Written by Tharushan Fernando
25 Jan, 2017 | 5:13 pm
President Trump formally abandoned the 12-nation Trans-Pacific Partnership brokered by his predecessor .
The move brings to an end to an era of multinational trade agreements that defined global economics for decades.
China has welcomed this move which leaves room for them to push it’s own brand of trade within the reigon.Beijing is already pushing its own trade deal known as the Regional Comprehensive Economic Partnership (RCEP). It includes many countries, such as Japan and Australia, that would have been in TPP.
Asia is home to many of the world’s fastest growing economies.
Trump had campaigned on protectionist trade policies and called the TPP a “disaster done and pushed by special interests who want to rape our country.” and has also called on renegotiating the NAFTA.
The Trans-Pacific Partnership was a mega-multinational trade agreement encompassing 12 countries, who together account for 40% of global GDP and 20% of global trade. The deal would eliminate around 18,000 tariffs.While Trump officially withdrew the US, by far the biggest signatory to the deal, from the TPP Monday, no other country has yet made signs of withdrawing from the partnership.
TPP included provisions that would have required countries like Vietnam and Brunei to observe international standards relating to forced labor and collective bargaining — principles that have long been valued by the U.S
The TPP would have included Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The Regional Comprehensive Economic Partnership (RCEP) composes of the 10 member states of the Association of Southeast Asian Nations (ASEAN) and six states with which ASEAN has existing free trade agreements.The deal does not include the US but both Japan and Australia are involved. If the RCEP is approved, it would create one of the world’s largest free-trade zones.
President Xi has been pushing for the defense of globalization, howeve China protects its own huge state-owned enterprises at the expense of foreign firms. It also restricts access to its domestic markets. President Xi has stood by Bejing strategy, noting that China’s succes is because it followed it’s own path and as such it would not It will not seek to impose its standards on other nations
The RCEP countries make up 46% of the global population and are worth 24% of global GDP.
RCEP would include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and the six states with which ASEAN has existing free trade agreements (Australia, China, India, Japan, South Korea and New Zealand).
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