In the fast-paced news cycle, there is a tendency to forget about news stories as they age. However, this does not mean they forget about us, and sometimes, they come back to haunt us. Just over a year ago, President Trump withdrew the United States from the Trans Pacific Partnership (TPP). Essentially, this move ceded leadership on trade to other participating nations, which will produce real consequences for the American economy.
Where We Stand
Currently, the 11 participating TPP nations are working to open the marketplace, eliminating many tariffs in a $14 trillion market. However, as President Trump removed the U.S. from this agreement, they will not directly benefit from it. On the contrary, after much deliberation, Canada has decided that inclusion in the partnership will bolster their economy. Naturally, the ten other member countries agree as well. It is true that the United States, through trade with Canada via the North American Free Trade Agreement (NAFTA), will still benefit to some degree, but these slim figures will pale in comparison to the growth that they could have seen through continued membership in the agreement.
Can Anything be Done?
Despite a poor outlook, it appears that leaders will not finalize the agreement until the end of the summer. Due to this, it is both possible and ideal that the more market-oriented members of Trump’s cabinet may persuade him to rejoin the agreement. Unfortunately, however, the president’s tough view on trade makes this re-entry appear unlikely.
Though Trump vehemently opposes the deal, he often forgets the massive benefits of free trade agreements, such as NAFTA. In the two decades following this deal, cross-border investment surged from $290 billion in 1993 to $1.1 Trillion in 2016. Member states of the TPP will likely see a similar surge due to the deal. Despite the existence of obvious benefits, our anti-trade president makes it highly unlikely that the U.S. will see them.
(Image courtesy of tpp.guide)