It should have come as no surprise that U.S. President Donald J. Trump would officially withdraw from the Trans-Pacific Partnership (TPP) earlier this week.
In my column that ran in this space on Jan. 18, I said that the treaty was “dead in the water” (see: “Seven Years down the Drain,”).
And while there is no denying the 12-member economic bloc, which would have united Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam into the world’s largest commercial pact (accounting for about 40 percent of global trade, with a combined GDP of $28 trillion), had its flaws, like the new administrations’ biting-at-the-bits obsession to eliminate the Affordable Care Act without first having in place a viable substitute that would protect the millions of U.S. citizens who desperately depend on Obamacare for their most fundamental health needs, Trump and his fellow Republicans might have jumped the gun in deciding to off TPP without first coming up with a better plan.
The whole objective of TPP — which would have included a full third of all the world’s trade — was to put economic reins on China, which has been bullying its way in the global commercial marketplace while brazenly ignoring its commitments to the World Trade Organization (WTO).
Trump has been pushing for a reexamination of the United States’ antiquated and irrational One-China policy and Beijing’s lopsided trade dogma, and TPP was one of the Barack Obama administration’s most indirect but also most effective strategies for creating a counterbalance against China’s ever-expanding dominance over global trade as supplier of manufactured goods to the world.
It would have also reaffirmed the United States’ role as a major commercial force to be dealt with.
But now it is a no-go, not only for the United States, but essentially for the rest of the would-be partners.
Trump viewed TPP as a potential syphon for U.S. jobs, but in fact, it was just the opposite.
In fact, although the premature demise of TPP will help save some high-paying jobs in the United States, the majority of U.S. workers (as well as consumers and businesses) will suffer as a direct result of the Trump administration’s neo-protectionist policies.
And as a silent wake is being observed for the now-lifeless TPP, an alternative trade agreement between 16 Asia-Pacific Rim countries (including China) is gaining new momentum with the United States looking on as a distant observer.
That accord, known as the Regional Comprehensive Economic Partnership (RCEP), has been in the planning stage since 2012 and will fill the void left by the never-realized TPP.
If Trump wanted to halt the economic global assault of China, he made a major blunder by dissolving TPP.
Quite simply, he just handed off the ball to the opposition team and benched his own best players.
In a global economic world, which is constantly in flux, there is always going to be a certain amount of give and take, winning and losing.
But with his deathblow to TPP, the new U.S. president has seriously handicapped his own country’s economy.
Nothing like throwing the baby out with the bathwater.
Thérèse Margolis can be reached at [email protected].
