03 December 2016
The effect of the end of the TPP on Malaysia goes beyond the immediate economic loss of increased benefits of free trade. It shifts the balance of power further towards China, while losing out on the chance for an external trade agreement to enforce better standards of business and governance practice.
Throughout his campaign, President-elect Donald Trump has promised to repeal the Trans-Pacific Partnership agreement (TPP), and has in fact reaffirmed his commitment to withdraw from the landmark trade deal. Described as the “gold standard” for free trade agreements for its tariff-cutting measures and standards of compliance, it features 11 other countries, namely Malaysia, Singapore, Brunei, Vietnam, Japan, Australia, New Zealand, Canada, Mexico, Peru and Chile. These countries stand to benefit economically by reducing or removing tariffs, while the United States is able to gain a strategic foothold in Asia.
All this is set to change with the current Obama administration suspending efforts to win congressional approval for the TPP, preferring to leave it to the incoming president and predominantly Republican lawmakers to handle. Prior to Trump’s latest announcement, Japanese Prime Minister Shinzo Abe declared the TPP useless without US participation.
… Rashaad Ali is a Research Analyst with the Malaysia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.
IDSS / Online
Last updated on 07/12/2016