Donald Trump delivered a YouTube message on Monday, where he mentioned pulling out the Trans-Pacific Partnership, which was a signature trade deal of Barack Obama, which linked countries that surround the Pacific Rim. This happened on Obama’s first day in office. Prior to it, there was a meeting in Peru amongst international leaders. This hinted towards what would happen next.
The Trans-Pacific Partnership would not survive without the United States. This does not mean that the international trade negotiations will remain quiet. The United States’ major trading partners are in preparation for the next agreement. The next agreement could possibly give countries that were excluded from the previous partnership (Russia, China, etc.) an opportunity to join, if they were to improve their trade practices. They could also negotiate a better trade pact for their economies.
During the summit that was held in Peru, this past weekend, the world leaders focused on two agreements that are being negotiated by China, outside of the Trans-Pacific. With the partnership in motion, China was pushing for its own Regional Comprehensive Economic Partnership. This deal was negotiated amongst 16 Asian countries, and it is near completion. The other agreement is the Free Trade Area of the Asia-Pacific, which connects with 21 countries around the Pacific Rim, including Russia, Indonesia, Chile, Peru, Mexico, Canada, the United States, and China.
The United States was able to persuade their Pacific trading partners from agreeing with the Free Trade agreement, over the past few years. Instead, leaders went with the Trans-Pacific agreement. With countries expecting the Trans-Pacific to no longer exist, there are more countries going along with the Free Trade agreement. Once Trump stated that he would pull America out of the Trans-Pacific agreement, Shinzo Abe, Prime Minister of Japan said the agreement would serve no purpose without America.