By Uddipta Ranjan Boruah
Among many other rapid alterations brought up by the American president Donald J. Trump after his taking of office, the termination of the Trans-Pacific Partnership (TPP) is one worth talking of. The TPP is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore, Vietnam and the United States of America (till January 2017 when Trump decide to abandon it). The TPP aimed at reducing both tariff and non-tariff barriers to trade between the signatories and establish an investor-state dispute settlement mechanism. Once in operation, it was expected to be the largest regional trade bloc in the history with an annual gross domestic product of nearly $28 trillion, i.e., roughly 40 percent of global GDP and one-third of world trade. Trump’s predecessor Barack Obama had carefully steered the TPP with a view to bind the Pacific nations closer through lower tariffs and in a way checking the rising Chinese influence in the region. At an ordinary glance the act of abandoning the TPP appears to be the mere rejection of a trade agreement. But viewed in light of the series of events occurring across the transatlantic of late, the act appears to have far reaching implications for the world at large. Above all the American exit from the agreement signals Trump’s reluctance to engage in the global theatre any more at the cost of domestic interests of the US. Trump built on his election campaign by criticizing his predecessor for unnecessary involvement in the Middle East and the world in general. As explicit, Trump and his supporters look up to reducing the US involvement as a global leader. The decision to abandon TPP thus seems to be in line with two popular catchphrases of Trump during his election campaign – “America First” and “Making America Great Again”. The agreement had already become a flashpoint during the US presidential campaign wherein nominees of both major parties had opposed it citing loss of American jobs overseas and competitive wages.
Questions that tickle the consciousness of international policy circles at this critical juncture are – how does the U.S. withdrawal from the global theatre impact the transatlantic world order administered by the U.S. since the end of World War II? Does the US withdrawal in anyways pose a question mark to the merits of free trade and globalization? How does US withdrawal impact the Asians?
The world requires no mention of U.S.’s role in the aftermath of the World War II in tying together the devastated Western Europe and upholding a world order based on liberal values. The end of the Cold War had proved the resounding victory of the Western world order, making globalization and trade liberalization the dominant narratives. After more than seven decades of World War II, Europe now appears to be disillusioned with the fruits of free trade that they had once engulfed rapidly. This perhaps has been granting leverage to the economic nationalist leaders across Europe and fueling a wave of populism across the continent. The financial crisis in Greece, the never-ending migration crises, withdrawal of Britain from the eurozone and talks of a similar withdrawal by France in coming times has been keeping the continent in sheer restlessness for a while. Under such circumstances, the withdrawal of the US as the global leader and Trump’s resolve for an inward-looking policy is undoubtedly expected to pose a threat to the Western world order. The prospects of stability in the transatlantic without a dominant role of the US had forever been uncertain and for that matter is still under jeopardy. In regard to US involvement in the Europe in coming times, all eyes must definitely look up to the upcoming Summit of North Atlantic Treaty Organization (NATO) leaders in May 2017 (NATO is the umbrella organization for collective security in Europe). It requires mention here that in respect to the NATO, Trump had already called it “obsolete” given its creation long back in the midst of the Cold War. Talking at a Pennsylvania scrap facility earlier in June 2016 Trump had urged the U.S. to follow the trend set in by Britain’s withdrawal from the European Union. He further stated, “Our friends in Britain recently voted to take back control of their economy, politics and borders. Now it’s time for American people to take back their future. We are going to take it back”. Going by his proposed strategy of international isolationism, if Trump eventually takes up a decision that does not favour active US involvement in the NATO, the collective security initiative is bound to face severe setback. If that is to happen, the supremacy of the West would further depreciate in coming times.
Talking of globalization and free trade in general, it seems to be too early at this time to call the coming of Trump to power and his subsequent abandoning of the TPP as a setback. With the rapid rise of Asian nations like China, India, Japan and others the legitimacy of free trade is far from ruining in this part of the world. The nation-states in the region are readily accepting the benefits of free trade agreements and have been duly entering into bilateral if not multilateral agreements. The remaining eleven in the TPP appears to be hinting towards moving ahead with a strategy sans America. Following the US withdrawal, the Australian Prime Minister, Malcolm Turnbull stated that demise of the US is undoubtedly a great loss but there cannot be a question of walking away. Although TPP in its original form is impossible to kick-off without the US, the remaining countries might work out a deal on fairly similar lines. On the other hand a major initiative in Asia that has been seen by many as an answer to the TPP is the Regional Comprehensive Economic Partnership (RCEP) – a multilateral deal that anyways excludes the US. RCEP is comprised of the ten ASEAN (Association for South East Asian Nations) members, India, China, Australia, South Korea, Japan and New Zealand. Thus the US withdrawal is not expected to disenchant the Asians in terms of free trade.
The greatest probable beneficiary after the US withdrawal from the TPP appears to be China. If Trump is to stick to his strategy of withdrawing from the world, China perhaps would be left back with even greater leverage in the South China Sea. Although there have been no updates regarding the bilateral agreements that US holds with the nations in the Asia Pacific region, the withdrawal from the multilateral TPP is obvious to run optimisms across Chinese policy circles for the time being. On the contrary the greatest setback from a failed TPP appears to be faced by Japan. In addition to all the economic benefits that were expected by Japan, the country was particularly interested in the project so as to set up a counter against rising Chinese influence. Although Japan is attempting to boost its trade with China, it had always wanted to set the rules of the game rather being the way around. Among other things, the setting up of the Asian Infrastructure Investment Bank (AIIB) under the aegis of China poses a threat to the Japan led Asian Development Bank (ADB) and Japan saw in TPP the opportunity to stay ahead in the game of Asian diplomacy. As far as India is concerned the ill effects of the US withdrawal from the TPP appears to be at bay since India anyways was not a member and direct beneficiary of the project. On contrary India might hope for some indirect gains with TPP becoming less appealing vis-à-vis the RCEP, of which India is a member.
( The writer is Doctoral Fellow Department of International Relations South Asian University (A SAARC Initiative)Contributing Author: Eurasia Review (An initiative of Buzz Future LLC, Oregaon, U.S.A.)