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Not Trans, not Pacific, not Partnership

Posted By on November 28, 2016 @ 06:00

Image courtesy of Flickr user harmishhk.


Vale the Trans-Pacific Partnership.

The TPP has shattered, or sunk, or just slipped away. The symbolism is a US retreat from Asia. Donald Trump is changing the way America’s substance is weighed by the region. The TPP was agreed and signed, but instead of ratification, it’s cast off to rot. Trump’s revolution rolls.

In the power movement game, most change is incremental at the margins. On rare days, though, the centre goes, like the collapse of a great glacier. Suddenly the landscape is different. It’s not just wars that reset the balance of power. Failures of will and renunciation of purpose do the same.

Trump has launched Amexit from Asia. Farewell the US—at least for the next four years—as the creator of globalisation and the champion of liberal internationalism. President Trump has no need of Asia’s attempt at understandings and institutions, any more than he wants the TPP.

The Trump message to Asia is that America isn’t interested in writing or policing the rules and making the diplomatic weather (or the climate change weather).

A doyen of Oz pundits, Paul Kelly, offers the power-shift judgement with his dark description of Trump’s ‘devastating’ TPP withdrawal:
‘This enshrines a new protectionism at the heart of US power and cancels American faith in liberal globalism. It looms as a huge geo-strategic gift to China. The TPP was the economic arm of the US “Pivot” to Asia. Trump’s decision will undermine the region’s confidence in US commitment to Asia. It’s a blow to nations seeking to work with the US in the Asia–Pacific and keen to tie US economic interests to US military interests in East Asia.’

Such pronouncements echo what America’s leadership has been saying this decade. Step forward Hillary Clinton in her Secretary of State memoir. Hillary was clear that the Pivot was all about China, linked to ‘an historic transfer of relative wealth and economic power from West to East’.

As the economic centrepiece of the Pivot, Hillary wrote, the TPP was ‘a strategic initiative that would strengthen the position of the US in Asia’.

Clinton expressed in one sentence the reason why Japan was in the TPP and China wasn’t: ‘The TPP became the signature economic pillar of our strategy in Asia, demonstrating the benefits of a rules-based order and greater cooperation with the US.’ Ah, those rules again.

Hillary, of course, ditched the TPP in her run for president because many Democrats hate the deal as much as Trump. And here we come again to the substance. This ain’t just about The Donald.

Trump is the agent and expression of a big shift moment because he channels beliefs that speak to many Americans. That’s what elections do; countries decide to change.

Like many others, Australia has been emoting about this crunch moment as it loomed. See Malcolm Turnbull’s June speech marking the 10th anniversary of the US Studies Centre in Sydney: ‘A successful TPP will entrench the US as the strong, credible and enduring guarantor of the rules-based order in our region.’

The fear residing on the reverse side of that statement is the belief that a US which kills the TPP isn’t willing to do duty as Asia’s strong, credible and enduring guarantor. The US is still strong, but maybe it’s no longer interested in the task.

The TPP was Asian rule-writing and grand strategy performed in trade costume. Trump has just stripped and streaked from the stadium, leaving the game to China and its trade vision—the Regional Comprehensive Economic Partnership (RCEP).

The view that America loses and China wins has been given a dollar dimension by the US President’s Council of Economic Advisers, which looked at China–Japan goods exports if RCEP is born and TPP dies:

  • China likely would see substantial tariff cuts when selling to Japan, with typical reductions of over 5% and many tariffs cut by more than 10%. The average tariff on goods covered by RCEP would likely be less than half the average rate faced by the same goods if exported from the US.

  • 35 industries in the US which sell a combined $5.3 billion in goods exports to Japan a year would see an erosion of their market access to Japan relative to Chinese firms due to tariff cuts under RCEP. Those US industries include 162,000 business establishments and employ nearly 5 million workers nationwide.

  • 78 US industries that each export over $1 billion a year in goods to TPP partners and employ nearly 12 million workers in 360,000 business establishments nationwide would fail to see improved market access if TPP is not passed. Further, the rules of the road in Asia formed in the absence of TPP could substantially disadvantage US firms and workers in these industries.

  • The lost opportunities to increase growth and productivity in the US economy are substantial if TPP isn’t passed. This would also prevent the US from helping to shape trade in Asia to adhere to high standards and US values.


To summarise the Amexit effect expressed by the President’s Economic Council, this is a retreat from ‘the rules of the road in Asia’, from ‘high standards and US values’. Using Voltaire’s formulation on the Holy Roman Empire (neither Holy, nor Roman, nor Empire), the TPP becomes neither Trans, nor Pacific, nor Partnership.


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[1] shattered: http://uk.reuters.com/article/uk-usa-trump-tpp-idUKKBN13H23P

[2] sunk: http://www.nytimes.com/2016/11/20/business/international/apec-trade-china-obama-trump-tpp-trans-pacific-partnership.html

[3] slipped away: http://www.nytimes.com/interactive/2016/business/tpp-explained-what-is-trans-pacific-partnership.html

[4] retreat: http://www.nytimes.com/2016/11/21/opinion/a-retreat-from-tpp-would-empower-china.html?_r=0

[5] Amexit: https://www.aspistrategist.org.au/pivot-trumped-amexit-looms/

[6] power-shift judgement: http://www.theaustralian.com.au/opinion/columnists/paul-kelly/a-protectionist-isolated-us-will-put-the-world-on-notice/news-story/ddccb785e2d56af3f1e72b517be67975

[7] memoir: https://www.amazon.com/Hard-Choices-Hillary-Rodham-Clinton/dp/1476751447

[8] all about China: https://www.aspistrategist.org.au/hillarys-pivot-posse-and-china-as-wild-west-desperado/

[9] emoting about this crunch moment: https://www.dpmc.gov.au/news-centre/domestic-policy/business-economic-diplomacy-our-region

[10] speech: https://www.liberal.org.au/latest-news/2016/06/09/american-australian-association-us-studies-centre-10th-anniversary-dinner

[11] performed in trade costume: https://www.lowyinstitute.org/the-interpreter/us-v-china-trade-recipes-asia

[12] Council of Economic Advisers: https://www.whitehouse.gov/sites/default/files/page/files/201611_cost_of_tpp_delay_issue_brief.pdf