Trump’s TPP pullout opens more trade opportunities for China: analyst

ABS-CBN News

Posted at Jan 27 2017 05:15 PM

Donald Trump’s pullout of the United States from the Trans-Pacific Partnership (TPP) trade deal creates the possibility of more trade opportunities for China, the world’s largest economy, an analyst said Friday.

Analyst Richard Heydarian said Donald Trump’s protectionist stance on American policies is opening up more trade opportunities for China since free trade agreements can now be dominated by Beijing. 

“The result of that so far seems like China is now trumping the United States as a regional leader at least in economic terms,” Heydarian said in an interview on “[email protected]

The TPP accord, backed heavily by US business, was negotiated by former US president Barack Obama but was never approved by Congress. 

It had been the main economic anchor of the Obama administration's "pivot" to the Asia-Pacific region to counter China.

Trump has sparked worries in Japan and elsewhere in the Asia-Pacific with his opposition to the TPP and his campaign demands for allies to pay more for their security.

Heydarian added that Trump’s policies are creating a “vacuum” in the region since the US has long been known as the international police.

“In fact, he (Trump) believes that prosperity and greatness can be brought back to America based on protectionist, nationalistic and self-referenced policies. Now, this is obviously creating vacuum in the region because for long, people are expecting Americans to be the sheriff in the town, to provide us with international public goods,” he said.

Aside from the TPP, other major free trade agreements that are dominated by China are the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia-Pacific (FTAAP-21).

Heydarian raised the possibility that Australia and Japan may soon invite China to join the TPP with the absence of the US, in what appears to be a “signaling game” between countries.

China, however, can only join the TPP if the “gold” standards of free trade in the agreement are lowered, according to Heydarian.

He noted that Trump’s desire for a “fair” trade could have manifested in the TPP since the US can set the rules in the said agreement. 

“On a macro-level, this is a setback for American leadership in some ways. On the mezzo level for the Philippines, this is not entirely a bad thing,” Heydarian said, saying security measures are being advanced for the Philippines.