Is the USA creating an Economic Void?
The United States of America, the pulling out Expert
Just typing the words “US pulling out of…” in the google search bar will bring up many suggestions which include and are not limited to.
USA withdrawal from UNESCO
USA pulls out from the Iran Nuclear Deal
USA pulls out from the Paris agreement on climate change mitigation
USA pulls out of the HRC citing bias against Israel
Many more such examples are constantly turning up every day in the news. One such pull out move is highlighted more than the others, the United States of America pulling out of the Trans-Pacific Partnership. It seems like this time the USA has outdone itself in causing internal as well as external turmoil to its economic advantages thus leading to the creation of a void.
Trans-Pacific Partnership (TPP)
TPP was the center-piece of President Obama’s strategic pivot to Asia. Before President Donald J. Trump withdrew the United States in 2017, the TPP was set to become the world’s largest free trade deal, covering 40 per cent of the global economy.
https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp
We must have all heard these words “Only run with those you can trust”, soon the nations part of the TPP were going to realize the true meaning of these words.
In 2017 when President Trump Pulled out of the Trans-Pacific Partnership, the remaining 11 countries came together to form a Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
What led to the TPP being formed?
The impetus for what became the TPP was a 2005 trade agreement between a small group of Pacific Rim countries comprising Brunei, Chile, New Zealand, and Singapore. In 2008, President George W. Bush announced that the United States would begin trade talks with this group, leading Australia, Vietnam, and Peru to join. As the talks proceeded, the group expanded to include Canada, Japan, Malaysia, and Mexico — twelve countries in all.
Upon taking office in 2009, Obama continued the talks. In 2011, Secretary of State Hillary Clinton framed the TPP as the center-piece of the United States’ strategic pivot to the Asia-Pacific region. After nineteen official rounds of negotiations and many more separate meetings, the participating countries came to an agreement in October 2015 and signed the pact in early 2016.
These negotiations overcame significant political hurdles, with countries agreeing to difficult reforms of their economies. For instance, Japan’s powerful farming lobby resisted the reduction of tariffs on agricultural goods, while the country agreed to reduce barriers to its auto market. Canada agreed to allow more foreign access to its heavily protected dairy market, while Brunei, Malaysia and Vietnam promised to reform their labour laws, and the United States compromised on some of its demands for stricter patent protection for pharmaceuticals.
However, the deal was never ratified by the U.S. Congress, as it became a target of both Republican and Democratic candidates during the 2016 presidential campaign. Trump formally withdrew from the TPP on his first full day in office, in January 2017.
Courtesy: https://www.cfr.org/backgrounder/what-trans-pacific-partnership-tpp
Filling a Void
With the constant withdrawal of the United States of America from important agreements, it is necessary to fill this void and it is not really a surprise that the most plausible option is China.
China is now embracing in a much more full-throated and explicit way the sense that it is — its moment has arrived. And the leader, Xi Jinping, says this much. He says — in a big speech in October, he said that a new era is here in which China will now move closer to the center-stage in the world. He said we now represent what he called the Chinese solution, (speaking Chinese) which means an alternative to Western democracy. And those are words that they would never have said as recently as three years ago.
The United States, under the budget that the Trump administration has proposed for 2018, would cut foreign aid by about 42 per cent. China has said in fact that it’s expanding its foreign aid around the world. They’ve embarked on a project called The Belt and Road Initiative, which is essentially a play on the Silk Road of the old days where they’re going to build bridges and railways — and it’s a vast project. It’s about seven times the size of what the Marshall Plan was in 1947, which was the U.S. project to rebuild Europe. So, there’s this very clear sense that into the void created by America’s return, America’s withdrawal to ‘America First’ is the possibility for a Chinese redemption and a new era of Chinese leadership.
The Regional Comprehensive Economic Partnership, the RCEP — is a terrible acronym, but it encopasses more than a dozen countries. It will be, by population, the largest trade bloc in the world. It excludes the United States. It was designed explicitly by China as an alternative to the Trans-Pacific Partnership, the TPP. China really looked at the TPP as a threat to its future. And so, when the United States pulled out of the TPP, at the time, there was a Chinese military general who gave a speech — internal speech to party officials in which he said: ‘Look, publicly, we’re going to be very quiet about this. We’re not going to talk much about it. We’re going to continue to say that Trump is a threat to China. But the truth is Trump has given us a great gift. By pulling out of TPP, he has cleared the way for us’. And the words he used was that as the United States retreats, China shows up. And if the RCEP, the Chinese trade pact, is approved later this year as its projected to be, it will be a new era in trade in Asia because the largest trade bloc in the region will be one that is governed, in effect, by China and does not include the United States.
The above examples clearly prove that China would be the best competitor of USA who can fill the void being created by the USA but it shall always be true that the USA shall be the world biggest Superpower be it because of its work as a mediator in most conflicts or its strong strategical and economic advancement but soon it shall have many competitors which may include India, China, Russia and many others to come.
