Examine the possible implications of US withdrawal from the Trans-Pacific Partnership (TPP). Do you agree with the view that despite of US exit, TPP can be a game-changer for Indo-pacific region? Comment.
After the withdrawal of US, TPP is now 11 members regional trade agreement. Without the US it was considered that the group will have less economic and strategic importance. The economic and geopolitical impact of the loss of the US market has certainly limited the scope of TPP. Also, US will not be able to use TPP platform to ‘counterbalance’ China in economic terms in Asia-pacific terms.
However, led by Japan and Australia, rest of the members are negotiating the future of TPP11. Though post US exit, there were changes in projected economic benefits for members, specifically for members like Vietnam and Malaysia, who would have obtained the preferential access in the US and other North American markets. However, even without the US, there is the wide scope of economic benefits for members. For example access to markets like Canada and Mexico. Also, TPP regulations may become a framework for future trade agreements
Also tough stance of US on sensitive issues like intellectual property, investor-state-dispute-rules, state-owned enterprises and labour standards can now be revisited, thus providing greater flexibilities to the members of TPP11. Post US exit, Asian powers have emerged as a prominent player in TPP. It would be the first case of a modern trade agreement formalized without the US and the EU, the traditional leaders of regional trade.
The TPP-11 could be a beginning of a new phase of alignments in global trade, steered by middle powers from Asia and America.
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