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Thursday, March 28, 2024

TPP- US withdrawal and impact on global trade attitudes

On 23rd of January, the newly elected U.S. President Donald J. Trump signed an executive order about the withdrawal of United States from the Trans-Pacific Partnership. According to Mr. President, the agreement is a “disaster” and a “worse trade deal.” Noteworthy is that, signed by 12 nations in February 2016, the pact cannot take an effect without United States participation.

This withdrawal of United Stated from the Trans-Pacific Partnership (TPP) is considered as a momentum for the Regional Comprehensive Economic Partnership (RCEP). The exit of US is expected to accelerate the significant shift in the overall landscape of trading policies in the Asia Pacific.

Just like many others, the decision is expected to have a positive impact on the economic leadership position of China in the Asia-Pacific. At the time, China is undertaking its individual regional economic initiatives like One Belt One Road strategy that is playing a major role in creating a development finance institution like AIIB (Asian Infrastructure Investment Bank).

On the other hand, the ministry of finance of Kenya has also welcomed the US withdrawal from TPP. The reason for appreciation is that the duty-free exports to the US have had a huge impact on the exports and economy of Kenya. “The withdrawal from this trade agreement by Donald Trump is good news for Kenya, particularly the country’s textile industry,” said the Trade Principal Secretary of Kenya, Chris Kiptoo. At the same time, the Indonesian textile and garment producers are also looking forward to a level playing field in the United States.

Despite the positive feedback from major textile exporters, it is said that the withdrawal of US from the TPP will abandon the trade deal that was the root of Obama’s re-engagement with the Asian Nations. The supporters of the TPP are claiming that the pact was in favor of Americans as it would end up giving the lower price imported consumer goods.

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