US President Donald Trump on Monday signed an executive order withdrawing the country from the Trans-Pacific Partnership (TPP), leaving the shipping industry to wonder what might have been.
Trump made axing the TPP – a 12-nation trade pact that had yet to be ratified – one of the main planks of his campaign promises on the grounds that it was harmful to American companies and workers.
But advocates of the TPP say it would have been a great boon to American business and shipping because it would have given near duty-free access to Asian countries where incomes are rising and where the people have a taste for high-quality products.
By removing an estimated 18,000 different tariffs on US products it would have greatly boosted container volumes.
Withdrawing from TPP, say critics of Trump’s action, could signal that the US is not committed to Asia – widely regarded as the most economically dynamic region on the planet – as opposed to previous President Barack Obama’s policies of engagement there.
Apart from the TPP the other 11 parties to the TPP were Canada, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Singapore, Brunei, Australia and New Zealand. Without US participation, the whole deal could well fall apart.
It was the largest free trade agreement (FTA) since NAFTA in 1994. And President Trump is intent on undoing that deal, too, as per his campaign promises.
One party other than Trump’s supporters who will be happy at this action is China, which was excluded from the TPP and which saw it as a threat to its own companies from other low-cost Asian nations.