Trump’s exit from the Asian trade pact damaged America and boosted China
Trade and foreign policy analysts say the US withdrawal from the Asia-Pacific trade pact designed to promote US economic and strategic interests over those of China will be one of the worst decisions ever by an American president for the past 50 years. Now that China has asked to join the CPP, Donald Trump’s move looks even worse than it was in 2017.
Background: President George W. Bush proposed a trade deal with like-minded Asia-Pacific countries in 2008. [Trans-Pacific Partnership] and succeeded in reaching an agreement between the parties, President Barack Obama fatally delayed the request for a trade promotion authority from Congress in 2014 ” writing Matthew P. Goodman, senior vice president for economics at the Center for Strategic and International Studies. “And in one of his first catastrophic acts as president, Donald Trump withdrew the United States from the unratified TPP, without realizing that it was one of the most powerful tools he had to compete with his sworn enemy, China. “
The latest developments: On September 16, 2021, China applied to join what is now known as the Comprehensive Trans-Pacific Partnership (CPTTP). The group of countries in the trade pact currently includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. China’s notification has been sent to the New Zealand Minister of Commerce, the CPTPP’s designated member for these matters, Remarks Wendy Cutler, Vice President of the Asia Society Policy Institute.
The New Zealand Minister of Commerce is well aware of the stakes. “It was in February 2017 and President Trump’s first speech to a joint session of Congress,” according to Tim Groser, who served as New Zealand’s Minister of Commerce (2008-15) and Ambassador to the United States (2016-18). “As the President announced the United States’ withdrawal from the Trans-Pacific Partnership, I thought of a conversation I had had with a particularly astute Asian ambassador. He had suggested to me that if a book on the decline of American influence in Asia and the Indo-Pacific was written – and he hoped it never would – its first chapter would be an account of the withdrawal of states. United of the TPP. . “
Will China be accepted into the trade pact? : China has prepared for admission to the CPTPP, even if the criteria and its bad relations with some of its members make the entry of the country uncertain. “Despite concerns over its inward-looking ‘dual circulation’ strategy, China has spent the past few months breaking down barriers to trade and investment to facilitate negotiation of its entry into the Trans-Pacific Trade Pact. 11 members, “writes Henry Gao. , Associate Professor of Law at Singapore Management University and author of a National Foundation for American Policy analysis on a U.S. Strategy Proposal to Solve China’s Trade Problems at the World Trade Organization (WTO), and Weihuan Zhou, Research Director at the Herbert Smith Freehills CIBEL Center at the Faculty of Law and Justice, UNSW Sydney.
“At the international level, such an approach is in line with China’s strategy to be more active in the development of international rules, following the conclusion of the Regional Comprehensive Economic Partnership Agreement (RCEP) with its Asian neighbors last year, and the Comprehensive investment agreement with Europe last December, ”according to Gao and Zhou. “This contrasts sharply with the approach taken by the Biden administration, which despite its ‘America is back’ rhetoric, has not been able to strike or even initiate a major international trade deal. during his first eight months in office. In addition, domestic political considerations will likely prevent the United States from returning to the CPTPP anytime soon. This creates a perfect window of opportunity for China to forge its way into a pact. trade that was, ironically, created by the United States to contain China. “
The impact on the United States: China’s latest actions and the US government’s poor policy choices are affecting US businesses. “First, China would have to overcome formidable obstacles to join the CPTPP. This should convince the current CPTPP governments that have persistent differences with China or question its willingness to join, ”said John Murphy, senior vice president for international policy at the US Chamber of Commerce. United, in an interview. “It would have to undertake deep reforms of its system of state capitalism and regulation to respect the terms of the pact and convince the other parties that it has done so. However, if Beijing were to overcome these hurdles, Chinese companies would gain substantial advantages over their US competitors in terms of accessing Asia-Pacific markets. “
Murphy notes, “The United States would face a significant setback in its efforts to shape the international economic landscape to support our values and interests. These dynamics point to the risk that Washington’s trade inaction will severely damage American competitiveness and the long-term prospects of American workers and businesses.
Joining the Asia-Pacific trade pact is a priority for the Chinese leadership. “China’s candidacy to join the CPTPP is not a spontaneous decision but has taken a long time to prepare,” said Gao and Zhou. “Since 2013, China has carefully studied the CPTPP, including its predecessor the Trans-Pacific Partnership (TPP). Last November, President Xi officially confirmed China’s intention to join the pact. In the long term, China’s accession could further consolidate Asia-Pacific’s role as the world’s largest economic bloc, with CPTPP and RCEP [Regional Comprehensive Economic Partnership Agreement] play complementary roles to further stimulate growth in the region.
The Trump administration’s trade policy was a story of inflicting great damage and achieving little success. The administration imposed tariffs on $ 350 billion in imports from China. The Congressional Budget Office estimated Trump tariffs cost the average American household more than $ 1,200 per year. The Biden administration maintained the tariffs.
Trump’s trade policies, especially tariffs on steel and aluminum, cost many manufacturing workers their jobs. The tariffs also resulted in the loss of an estimated $ 1.7 trillion market value by companies listed on the US stock exchange, according to research by Mary Amiti, an economist at the Federal Reserve Bank of New York, and Columbia University economists Sang Hoon Kong and David Weinstein.
The Trump administration’s trade policies have hurt consumers and businesses and have failed to meet their stated goals with China or the United States’ other trading partners. Donald Trump’s decision to withdraw the United States from the Trans-Pacific Partnership has created an opening for China and will continue to disadvantage American workers and businesses.