US President Donald Trump has signed executive orders withdrawing America from the Trans-Pacific Partnership (TPP) trade deal and stopping the federal government from hiring any more workers.
Why is this so?
- Mr Trump, who has previously argued the agreement would harm the US economy, said the order was a “great thing for the American worker”.
- Mr Trump, who wants to boost US manufacturing, said he would seek unilateral trade deals with countries that wouldallow the US to quickly terminate them in 30 days “if somebody misbehaves”.
- “We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of
What does this mean?
- The destruction of an accord intended to counter the power of China in the Asia Pacific region.
- Decreased integration between economies and decreased amount of trade flows in an economy
- As the US is the major economic powerhouse within the deal, it potentially means that the TPP is dead
- Opposition Leader Bill Shorten has pronounced the TPP as “dead in the water”, claiming the Government’s pursuit of the deal is “a waste of time
What does this mean for Australia?
Despite the decrease in economic trade and therefore potential benefits, Australia’s Trade Minister Steve Ciobo said the Federal Government was willing to work with the other 10 participating countries to find a way forward for the TPP.
“If it comes to pass that we need to make small changes in order to capture the benefits of the TPP and not have the United States as part of it, well then, so be it,” he said.
But he agreed access to the US market was an incentive for countries to sign up in the first place.