Trump election affects mega-regional negotiations including TTIP, TPP and RCEP

In September, EU officials recognized that the negotiations on the EU–U.S. Transatlantic Trade and Investment Partnership (TTIP) were unlikely to be concluded before the end of U.S. President Barack Obama’s mandate. After November 9, when protectionist Republican candidate Donald Trump won the U.S. presidential elections, the future of TTIP negotiations became even less clear. EU Trade Commissioner Cecilia Malmström said on November 11: “TTIP will probably be in the freezer for quite some time and then what will happen when it is defrosted, I think we will need to wait and see.”

While Trump’s position on TTIP may be unclear, he strongly campaigned against existing multilateral trade deals, including the Trans-Pacific Partnership (TPP) signed earlier this year and even the North American Free Trade Agreement (NAFTA), in force since 1994. On November 22, the President-elect announced that among his actions on his first day in office (January 20, 2017) would be the full withdrawal of the United States from the TPP, characterizing it as “a potential disaster” for the country. “Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back onto American shores,” he added.

In response, Japanese Prime Minister Shinzo Abe stated that “the TPP would be meaningless without the United States.” The TPP—concluded by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam—includes a clause preventing entry into force without U.S. ratification. Peruvian Trade Minister Eduardo Ferreyros proposed new talks: “We can modify that clause and also take advantage to modify other clauses that might be uncomfortable for us.” Australian Trade Minister Steven Ciobo also said that countries could push ahead by amending the agreement and possibly adding new members.

Analysts see in the U.S. withdrawal from the TPP an opportunity for China to assume leadership in Asia-Pacific trade and investment negotiations. China is negotiating the Free Trade Area of the Asia Pacific (FTAAP) and the Regional Comprehensive Economic Partnership (RCEP). The latter excludes the United States, but includes Australia, India, Japan, New Zealand and South Korea, as well as the ten member states of the Association of Southeast Asian Nations (ASEAN). During the Asia–Pacific Economic Cooperation (APEC) summit in Peru on November 19 and 20, Tan Jian, a senior Chinese delegate, said that Chile, Peru and other countries now intend to join RCEP negotiations, and that current negotiating partners aim at concluding the deal as soon as possible to counter protectionism.

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