Nullifying the Trans Pacific Partnership would be an “inauguration gift to China at the expense of rapidly developing countries like Vietnam,” said Freightos CEO, Zvi Schreiber. He joins a growing list of industry leaders voicing concern that scuttling the deal would put the U.S. at a disadvantage, while empowering China, in direct contradiction to president elect Donald Trump’s campaign promise to, “make America great again.”
Below are his comments, which draw attention to the benefits of an American-led trade regime in the Pacific region, and the damage that protectionism and abdication of responsibility could wreak on both America’s economy, and its hegemonic position in the international system:
Yesterday President-elect Trump promised to nullify the Trans-Pacific Partnership on his first day in office. You could call this Trump’s inauguration gift to China at the expense of rapidly developing countries like Vietnam. Free trade agreements and shifting labor costs continue to move manufacturing and exports from China to Southeast Asian countries like Vietnam. Southeast Asia-US trade has been helped by cost-effective labor and low-cost transparent freight and the now shattered promise of free trade.
Instead of improving global trade, cancelling TPP will hinder shifting manufacturing patterns, bolster China’s export industry, and hinder the continuation of the rapid growth of Vietnam’s economy with GDP multiplying 5X since 2000. Vietnam and other countries that export to the US were not destined to be the TPP’s only benefactor; US exports have continued to grow, with exports to Vietnam exploding by 473% in the last decade.
Transparent trade, from sourcing to duties to freight shipping, is the cornerstone of the global economy. With over $1.2 trillion dollars of goods imported to the US from the 10 non-North American signatories in the past five years, the ultimate price for canceling the TPP will be paid by US consumers who will face higher prices.
Even within the US, not implementing the TPP will do more harm than good. US manufacturers may find it easier to compete domestically, but they will find it harder to export (nearly $900 billion dollars of goods were exported to non-North American TPP signatories in the past five years).
The one definite benefactor of cancelling the potential free trade agreement? The People’s Republic of China.Like This Post