Trump moves to pull US out of Pacific-Rim trade deal

JULIE PACE and JILL COLVIN

Associated PressJanuary 24, 2017

ricky l

1 second ago

TPP members will be calling a meeting to reduce the damages cause by Trump withdrawal of TPP.
Among measures to keep the multilateral trade deals in place could be :-

(1) Australia propose inviting China and Indonesia to replace US to the TPP.
This is a good idea because China and Indonesia with large population plus big Economy will be more than adequate to replace US economy.

This will be contingent on whether China and Indonesia is willing to pick up this option - as China is already leading the RCEP, FTAAP and One Belt One Road that is rivaling the TPP.

(2) Bilateral trades whereby we can negotiate with Mexico and Canada for a new FTA - as we already have FTA with other TPP members.

(3) Japan offer to talk Trump around the strategic and economic significance of TPP - to ask US to rejoin (it will be a formidable feat if Japan is able to do it - almost like mission impossible).

With US formal withdrawal of TPP - US economic influence in Asia Pacific will surely set to diminish and soon all Asia Pacific members - including other Countries (non Asia Pacific) will align more to China and Asia Pacific members who are stong adocate of trade for Economic Growth.

ricky l

1 second ago

This will also means the Global Economic Leadership will shift from US to China.
The new world order has come and the World will have to slowly adjust to this phenomenon.
Australia opens door to China in push to save TPP

Glenda KWEK

AFP NewsJanuary 24, 2017

View photos

The Trans-Pacific Partnership deal would have included 12 countries accounting for 40 percent of global trade

Australia said Tuesday it was working to recast the Trans-Pacific Partnership without the United States and opened the door for China to sign up after President Donald Trump ditched the huge trade pact.

The deal included a dozen Asia-Pacific nations which together account for 40 percent of the global economy, but Trump declared Monday he had "terminated" it in line with election pledges to scrap the "job killer" pact.

Canberra is floating a "TPP 12 minus one", with Prime Minister Malcolm Turnbull saying his government was in "active discussions" with other signatories including Japan, New Zealand and Singapore on how to salvage the agreement.

"It is possible that US policy could change over time on this, as it has done on other trade deals," Turnbull told reporters in Canberra, adding that the nominee for US secretary of state Rex Tillerson and Republicans supported the TPP.

"There is also the opportunity for the TPP to proceed without the United States," he added.

"Certainly there is the potential for China to join the TPP."

The agreement, the biggest trade deal in history, was seen as a counter to China's rising economic influence. It was signed last year but has not gone into effect.

Trade Minister Steven Ciobo said Australia, Canada, Mexico and others had canvassed for a pact without the United States at a World Trade Organisation ministerial meeting in Davos.

"There would be scope for China if we were able to reformulate it to be a TPP 12 minus one, for countries like Indonesia or China or indeed other countries to consider joining," Ciobo told the Australian Broadcasting Corporation.

"This is very much a live option and we are pursuing it and it will be the focus of conversations for some time to come."

New Zealand Prime Minister Bill English noted that Beijing "hasn't been slow to spot the opportunity" to cast itself as a free trade supporter.

There was a willingness towards "making an effort to find out what we can do with TPP, rather than just dropping it and waiting and hoping to get a call (from Washington) about bilateral agreements sometime", he told reporters in Wellington.

Trump said he would pursue bilateral deals with TPP signatories to secure terms more favourable to the US. But English said a US-New Zealand pact would be challenging given Trump's insistence that Washington would dictate terms.

- Chinese interest -

Alan Oxley, the first Australian to chair the General Agreement on Tariffs and Trade (GATT), the World Trade Organisation's predecessor, said Chinese involvement in the TPP was unlikely at this stage since it had bigger issues to tackle.

"China's certainly interested in the long run... but the prospect of them tying into the TPP now, given their own domestic economic problems, has got to be considered very low," Oxley, who heads the Australian APEC Study Centre at RMIT University, told AFP.

The most likely option for TPP nations was "let the dust settle" and wait for possible changes in US attitudes towards multilateral pacts.

"There was support for the TPP from the leaders of both houses of Congress... and trade policy is settled by Congress and the Administration," Oxley said.

"It's worth noting that (previous US president Barack) Obama in his first term opposed free-trade agreements, and in his second term switched positions.

"So US politics on trade policy is more fluid, I think, than some outside the US realise."

His view was echoed by analysts in Japan, even though Prime Minister Shinzo Abe -- a big supporter of the accord -- has said the TPP would not make sense without the US.

"Japan thinks it's worth patiently maintaining the (TPP) framework even until the United States possibly comes back to it under the next administration," Yoko Takeda, chief economist at Mitsubishi Research Institute, told AFP.

"Also, it is still unknown if the Trump administration is really walking away from TPP or if it could be a negotiating bluff. It's too early for Japan to change its stance."
If Trump ends America's world leadership, who will step up?
By JOSH LEDERMAN | Associated Press – 8 hours ago
Share

Tweet

Print
RELATED CONTENT
View Photo
President Donald Trump signs an executive order to withdraw the U.S. from the 12-nation Trans-Pacific Partnership trade pact agreed to under the Obama …
WASHINGTON (AP) — President Donald Trump's pursuit of an "America first" foreign policy is raising questions about who, if anyone, will fill the void if the U.S. relinquishes its traditional global leadership role. China and Russia are among the aspirants for greater economic and military influence, while an ambivalent Germany could emerge as the West's moral compass.

For generations, the U.S. has largely set the terms for the global economy, policed international security threats and spearheaded the response to crises like Ebola and Haiti's earthquake. But after sweeping into office with an isolationist-tinged message rooted in the idea the U.S. needs to refocus on itself, Trump has said and done little to dispel the notion that he wants the rest of the world solve its own problems.

In his inaugural address, Trump said the U.S. for too long has been invested in other countries' industries, militaries, borders and infrastructure while letting its own fall into "disrepair and decay."

"That is the past," Trump said.

In one of his first acts, Trump on Monday formally withdrew the U.S. from the Trans-Pacific Partnership, a project launched under President George W. Bush and negotiated by President Barack Obama to set trade rules with Asia and counter China's economic influence

Trump said he was doing a "great thing" for U.S. workers by tearing it up. But Sen. John McCain, a fellow Republican, said the withdrawal "abdicates U.S. leadership in Asia to China."

China isn't the only country that could profit from U.S. retrenchment. In their own ways, Russia and Germany also could stake a claim to a greater global role. But no one can simultaneously match America's economic, military and moral might, and a more isolationist U.S. could mean a power vacuum.

"There's no country or collection of countries that can do what the U.S. has done for the last half-century," said Jon Alterman, a former State Department official now at the Center for Strategic and International Studies. "It's partly a question of resources and capacity, and it's partly a question of ambition."

"A huge number of things will simply not be done," he said.

While U.S. rivals like China and Russia would relish the opportunity to try to replace the United States, many countries in Asia, Europe and elsewhere are fretting the prospect of an American retreat. Even Germany is unsettled about being increasingly looked to as a moral example.

China, which has been investing billions in Africa and Latin America to curry influence in the developing world, could become an increasingly dominant economic power. It already is aggressively pursuing a multicountry trade deal that would appear the likeliest alternative to TPP, a scenario Obama's administration had warned would let China "write the rules" and lead to worse labor and environmental standards.

Beijing has used Trump's inauguration as an opportunity to ridicule America's democracy and tout its own communist system as superior. And many of China's neighbors share its fears about Trump's threats to trigger a "trade war" with the Asian powerhouse by taxing Chinese products.

"Whether you like it or not, the global economy is the big ocean that you cannot escape from," Chinese President Xi Jinping said last week at the World Economic Forum in Davos, Switzerland, laying out his plans for growth, overseas investments and expanded trade opportunities. It was the type of agenda the U.S. might have previously touted.

America's military alliances are no sure thing, either.

Trump has suggested a broad rethink, calling NATO "obsolete" and challenging U.S. allies to bear greater cost while beefs up its military in the Pacific and Russia exerts military power in Eastern Europe, which suffered for decades under Soviet domination.

It's not the only place the Kremlin is flexing its muscles. In Syria, Russia has backed more than a year of successful Syrian government offensives against rebels and is currently directing peace talks between the two sides. The U.S. was but a bystander at the negotiations Monday, while the White House said it could partner Russia to fight the Islamic State group in Syria. Such an arrangement could significantly enhance Russia's reputation in the Middle East.

"With the election of Donald Trump, the old world of the 20th century is finally over," German Foreign Minister Frank-Walter Steinmeier wrote in the Bild newspaper, reflecting a broader European lament about confused international leadership and increased disorder.

Trump's push has mirrored a broader global debate about globalization vs. isolation. British Prime Minister Theresa May will visit Trump later this week, seeking cooperation from an American leader who cheered her country's vote to leave the European Union — which Obama campaigned against.

Philippine President Rodrigo Duterte, who once cursed Obama for the American's criticism of his country's war on drugs, has embraced Trump's "America first" approach and expressed relief the U.S. will no longer lecture others on how to behave. Hungarian Prime Minister Viktor Orban, long accused of undemocratic tendencies, echoed that message, declaring "the end of multilateralism" in the age of Trump.

While China's increased economic strength and Russia's military vigor may appeal to some, few Western-looking nations will turn to either for moral leadership. Germany has tried to fill that void, embracing hundreds of thousands of refugees and championing a dwindling multilateralism 70 years after being culpable for some of history's greatest ever atrocities in World War II.

But Germany, Europe's economic motor, has a glaring shortcoming: An inability to match the hard power of aspiring leaders in Moscow and Beijing. And for all her efforts, German Chancellor Angela Merkel faces a tough re-election later this year, where she will find out if her Germany is immune to the new populist surge.

___

Reach Josh Lederman on Twitter at https://twitter.com/joshledermanAP

@YahooSG on Twitter