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Jan 31 2017 by Desiree Burns
Since the new President came to power on 21 January, 2017, the US has passed numerous new policy domestic and global policy decisions.
In November, Chinese President Xi Jinping attended the Asia-Pacific Economic Cooperation (APEC) forum in Lima, where he promoted the Regional Comprehensive Economic Partnership (RCEP), an alternative to the TPP which is now being negotiated by 16 states in East Asia and Australasia.
Donald Trump became president on January 20; on January 23, without wasting too much time, and keeping a pledge he had made during his election campaign, he signed an executive order formally withdrawing the U.S. from the agreement.
The TPP involved setting strict labor and environment regulations and higher intellectual property rights protection. In particular, it finally brought the United States and Japan, the world's largest and third-largest economies, together in a free-trade pact'.
Former President Barack Obama negotiated the TPP, but it was never ratified and was not expected to pass in Congress, CNN reported.
According to CNN, the withdrawal from TPP serves as a sign to Democrats and foreign leaders that Trump intends to keep his campaign promises.
The TPP was negotiated by the Obama administration, which made it one of its priorities in trade policy and within its strategy to deepen ties with the Asia-Pacific region. In the China-US trade relationship, both countries can exercise leverage.
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Some Democratic lawmakers spent their weekend at major airports, joining protests against the president's executive action. Demonstrators also packed numerous country's major airports over the weekend protesting the executive order .
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In order of importance in the tuna industry, USA and Japan are followed by the "all star league", made up of Vietnam, Mexico and Peru, which are producers, exporters, and importers.
If this mega trade deal comes to fruition, it would be the largest trading bloc in the world, encompassing 3.4 billion people, a cumulative GDP of $17 trillion, with 40% share of global trade.
Fitch believes this could potentially be more relevant to the APAC economic outlook than United States withdrawal from TPP.
"As a business organization, we'd be pleased to see (Trump) re-enter negotiations, whether in multinational groupings or more of a bilateral approach", said Doug Loon, president of the Minnesota Chamber of Commerce. In fact, what he says is more like a negotiating position, "If you do not stop subsidizing your exports, stealing our intellectual property, and manipulating your currency, then we will institute countervailing tariffs".
Obviously, the new President felt that the decision would protect American jobs and draw those that went out back in. Outsourcing of jobs to cheaper markets has also been a concern. With few experienced trade negotiators and the loss of Sir Ivan Rogers, her chief negotiator, she has fewer options than she did before she met Trump - and before she even sits down at the table with Merkel and Co. The primary objective of protectionism is to make local businesses or industries more competitive by increasing the price or restricting the quantity of imports entering the country.
The atlantic reported that Trump said he would impose a 45 percent tariff on imports from China, and a 35 percent tariff on all products that American companies make overseas and try to sell in the U.S. It further quotes him as tweeting "Please be forewarned before making a very expensive mistake!" to American companies considering relocating their factories overseas. From western countries to worldwide financial organizations have been pushing for more trade, less government interference, increased interconnection through speedy moves of globalization and opening up markets for foreign investors. Trump plans to improve upon the current trading deal since it has increased trade on agriculture and manufactured goods. Coming from the only superpower in the world, the measure is highly unlikely to be repealed through collective bullying or orchestrated unconstitutional changes of government. This protectionism, according to classical free-traders, will make the USA and world economy worse off in the same way that the Smoot-Hawley Tariff Act of 1930 deepened and lengthened the Great Depression.