Scrapping free trade deal will play into China’s hands

One of Donald Trump’s first acts as president will be to withdraw the US from the Trans-Pacific Partnership (TPP), the president-elect said in an announcement made directly to the public. The deal was signed by 12 countries which together cover 40% of the world’s economy, but has not yet been ratified.

“We are willing to continue to work with the parties to push forward the negotiation process to achieve positive progress at an early date”.

This happened on Obama’s first day in office.

The YouTube video of Trump, who has repeatedly criticized the TPP as “a potential disaster” for America, did not mention NAFTA, which he has also promised to either renegotiate or withdraw from altogether.

The move will boost Beijing’s plans to establish China centric trade blocs in the Asia Pacific and enter into free trade agreements with several countries.

It was issued just after leaders of the Asia-Pacific Economic Cooperation group ended their annual summit Sunday with a unified call to fight the backlash against free trade highlighted by Trump’s victory and Britain’s vote to leave the European Union. It singled out trade deals such as the TPP as key culprits.

Shinzo Abe, the Japanese prime minister, said the TPP would be “meaningless without the United States”, but the Australian trade minister said there could be other options.

In a video message shared Monday night on Twitter, Trump said their proposals are created to help the US produce more steel, build cars and cure disease.

The concept of reciprocity, Hufbauer added, historically the touchstone for bilateral trade agreements, means that each country makes concessions that give the partner “equivalent new access to its markets”. China has been pushing its own alternative trade pact, which excludes the Americas, although it has said other countries including Chile are interested in joining.

Trump’s determination to rip up the agreement will have horrified Abe, particularly after the property billionaire appeared to have softened his stance on other campaign threats, such as downgrading Washington’s security commitment to allies Japan and South Korea. If it succeeds, China would be in a strong position to lead a bigger, more ambitious free trade area in the future, according to CNN.

That has already proved to be a contentious issue for all three countries, given that Trump has declared NAFTA “worst trade deal ever” and wants to impose large tariffs on Mexican automobiles assembled in Mexico, where costs are much cheaper than in the US and Canada.