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The Trans Pacific Partnership (TPP) was once hailed as a ground breaking trade agreement between 12 nations coming together with a vision of prosperity and a true global market. Sure, it had its faults and wasn’t perfect, but the TPP was the result of years of negotiations and seemed to be heading towards implementation by its various partners. Then came the 2017 Presidential elections and the somewhat surprising victory of a protectionist Republican by the name of Donald J. Trump.
President Trump has never been a fan of free trade agreements – during his campaign and since he’s moved into the White House, he has been very vocal about his feelings towards the North American Free Trade Agreement (NAFTA) and the TPP: he doesn’t like them – recently qualifying the TPP as a “horrible” deal for stealing American jobs to take them abroad.
What’s the world to do now that President Trump has dug his heels into the ground and is asking for a better deal? Countries are moving right along, leaving the once all mighty U.S. by itself.
Just recently more than a dozen Pacific Rim countries got together to hold a post-TPP summit in Chile to see what could be saved from all those years of negotiations and to figure out if they really do need to have the U.S. as a partner. China, who wasn’t an original TPP partner, invited itself to the party and was looking to cut some deals. NAFTA partners Canada and Mexico were also there to chat with TPP orphan countries. The U.S. government sent an envoy from a local embassy to attend meetings. That in itself speaks quite a bit in terms of the importance the Trump administration is willing to give to these trade talks.
The White House also put out a statement about the meeting in Chile saying it was held to “underscore the commitment of the Trump administration to engaging actively with all our Asia-Pacific partners and our intention to remain a key member of the Asia-Pacific community.”
Tim Groser, New Zealand’s ambassador to the U.S. and former trade minister has a pretty good answer to that: “This is a competitive game and of course we aren’t going to sit in a hole and do nothing on these non-TPP fronts because everybody is in this game and if you fall behind you are in a competitive disadvantage.”
The idea behind a possible 11+ nations agreement, where China, South Korea and Colombia would join in, is floating in the air. U.S. businesses interested in taking advantage of such a vast trading bloc might be tempted to move their operations outside the United States to Canada, Mexico or to another TPP partner.
But Groser remains grounded about the whole process currently bubbling. There seems to be a wave of enthusiasm towards the idea of an international agreement without the U.S. but Countries still want to give Uncle Sam a chance to catch up giving the U.S. “a lot of political space here and a lot of time to reflect on its trade agenda,” he said.
Meanwhile U.S. agricultural exporters are keeping an eye on this file as they had high hopes for the TPP which represented a wide variety of opportunities for them: from cattle ranchers, grain growers and even wine producers, taking a bite of the Asian market seemed like a great opportunity. In fact, the American Farm bureau federation has estimated that TPP would have boosted annual net farm income by $4.4 billon. That’s quite a piece to miss out on.
Meanwhile, Australia will be pushing for a 10 percent tariff advantage over U.S. beef in Japan, New Zealand will be sending more milk and cheese to China and Canada is talking with Japan and India about sending over everything from farm products to banking services.
The World keeps on turning with or without the United States.