In a video outlining his policy plans for his first 100 days in office, U.S. President-elect Donald Trump revealed he will issue a note of intent to withdraw from the Trans-Pacific Partnership (TPP) trade deal, calling it “a potential disaster for our country” and instead would “negotiate fair bilateral trade deals that bring jobs and industry back.”
Trump threatened during his campaign that he would cancel the pending TPP deal if he wins. The deal was signed by 12 countries which together cover 40% of the world's economy, but has not yet been ratified.
The TPP deal has been the goal of President Barack Obama but despite its potential benefits, including the generation of new jobs and a competitive advantage for U.S. firms in international markets, it has been opposed by Trump.
Trump has dubbed the TPP as a “terrible deal” and was firm about his protectionist stance throughout his campaign. Trump – who also campaigned against immigration and globalization – has accused a handful of Asian countries for taking away jobs from the US.
Trump’s protectionist trade policy will certainly affect Asia, particularly China and other Asian countries, such as the Philippines, that have benefited from the outsourcing and offshoring activities of U.S. businesses.
Asian economy stands to lose
George Magnus, senior independent economic adviser at UBS Group AG, says the $11 trillion Asian economy stands to lose from a more protectionist America.
“This is very depressing news,” says Deborah Elms, executive director at the Asian Trade Center, in an article published by the BBC. “It means the end of US leadership on trade and the passing of the baton to Asia. At a time of slowing economic growth, the world can ill-afford watching the largest economies turn inward.”
Japan’s prime minister, Shinzo Abe, has warned that the Trans-Pacific Partnership (TPP) would be “meaningless” without US participation.
Abe conceded that other TPP countries had not discussed how to rescue the agreement if Trump carried out his promise to withdraw, reports the The Guardian.
Malaysian prime minister, Najib Razak, has a more subdued reaction, pointing out that it is Trump's right as the democratically-elected President to make the policy decisions he thinks right.
“I am a strong supporter of developing trade and open regionalism in Asia Pacific. It is key to benefiting our peoples. I look forward to working with President-elect Trump on our shared goals of strengthening security and ensuring growth that is inclusive, sustainable and fair to all,” he told the BBC.
Da Wei, an expert on the US at the China Institute of Contemporary International Relations says that the US leaving TPP is a problem of America rejecting globalization. “China is a beneficiary of globalisation and China is not willing to see the tide of globalization ebb.”