Just as he vowed he would, US President Donald Trump effectively
killed off the Trans-Pacific Partnership (TPP) trade bloc on his first
day in office, as part of his aggressive “America First” agenda to boost
the US economy at the expense of the rest of the world.
Within
hours of assuming power, Trump’s White House web site not only affirmed
his intention to withdraw from the TPP. It placed that decision
side-by-side with a demand for the renegotiation of the North American
Free Trade Agreement (NAFTA) with Canada and Mexico, adding to the
consternation in capitals around the Asia-Pacific, especially in Tokyo,
Mexico City, Ottawa and Canberra.
As one of the Trump
administration’s six highest priorities, alongside “An America First
Foreign Policy” and “Making Our Military Strong Again,” the web site
declared that the United States government would pursue a course of
“rejecting and reworking failed trade deals” that had allegedly produced
“a mounting trade deficit and a devastated manufacturing base.”
“This
strategy starts by withdrawing from the Trans-Pacific Partnership and
making certain that any new trade deals are in the interests of American
workers. President Trump is committed to renegotiating NAFTA. If our
partners refuse a renegotiation that gives American workers a fair deal,
then the President will give notice of the United States’ intent to
withdraw from NAFTA.”
While cynically couched in terms of a “fair
deal” for American workers, this is a nakedly nationalist and
protectionist agenda that seeks to halt the protracted decline of US
capitalism, bolster corporate profits and further enrich the American
financial elite. It goes hand in hand with threats of crippling tariffs,
such as 45 percent penalties on Chinese imports that could trigger a
global trade war, with devastating results for workers in America and
all around the world.
This is not a retreat into US isolationism
but a dramatic ramping up of the offensive, already commenced by the
Obama administration, to reassert US hegemony throughout the
Asia-Pacific over its economic and strategic rivals, notably China and
Japan. The 12-country TPP itself was never a free trade agreement. It
was a US-led economic bloc directed especially at undermining China,
which was excluded from the TPP, and ensuring the unrestricted
plundering of the region’s resources and markets by US financial, media,
pharmaceutical and other transnational giants.
The TPP was a key
aspect of Obama’s “pivot to Asia”—a concerted military, diplomatic and
economic drive to encircle and dominate over China. As Obama stated
repeatedly, the purpose was to ensure that the US, not China, “writes
the rules of the road for trade in the 21st century.” As part of this
quest, the TPP sought to cement alliances across the region,
particularly with Japan and Australia, Washington’s two key military
allies, both of which hoped to gain greater access to US and other TPP
markets.
By jettisoning the TPP and targeting the two decade-old
NAFTA, Trump has made it clear his administration will not work within
the old, post-war framework that sought to avoid the outright trade wars
that erupted during the 1930s, collapsed world trade and set the stage
for World War II.
The TPP agreement states that it can go ahead
only if at least six of its 12 original members ratify the deal, and if
those six countries represent 85 percent of the combined gross domestic
product (GDP) of all 12 countries. That means the deal cannot come into
force if the US fails to ratify it, because the US accounts for more
than 55 percent of the total GDP.
There was dismay in ruling
circles throughout the region, especially in Japan, where Prime Minister
Shinzo Abe has banked on the TPP as a major pillar of his “Abenomics”
program to end the country’s prolonged stagnation. Japan’s auto and
corporate giants have also used NAFTA to establish low-wage operations
in Mexico as means of gaining entry to US markets. About 1,000 Japanese
companies operate in Mexico today, spearheaded by Toyota, Nissan and
Honda, which utilise their factories in Mexico as exporting hubs to the
US and Canada.
In a last-ditch effort to avert a TPP pull-out by
Trump, Abe last month secured the Japanese parliament’s formal
ratification of the treaty, even though Trump had made his intentions
very clear. Last week, Abe also conducted a quick-fire trip to the
Philippines, Australia, Indonesia and Vietnam in an effort to shore up
Japan’s position.
While in Australia, Abe and his Australian
counterpart, Malcolm Turnbull reaffirmed their support for the TPP,
issuing a joint statement that it remained an indispensable priority
because of its “significant economic and strategic benefits.” Even
though Abe and Turnbull also pledged their commitment to their respective military alliances with the United States, Trump has bluntly dashed their plea to retain the TPP.
According to yesterday’s Yomiuri Shimbun,
the Japanese government now has been forced to review its trade policy.
Japan Chamber of Commerce and Industry chairman Akio Mimura released a
statement condemning Trump’s “America first” policy, saying it would
promote the spread of protectionism, “significantly disrupting the
system of open trade that has supported the growth of the global
economy.”
The nervousness is also palpable in Australia’s corporate and media elite, for whom Trump’s inauguration message
that “the whole world must be made to fear us” not only points to trade
wars but escalates the danger of military conflict between the US, on
which Canberra depends militarily, and China, Australia’s largest export
market.
Today’s Australian Financial Review editorial
described Trump’s declarations as “chilling for the future of world
trade.” Turnbull’s government is still saying it will go “flat out” to
rescue the TPP, or try to concoct a “Plan B” treaty without the US.
Trade Minister Steve Ciobo met officials from Japan, Canada, Mexico,
Singapore and New Zealand last week in Switzerland to discuss ways to
“take the TPP forward” without the US.
The Chinese regime’s reaction to Trump’s statements was muted. The normally strident Global Times,
a state-owned media outlet, said negotiations around China’s rival to
the TPP, the Regional Comprehensive Economic Partnership (RCEP), “could
finally see some momentum” but “no one is celebrating yet as countries,
including China, still try to grasp specific policies and actions the US
might take going forward.”
The 16-nation RCEP would include
countries in the Association of Southeast Asian Nations, China,
Australia, India, Japan, South Korea and New Zealand, but not the US.
High-ranking Japanese and Chinese trade officials met in Tokyo last
month to advance RCEP. If these moves continue, China will not be the
only country in Trump’s sights. Japan could find itself increasingly at
odds with Washington.
Source: WSWS
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