Across The Border | Trans-Pacific Partnership failure may be China’s gain, Asia’s loss
Many Asian economies will benefit less under a China-led trade pact than they would have done under the now-doomed TPP, analysts argue
The controversial Trans-Pacific Partnership, a 12-nation free trade deal championed by US President Obama, seems to be dead in the water.
But the retreat on the part of the US has created an opportunity for China, which was not part of the TPP negotiations, to increase its Asian influence, analysts say.
Nonetheless, a China-led trade pact may not compensate for the failure of TPP in terms of its likely impact on the economic prosperity of other economies in the region, they argue.
The demise of the TPP is a blow to economic prospects in emerging Asia
After the Obama administration suspended its efforts to bring the TPP to Congress for a vote before Donald Trump takes office, the landmark trade deal, which embodies the US strategic pivot to Asia, now appears to be beyond rescue.
The failure of the TPP is good news for China, which has been increasingly flexing its muscles in a battle of might with the US for power and influence in Asia.
“China benefits from what appears to be the likely disengagement of the US (from TPP),” said Marc Chandler, global head of currency strategy with Brown Brothers Harriman.
China is already in negotiations on a parallel free trade agreement in Asia, the Regional Comprehensive Economic Partnership (RCEP), which includes all the Asean (the Association of Southeast Asian Nations) countries plus Australia, New Zealand, Japan, Korea, India, but excludes the US.