As Trump kills the TPP, can China-backed RCEP fill the gap?
After Donald Trump dismantles eight years of TPP negotiations on ‘day one’ of his presidency, Asia will try to strengthen its own regional economic ties by reducing tariffs
With the stroke of a pen and possibly a string of accompanying tweets, US-President elect Donald Trump is poised to trigger the withdrawal of the world’s biggest economy from the Trans-Pacific Partnership (TPP) pact immediately after he takes office on January 20, sinking the ambitious free trade agreement even before it comes into force.
The exclusion of the United States from the 12-nation Pacific-Rim pact will mean that nearly eight years of negotiations done over 32 rounds – a process prolonged partly due to Washington’s expectations for a high-quality deal – now come to nought.
But leading trade experts are urging governments in trade-hungry Asia-Pacific nations from Singapore to Vietnam to quickly end their hand-wringing over the wasted effort, and instead conclude alternative deals without the US and its new protectionist leader.
Emerging at the top of the alphabet soup of potential trade pacts is the pan-Asian Regional Comprehensive Economic Partnership (RCEP), which excludes the US and until recently played second fiddle to the soon-to-be-killed Pacific Rim pact.
Experts say the RCEP can now be the centrepiece of 21st century free trade, a title they previously bestowed on the TPP.