China could fill gap in Trans-Pacific Partnership after Trump torpedoes US involvement
Author: PM editorial | Date: 25 Jan 2017
Diminished trade with America could affect job creation but Singapore stays committed to regional integration
One of newly inaugurated Donald Trump’s first acts as incoming US President has been to remove the US from the Trans-Pacific Partnership (TPP) trade agreement.
Now, the remaining members are weighing up the best way for the TPP to continue and become fully ratified. Australia’s Prime Minister Malcolm Turnbull has said he thinks China could fill the void.
Singapore’s Ministry of Trade and Industry (MTI) issued a statement, which suggested it too will look for the best way to keep the TPP alive.
“[The MTI is] committed to pursuing a rules-based trading system and greater regional integration,” it said. “The agreement that the TPP parties has negotiated is one such pathway to achieve stronger trade linkages that will promote growth opportunities and job creation in all the member countries. We will have to discuss the way forward with the other TPP partners. Each of the partners will have to carefully study the new balance of benefits.”
The TPP agreement was signed in February 2016, after seven years of negotiations between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Brunei. The US economy is bigger than the other 11 nations combined and losing such a big trading partner could have an impact on jobs.
Barack Obama’s administration claimed that it would "promote economic growth and support the creation and retention of jobs” but during the US election campaign, notable figures on both sides of the political spectrum were critical of it.
While Singapore has been a big advocate of the TPP, political commentators have suggested it could cope without it and could even become a trade link between the US and Asia.
Nations with notable manufacturing sectors, like Vietnam and Malaysia, may be less optimistic if they lose out on access to the North American market.
However, there are other ongoing trade initiatives that China is already involved in, such as the Regional Comprehensive Economic Partnership and the proposal for a free trade area of the Asia-Pacific region.