Bye Bye TPP

Hi Guys,

It's official, trump is gonna scrap the TPP on his very first day of office.

What do you guys think about this? I understand the fears behind the Trans-Pacific Partnership, but isn't protectionism just gonna hinder growth for the economy? Always stood by free trade but with Trump scraping the TPP, it seems like Beijing is gonna step in to front a new free trade agreement, taking the lead in APAC.

 
Best Response

If Trump scraps TPP, over the short-term, a small minority of the US population will benefit, whilst a large majority will suffer; overall economic growth will be hindered. Over the long-term, everyone will suffer.

However, it is critical to remember that single policy decisions do not occur in a vacuum. It is completely feasible that his other policy decisions will increase economic growth, which will outweigh the damage caused by scrapping TPP. Although, that does not change the fact that economic growth would be greater if TPP were ratified.

In terms of foreign policy, when taking into account China's growing influence and power (Phillipines, etc.), if they choose to take leadership and fill the void left by the US, it would not be significantly bad for the US. In such a scenario, it is probable that everyone else (including China) will see economic benefits, to the exclusion of the US.

 

Thanks for the reply!

That's a really good analysis of the situation! I am still doubtful on the prospects of his other policy decisions leading to the economic growth he's touting to bring about though. But this call to scrap the TPP seems like a sound one...for now. However, It's his stance on environmental issues that worries me the most.

 

It seems like there are good arguments both for and against TPP from very knowledgeable people. I have considered the partnership and still do not have a strong opinion either way, mainly because it's very complex and difficult to predict the outcomes years down the road. My initial feeling is that the US should look into making partnerships with these countries in a one on one manner...why not use our leverage as a global leader?

I'm not surprised SSits has already decided all the outcomes from this partnership for all the various players. Then again, SSits must know more about macroeconomics and international trade than Obama, since he knows absolutely nothing about these topics

 

I was a supporter of TPP, so I'm not super thrilled by this announcement. With that said, it's not the TPP or bust. At least according to Trump, he's going to pursue bilateral (that is, nation to nation) trade agreements rather than the all-encompassing TPP. However, I am bullish on Trump's/Ryan's tax, energy, and capital repatriation plans in terms of their positive impacts on the economy. We'll just have to see what the GOP can do with its thin margin in the U.S. Senate.

Array
 

To be honest this agreement had the potential to greatly benefit the Us in the long term. When designed, the US exports negotiators had in mind were those with higher added value and seen as competitive - Technology, Intellectual Property, Services and even some select agricultural goods. And the US managed to include (at least bring to the discussion table) a lot of topics which may be seen as problems by other nations in the agreement, such as environmental/pollution concerns, human rights and something about freedom to join unions. This would probably be much more of a problem for China, Vietnam etc than the US anyway.

I don't really see any benefits in scrapping the agreement altogether; The country is not a self-sufficient island, it was not designed to be one (actually the most approximate thing to a self-sufficient is North Korea with their lunatic "Juche"ideology). Many US companies obtain a significant part of their revenues abroad, and you just can't ignore that the abundance of cheap stuff in every store is due to, well, international trade (hi there Made in China).

I'm not an American though; Maybe you guys may see some silver lining about this. But writing as a citizen of a country which decided in the past to walk away from trade agreements, impose high import duties and focus on "National Goods First" (all failed policies, with results felt to this day - all bad) I would say this is a bad call.

By the way - Negotiating bilateral agreements is not as easy as it seems. This possibility is actually being sold as being easy and "obvious" simply because well, the US is the US. Good luck negotiating with individual countries which probably see any proposal of agreements with the US as nocive and harmful.

 

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