Despite the best efforts of US President Donald Trump to stop the Trans-Pacific Partnership (TPP) from going ahead after he pulled out of the deal, it has already picked up seven signatories and grows ever closer to other countries adopting it.
Trump has long railed against the TPP, which he described as a ‘job killer.’ However, it has a lot of support elsewhere, and Trump’s comments have yet to dampen the chances of the deal going ahead in some form.
Given that he has sought to rip up any deal signed off by his predecessor, Barack Obama, Trump’s actions regarding the TPP are no surprise. He also took issue with the North American Free Trade Agreement (NAFTA) between the US, Mexico and Canada but has since renegotiated separate agreements with each country. This suggests that the US could be more amenable to the TPP upon the removal of some of the more contentious aspects.
There are now 11 countries backing the newest version of the deal, and they are keeping a place at the table for the US if it decides to return to talks or discuss an amended format.
Australia was the sixth country to ratify the deal in its own parliament, and Vietnam became the seventh this week.
This means that over half of the deal’s supporters have officially passed it into their own laws. It should receive formal confirmation as a trade agreement before the end of 2018.
Nguyen Van Giau, who heads Vietnam’s National Assembly External Relations Department, said: ‘This is an important political decision, affirming our country’s active role in international integration.’
The Southeast Asian nation has been growing its GDP in recent years, especially on the back of an increasing focus on strong exports, many of which included technological products that shipped to the US while it was still a part of the TPP.
Trump partially distanced his country from the deal due to manufacturing job growth in Vietnam that he wanted to see in the US. He said that the TPP was a ‘death blow for American manufacturing.’
Obama had previously labeled the deal as a ‘gold standard’ for trade agreements and said that it would allow other nations to form better protection against the burgeoning strength of China. However, given that the nations that have ratified it will no longer have access to the US market in the manner originally proposed, how they plan to succeed under the deal remains unclear.
Lower tariffs will be one of the key exponents of the latest deal, now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and countries such as Australia are set to benefit. More open markets and a clearer trade strategy among the countries involved will also hopefully lead to stronger ties and better resistance to the lure of Chinese liquidity. Australia has been trying to combat this in recent weeks, with Prime Minister Scott Morrison railing against what he saw as Chinese encroachment into Australia’s ‘patch.’
Workers will also benefit from agreed terms of labor standards, which the deal will raise to the same code of conduct for all companies. Giau said that Vietnam will face some challenges because of this but that it is still achievable.