As the Britains voted to exist the European Unions common market (which led to a spike in Google.uk searches for “What is the EU?”) and as the US trade policy is run by wishful thinkers, Asia is taking the lead today. The BBC reports [edited]:
Asia-Pacific trade deal signed by 11 nations
Eleven Asia-Pacific countries signed the trade pact formerly known as the Trans-Pacific Partnership. Although the US pulled out last year, the deal was salvaged by the remaining members, who signed it at a ceremony in the Chilean city of Santiago.
Chilean foreign minister Heraldo Munoz said the agreement was a strong signal “against protectionist pressures, in favor of a world open to trade”. The deal covers a market of nearly 500 million people, despite the US pullout. In the absence of the US, it has been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam signed the deal with covers
- tariffs reductions between member countries.
- reductions in non-tariff measures and harmonized, transparent and fair regulations
- commitments to enforce minimum labor
- commitments to enforce and environmental standards
- an Investor-State Dispute Settlement mechanism, which allows companies to sue governments when they believe a change in law has affected their profits.
President Donald Trump in his efforts to work for american workers and against special interests groups labeled the agreement “a rape of our country.”
Who are the winners and losers?
The Peterson Institute for International Economics says Malaysia, Singapore, Brunei and Vietnam will each receive a bump of more than 2% to their economy by 2030. New Zealand, Japan, Canada, Mexico, Chile and Australia will all grow by an additional 1% or less. The same study says the US could be a big loser, foregoing a boost to its Gross Domestic Product of 0.5% (worth $131bn). The US will also lose an additional $2bn because firms in member countries have an incentive to trade with each other instead of with American companies.
Unions (particularly in wealthier member countries such as Australia and Canada) say the deal could be a job killer or push down wages. Some economists have also suggested that free trade agreements are rigged by special interests, which makes their economic value far more dubious.
