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ECONOMY > Trade

TPP effectively killed by Trump’s announcement

  • November 23, 2016
  • , Asahi, Mainichi, Yomiuri, Nikkei, Sankei, Tokyo
  • JMH Summary
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All Wednesday papers took up President-elect Trump’s statement on Monday declaring his intent to withdraw the U.S. from the TPP when he takes office on Jan. 20. The announcement flew in the face of the APEC’s declaration a day earlier calling for the need to counter “all types of protectionism” and Prime Minister Abe’s press remarks a few hours earlier saying that the TPP would be “meaningless without U.S. participation.” This development came as a shock to Abe because the TPP constitutes a key component of Abenomics and is viewed as an economic tool for reining in China’s growing presence in the Asia-Pacific region.

The GOJ still intends to obtain Diet approval of the TPP quickly so as to press other member states to follow suit with the goal of swaying the Trump administration to endorse it in the future. Japan is extremely cautious about the idea of forging a bilateral FTA with the U.S. as it would probably be forced to make greater concessions on agricultural trade than under the TPP. Some GOJ officials are concerned that Trump may choose to “rattle” Japan again by following through with his pledge to call on Japan to pay more for stationing U.S. troops in Japan.

Nikkei said the incoming U.S. administration may not intend to uphold President Obama’s “rebalance to Asia” policy, raising concern that China may pursue its maritime interests in the South and East China Seas more aggressively based on the view that Trump’s decision to withdraw from the TPP is a sign that Washington will reduce its engagement with Asia. The paper also projected that President-elect Trump will take a hardline approach in seeking a bilateral deal, triggering trade friction with foreign partners. Yomiuri conjectured that China is bound to capitalize on the U.S. withdrawal from the TPP to seize the initiative in rulemaking for global trade and creating a new economic order in the Asia-Pacific region by promoting the Regional Comprehensive Economic Partnership (RCEP).

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