If Donald Trump turns his back on Asian economies, China is ready and willing to step into the vacuum.
During the election campaign, Trump blasted international trade deals, tapping intoa deep well of popular anger over the effects of globalization. Now, President-elect Trump’s first victim could be the huge Pacific trade agreement that he slammed as a “disaster done and pushed by special interests who want to rape our country.”
The Trans-Pacific Partnership (TPP) was a key plank of President Obama’s push to boost U.S. influence in Asia. But now it looks doomed, with Congress refusing to ratify it and Trump having vowed to kill it.
“You can’t overestimate what a change this is,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “The United States has been working since the end of the Second World War to liberalize trade.”
‘China has freer rein’
China isn’t waiting around for the TPP’s funeral. It’s already pushing its own trade deal with leaders from around the Pacific as they gather for a summit in Peru this weekend.
“The prospect of the U.S. turning inward in its economic strategy means that China has freer rein to become the focal point of regional integration efforts,” said Mireya Solis, a senior fellow at the Brookings Institution. “The U.S. appears as largely bereft of a constructive economic strategy towards the most dynamic region in the world.”
Linking the U.S. with 11 countries around the Pacific, the TPP would have been the biggest regional trade deal in history, spanning nearly 40% of global GDP and about a third of world trade. China didn’t take part in the talks.
The Beijing-backed plan, the Regional Comprehensive Economic Partnership (RCEP), is smaller economically. It covers 16 nations, accounting for almost 30% of global GDP and more than a quarter of world trade. But if that succeeds, China would be in a strong position to lead a bigger, more ambitious Asia-Pacific free trade area in the future.
Full article: China is ready to pounce if Trump axes Pacific trade deal (CNN Money)