Donald Trump’s irrational decision to withdraw the United States from the Trans-Pacific Agreement
The Trans-Pacific Partnership (TPP) is a previously proposed trade agreement between 12 countries that aimed to strengthen economic relations between these countries by removing tariffs and promoting free trade. The twelve countries involved in the signing of the TPP proposal on February 4, 2016 were Canada, Japan, Australia, Mexico, Vietnam, Singapore, Brunei, Malaysia, New Zealand, Chile, the United States and Peru. Donald Trump’s executive order to take the US out of the TPP on January 23, 2107 was a serious mistake. Trump withdrew the US from the TPP with the intention of improving US job growth and restoring deteriorating manufacturing. He believes the TPP is bad for American employees and manufacturing because a huge number of American jobs would be exported to low-wage countries. Many US companies outsource jobs to other countries to capitalize on cheaper labor and operating costs. While Trump’s decision promotes job growth in the US, it will be more damaging in the long run because it will be difficult for the US to maintain its influence and leadership in international economic and political affairs. Furthermore, China would be in a position to take advantage of the US exit from the TPP and become a dominant country in the global economy. Therefore, Trump’s decision will do more harm than good for the US economy.
By giving up the TPP, the US misses a great opportunity to expand its markets, eliminate tariffs and promote exports. The TPP would have been the largest free trade agreement in history because the countries involved control an annual gross domestic product (GDP) of approximately $28 trillion, which represents approximately 40 percent of world GDP and one-third of world trade. . The implementation of the TPP would have vastly improved international trade relations between the original countries involved, which would have been far more beneficial to the US than Trump’s plan to increase national job security. Fortunately for the US, there have been no immediate sanctions on international trade flows for its decision to withdraw from the TPP because it still maintains existing free trade agreements with six of the TPP countries (Mexico City, Chile, Singapore, Australia , Canada and Peru). ) . However, Trump’s decision will put the US at risk of economic and political disaster in the near future.
As a result of Trump’s decision, China was given a great opportunity to overtake the US and become the dominant country in the global trading economy. Chinese President Xi Jinping plans to take advantage of Trump’s foolish decision to improve China’s relations with several of the other countries involved in the TPP. China intends to negotiate a new free trade agreement with several of the original countries involved in the TPP and other neighboring Asian countries. The proposed new free trade agreement is called the Regional Comprehensive Economic Partnership (RCEP), and would include 16 Asia-Pacific countries. Like the TPP, the RCEP aims to promote free trade by eliminating tariffs and strengthening economic relations between the countries involved. If the RCEP is successfully implemented, then China will be in such a strong position to create the guidelines for
Many Asia-Pacific countries invested an enormous amount of political capital in a US-led trade deal that was not administered. Therefore, since the US was unable to commit to the TPP, its reputation and credibility are greatly undermined. This will be a disaster for the US economy because it will lose most of its influence in the Asia-Pacific region. Many countries, both in Asia and Latin America, already view China as the superior and more reliable country than the US in the global trading economy. These countries prefer to negotiate trade deals with China because it is difficult for them to trust the US. The US should be the dominant country in the global trading economy, not China. Trump is leading the US to failure because he should have realized earlier that his decisions would have devastating consequences for the US economy. The US should have seized his opportunity to claim a position of authority and create the guidelines for the global economy, instead of handing it over to China. In the future, it will be difficult for the US to negotiate favorable trade terms and gain access to the Asian supply chain because strong economic relations will be established between China and most Asia-Pacific countries.