his campaign promise to withdraw the United States from the Trans Pacific Partnership (TPP) on Monday.

It was one of his first acts as president — and a terrible mistake.

Not only is Trump robbing American companies of business opportunities in the Far East; he disappoints American allies in the region and cedes the initiative to China.

Missed opportunities

Trump’s wild claims about the detrimental effects of trade notwithstanding, experts estimated that TPP could have boosted global economic output by $220 billion over the next ten years.

The treaty, which took almost the entirely of Barack Obama’s presidency to negotiate, proposes to eliminate tariffs, tear down other trade barriers and harmonize product standards across twelve participating countries.

Without being ratified, it has already inspired significant economic reforms, for example in Japan, where powerful agricultural conglomerates long blocked liberalization, and Vietnam, where it compelled the legalization of independent labor unions.

The Philippines and South Korea, key American allies in Asia that weren’t part of the trade negotiations, had expressed an interest in joining TPP as well.

Now that America is pulling out, though, they may stay on the sidelines — if the pact goes forward at all.

Pivot at risk

Worse than the missed economic opportunities is that canceling TPP undermines America’s strategic “pivot” to Asia.

By drawing in almost all the nations around the Pacific Ocean except China, the hope was that the partnership would force the world’s second-largest economy to abide by its liberal trade rules.

Now China has an opportunity to push its alternative to TPP, called the Regional Comprehensive Economic Partnership.

Like TPP, it would lower and in some cases eliminate tariffs and harmonize intellectual property rights.

All the countries in Southeast Asia as well as Australia, India, Japan and South Korea would be involved.

But not America.

Disheartened

Australia, anticipating Trump’s decision, has already thrown its support behind the Chinese initiative.

Just like Trump has alarmed traditional allies in Europe with his loose talk about NATO and nuclear weapons, he disheartened America’s best friends in the Pacific on Monday.

If he keeps this up, “America first” could quickly turn into “America alone”.

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