In a video statement last week, President-elect Donald Trump laid out as his first priority the U.S. withdrawal from the Trans-Pacific Partnership trade pact.
U.S. membership in the TPP became the skunk issue of the campaign as candidates and voters circled in on the theory that TPP and other international trade treaties had led to the export of U.S. jobs overseas. They therefore needed to be ditched or renegotiated for future economic health; it was an essential part of making “America great again,” Trump’s rallying cry.
The TPP was one of the key pieces of President Barack Obama’s “pivot to Asia” and the part of his economic policy that posited America’s recovery from the recession and growth on freer trade with Asia and on the Transatlantic Trade and Investment Partnership, an agreement between the U.S. and European Union, also apparently on the rocks now.
The TPP was signed by 11 other Pacific rim nations, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. China was excluded, which the Obama administration saw as one of the pact’s advantages.
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The economies of the countries signing the accord added up to about 40 percent of the world’s gross domestic product. The removal of tariff barriers among them would make a significant difference in world trade. Obama saw it as to America’s advantage. Trump does not agree.
The question now is, what happens to the TPP with the United States out? One possibility is that, without U.S. participation the agreement will simply sink beneath the waves. Another alternative is that the other 11 countries that signed it will continue to see virtues in it, even without U.S. participation, and will ratify it.
It also could be that the other 11 TPP signatories will now invite China on board, eliminating that virtue of the TPP for the United States. Given the size of its economy, China could come to play within the TPP the same leadership role that it is likely to play in implementing the Paris climate change agreement, if the United States drops out as Trump has promised.
Voters expressed on Nov. 8 their deep skepticism that the kind of growth offered by U.S. international trade agreements outweighed the destruction of jobs in the American heartland. The coming years of the Trump administration will show if the choice was correct, and if the new president can strike deals that treat the American worker fairly.