The TPP has been seen as America's strategic play in Asia, how will this change with a Trump president?
RALEIGH, N.C. & MANHATTAN, N.Y. - Nov. 9, 2016 - PRLog -- As the country and the world adjusts their positions both professionally and personally after Donald Trump won the presidential election, many questions are being asked around his key policies, both raised and hinted on the campaign trail.
Trump has been very vocal on the campaign trail around trade in general. He says he supports free trade, however he wants to re-negotiate NAFTA, and squash the TPP. In my recent book on the TPP, I provided an unbiased view of the agreement, and I also covered the scenario in which Trump is elected into office.
Currently I see two possible scenarios on the table. The first is the most obvious based on Trump's comments, and that is Obama will not be able to get the votes in a lame-duck period to ratify the agreement, and if he somehow does, there is the threat that Trump will squash it in his first few days in office. This is not to say that Obama is going to lie down; quite the contrary, I think there will be a huge amount of discussion and debate between now and the end of December on the TPP, however the likely scenario is that congress will vote it down, if it goes to a vote at all.
The second scenario is a little less likely, however one that bears discussion. Over the next few weeks, Trump will be going through a transition from possible candidate, and all of the aggressive rhetoric he used to get voted, to a more reasonable, level headed President Elect persona. If this is the case (and that is up for negotiation), there is a chance that he will start to reach out to other world leaders and listen to those that understand the TPP. Trump has always put China on his foreign trade target list (threats to impose 15% import tariffs among other protectionist moves), and if he starts to understand that the TPP is, in effect, a way to remove China's power in Asia, and strengthen America's power in the region, then he might start to pay closer attention. Many Asian leaders have already said that the TPP will not be renegotiated (Prime Minister Abe of Japan, Prime Minster Lee of Singapore, and Prime Minister Razak of Malaysia). The way the ratification process works between the 12 nations is that Japan and the US need to ratify the agreement at a minimum for implementation. Without the US's agreement, the entire TPP will dissolve.
So what happens if Trump does squash the TPP and the agreement dissolves? Many Asian leaders have openly said that without the TPP, they need to align with another trade agreement, this time the RCEP (Regional Comprehensive Economic Partnership), which is a trade agreement led by the Chinese, and only includes Asian countries. Coupled with the anger that most Asian leaders have towards the US after they stuck their political neck out at the request of Obama to gain agreement for the TPP in their own countries, they now see it might be for nothing if Trump's successful in asking Congress to vote the agreement down.
These two influences of the RCEP and heightened anger towards the US (coupled with Philippines' President Duterte's vocal views on the US), there is a chance that the US will lose its influence in Asia unless Trump re-evaluates his view of the TPP. This, in my view, will also squash any interest the Asian nations will have in forming a new US agreement to replace the TPP, as the years of negotiations and concessions provided by each country were lengthy and painful, and if it's all for nothing, there will be no appetite to continue working with the US in regards to trade agreements.
With all of these issues in play, there is a chance that Trump will agree that the TPP is not perfect, however the alternatives may be far more impactful on the US and its ability to grow and prosper, including enhancing the security of the Asian region.
Whichever way it goes, there are 1000's of American companies that will need to know how these changes will affect their business, supply chain, and global structure, among many other things. We work every day with American businesses of all sizes to help them through these types of discussions, to ensure risk aversion, and growth maximization.
http://www.apacconsult.com
Contact
Timothy Barnes
Asia Pacific Consulting www.apacconsult.com
***@apac-nc.com
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Trans-Pacific Partnership - Post Election Chances
November 09, 2016 at 10:30 AM EST
