Analysis: TPP exit undermines US role in rule-making, giving opportunities to China

President Donald Trump delivers his inaugural address at the US Capitol on Friday. Photo: Getty Images

President Donald Trump has followed through on a promise from his presidential campaign to withdraw the US from the Trans-Pacific Partnership (TPP) trade deal in a move that he doggedly believes will bring back more jobs to his country.

The new president described the move as a "great thing for the American worker", as he signed the executive order in the Oval Office on Monday, marking a changeover of America's traditional, bipartisan trade policy to reduce trade barriers and promote economic globalization.

Negotiated by the Obama administration, the TPP trade deal was regarded as an economic ballast of the administration's pivot to Asia strategy aimed at containing China.

In the interviews with the Sino-US.com, several analysts from China and the US weighed the impact of the US' alienation from the TPP accord.

An exit from the TPP amounts to the US acting as a destroyer of globalization. It is in line with the "America First" policy that President Donald Trump promised in his inauguration speech. In a short term, it will weaken the US' dominant role in making the global trade rules, thus giving China and other countries an opportunity to seek more international cooperation. However, the reality is that many trade rules hardly come into being without the participation of the US.

In the long run, it is predicted that the US will find an alternative to the TPP in order to maintain its say in the making of global trade rules. In the future, the frictions between the US and other countries will likely grow. It is noteworthy that the US will go out of its way to stop China from promoting regional cooperation regardless of an exit from the TPP. — Liu Dewei, a research fellow at Pangoal Institution

China, the US and other countries in the Asia Pacific region should work together to promote the Free Trade Area of the Asia Pacific (FTAAP), as China has become the biggest beneficiary of globalization. President Donald Trump's announcement to withdraw from the TPP shows that the US is walking away from multilateralism to unilateralism. It poses a big challenge to global governance advocated by China. We need new rules in the 21st century as international trade of cargos, cross-border investment and people-to-people exchanges are increasing.

The FTAAP offers an opportunity for China and the US to jointly make the global economic rules, because a FTAAP would not be complete without the US. The economic benefits brought by the FTAAP will be bigger than the TPP and the Regional Comprehensive Economic Partnership (RCEP). For China, FTAAP benefits would be 2.7 times as large as in the RCEP, and for the US the gains would be 2.5 times as large as in the TPP, according to a report by Peterson Institute for International Economics. What's more, some rules of the TPP can be applied to the FTAAP. — Wang Huiyao, a counselor of China's State Council and president of the Center for China and Globalization (CCG)

In the context of the abortion of the TPP, China and the US could speed up their negotiations on the Bilateral Investment Treaty (BIT), which will likely develop into a multilateral investment treaty. It will be good for the global trade and security cooperation.

Chins doesn't intend to drive the US out of Asia, and the US' freedom of navigation operations in the South China Sea do not go against China's principle in the waters. The two countries should deepen communication at different levels in order to avoid misunderstandings.

The stable relationship between China and the US will not be affected by the power transition in the US. China should not be excessively serious about President Donald Trump's critical words about China during his presidential campaign. China should establish ties with the Trump administration to know how it will work in the US' established political system. — Zha Daojiong, professor at the School o International Studies of Peking University

The US should reduce confrontations with China after President Donald Trump announced to withdraw the US from the TPP. The US should accept the fact that China has emerged as a great power in the Asia Pacific region, and intensifying tensions in the region will harm the healthy development of the US-China relations.

The most critical point in Trump's criticism about China lies in the bilateral trade. He has said that he will impose 45 percent duties on Chinese goods. But it is impossible to do that because the American economy cannot grow without China, the world's second-largest economy. As a businessman, the new president will continue to develop trade between the US and China.

Also, it is irrational for Trump to label China as a currency manipulator, as the Chinese government did well in liberalizing the yuan's exchange rate. — Bill Goodfellow, co-founder of the Center for International Policy

A US exit from the TPP will add to uncertainties in the emerging economic structure in Asia, where Southeast Asian countries badly depend on trade and global markets. The collapse of the TPP casts doubts to the global efforts to promote free trade and increases uncertainties in China and ASEAN nations' efforts to ink the RCEP. China and TPP countries hope to use the RCEP to fill the vacuum in the region.

The relationship between the US and ASEAN nations is volatile, and the US' trade policy change will affect the forecast for the security and economic situation across the Pacific Ocean. However, the US has everlasting interests in ASEAN nations, which are important importers of the agricultural products from pro-Trump states.

Data has shown that most Americans are in favor of free trade to maintain the security and prosperity of the US. — Amy Searight, senior adviser and director of the Southeast Asia Program at the Center for Strategic and International Studies
 


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