Kofi Ofori-Darko — Wesleyan University Student
On January 23, the White House signed an executive order to withdraw U.S. relations in the Trans-Pacific Partnership, a 12-nation deal that was negotiated under the previous administration. Though the deal was never formally approved by congress, the withdrawal from the TPP underscores America’s growing isolationism and decreasing commitment as a global trade partner.
This decision could be great news for one of America’s fiercest trade competitors: China. China is arguably the largest economic power in the region and has potential to take the lead on Asian development.
In the short term, the U.S. withdrawal from the TPP creates a vacuum in Asia’s economy, leaving the door open for other trade superpowers, such as China, to facilitate economic development of the rest of the region. Also, U.S. agriculture could suffer because of the high export tariffs. According to Congressional Research Service, Japan applies a 38.5 percent tariff on beef. TPP would’ve implemented an immediate 11 percent reduction on that tariff down to 27.5 percent, which would make U.S. beef more competitive with Australian beef that currently benefits from a free trade agreement with Japan. Overall, the U.S. would have seen an $815 million increase in beef exports, and a $7.2 billion increase in agriculture exports over 15 years, according to the International Trade Commission.
Despite the speculation around future U.S. involvement in Asia, it’s difficult to see a complete withdrawal from Asian markets in the near term. The U.S. already has deep military involvement in Asia, and this has been complimented by economic activity from U.S. companies. Former Secretary of State James Baker denounced opposition to increasing relations in Asia and described it as, “[drawing] a line down the middle of the Pacific.” To balance out the military presence, “arrangements such as KORUS-FTA and TPP provide a crucial economic equivalent,” Matthew Goodman of Center for Strategic and International Studies said. Deals such as the KORUS-FTA are not going away - at least for now - which will provide some stability.
In the future, the ability for the U.S. to maintain its status as the number one global economic powerhouse is uncertain. With Asia’s rapidly expanding economy, the lack of participation from the U.S. leaves the U.S. economy out of future economic growth activities. The Asian economy is going to continue to grow, and the U.S. economy will be missing out on a valuable opportunity to influence this expansion. TPP is probably not going to survive with the U.S. withdrawal but if any other economic superpower decides to spearhead Asian economic development, a new trade deal could arise.