By Julian Borger
23 November 2016
President-election’s decision to back out of Trans-Pacific Partnership meets with dismay among supporters in Washington and friends of the US in the region
Donald Trump’s vow to leave the Trans-Pacific Partnership has triggered a backlash among prominent supporters in Washington, who portrayed the decision as a strategic capitulation to China.
The US president elect, who campaigned on an anti-trade platform, said he would sign a note of intent on his first day in office, 20 January, to leave the TPP, a 12-nation trade deal that took the Obama administration seven years to negotiate.
“Instead we will negotiate fair bilateral trade deals that bring jobs and industry back on to American shores,” Trump said.
Backers of the deal, including the country’s former top military officer and Republican senators, argued that the TPP was not just an economic issue but a strategic one, and warned abandoning it could cost the US its leadership status in the Pacific.
The TPP excludes China, which declined to join, proposing its own rival version, the Regional Comprehensive Economic Partnership (RCEP), which excludes the US.
“I was a huge supporter of the TPP,” said retired admiral Mike Mullen, a former chairman of the joint chiefs of staff. “What you see on the trade front post-election is China leaning in with its very nascent trade structure (RCEP) and saying: ‘Come join me.’ And I think that giving China that kind of leverage is a disaster for the long run.”
The TPP was at the heart of Barack Obama’s intended “pivot to Asia”, where he saw the best prospects for growth and the most decisive rivalry of the 21st century, between the US and China.
Many Republicans in Congress agree.
“This decision will forfeit the opportunity to promote American exports, reduce trade barriers, open new markets and protect American invention and innovation,” said Senator John McCain, who is already emerging as a bastion of congressional resistance to the future Trump administration.
“And it will create an opening for China to rewrite the economic rules of the road at the expense of American workers. Already China is intensifying its push for a new regional trade agreement, which excludes the United States.”
He Weiwen, vice-president of the Centre for China and Globalisation, said the Trump move represented an opening for Beijing. “We have been spending efforts for years to get (RCEP) done by end of this year or next,” he told CNBC.
Trump’s election and his apparent determination to carry through on his TPP campaign promises came as a shock to US allies in the Pacific.
“America’s prosperity has been built on a free and open market and participation of global economies,” the Australian ambassador to Washington, Joe Hockey, said in a speech in Detroit on Monday.
“So speaking as one mate to another, I can say emphatically that free trade is in your best interests.
“We look forward to the opportunity to provide perspectives from the other side of the world to a new administration that has a look at trade and policy. We don’t believe that America in its heart has changed its view in relation to free trade but we recognize that there is a certain level of introspection going on.”
On a visit to Buenos Aires, meanwhile, the Japanese prime minister, Shinzo Abe, said the TPP would be “meaningless” without the US.
However, Christopher Hill, a former assistant secretary of state for east Asian and Pacific affairs, said the stalling of the TPP did not necessarily imply a wholesale shift to China’s RCEP.
Major US allies were unlikely to make their trade relationships in the region entirely beholden to Beijing, he argued.
“Having been to many of the countries in the TPP, I don’t think they are prepared to throw it out of the window and choose China,” said Hill, now dean of the Josef Korbel School of International Studies at the University of Denver.
“Most of those countries have familiarity with China and don’t want to go back to being tributary states. They’ve been there, done that.”
Hill was more worried about other threats Trump made during the campaign, during which the president-elect accused China of cheating in its trade relations, to the detriment of the US resulting, in “the greatest theft in the history of the world”.
To rectify the situation, Trump said, he would label China a “currency manipulator” and put a 45% tariff on Chinese imports.
“Then we enter a full-blown trade war,” Hill said. “We are in uncharted waters.”