President Donald Trump Signs Executive Orders (Photo : Pool / Pool)
While almost everyone is caught off guard by Trump pulling the U.S. out of the Trans-Pacific Partnership (TPP), China will likely be gaining big benefits. Meanwhile, other countries might feel that they can't rely on the United States.
The new U.S. President signed the order in the Oval Office on Monday, saying, ". . . great thing for the American worker, what we just did."
The TPP trade deal has been the main economic pillar of the Obama administration's "pivot" to the Asia-Pacific region to counter the second largest economy in the world. The accord was signed by 12 countries in 2015 but was never approved by the U.S. Congress.
"The U.S. is now basically in a position where we had our horse, the Chinese had their horse--but our horse has been put out to pasture and is no longer running in the race," said Eric Altbach, vice president at Albright Stonebridge Group in Washington and a former deputy assistant U.S. Trade Representative for China Affairs.
"It's a giant gift to the Chinese because they now can pitch themselves as the driver of trade liberalization."
The U.S. pulling out of the TPP presents a big opportunity for China to step in and take the leading role in Asia. Taking advantage of Trump's protectionism, Xi and other Chinese leaders can boost ties with traditional U.S. allies like the Philippines and Malaysia.
While the U.S. has it's TPP, China has its Regional Comprehensive Economic Partnership (RCEP). It is a 16-nation pact that excludes the United States and lacks some of the environmental and labor protections that the previous administration has negotiated into the TPP.
Meanwhile, other nations such as Australia and Malaysia who have championed the TPP quickly signaled that they would now shift their attention to China's RCEP.
"Trump's withdrawal directly undermines all of this careful work and gives China yet another opportunity to demonstrate that it represents the future of the security and economic system in East Asia, and that the U.S. is in decline and can't be counted on to stick around," said Jack Thompson, a senior researcher at the Centre for Security Studies in Zurich.
The pull out of the TPP proves that Trump is quite serious in following through with his past pronouncements. Everyone will be in anticipation of the new U.S. President's next move.
