President-elect Donald Trump has announced that the US will quit the Trans-Pacific Partnership (TPP) trade deal on his first day in the White House.
The TPP is essentially a Free Trade Area and the trade deal was signed by 12 countries. The 12 countries among which TPP has been agreed upon include – United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. These countries are home to 800 million people and account for 40% of global trade. The agreement aims to liberalise trade in nearly all goods and services by eliminating tariff and non-tariff barriers. This will lead to the creation of a unified market like in Europe which will help different countries in a different manner.
Interestingly, at present, the main driving force of TPP is the United States. The TPP is an economic arm of United States’ Rebalance to Asia Policy. The decision of US to quit TPP will be a big blow to many parts of emerging Asia. Japanese Prime Minister Shinzo Abe who is a vocal supporter of TPP has warned that the trade deal would become completely meaningless without the participation of US.