Analysts fear that economic instability might arrive in the United States after US President Donald Trump announced he could end the TransPacific Partnership (TPP) established in Asia where Australia economies could suffer as the US plays its hand against China. The latter is Australia’s biggest trading partner with exports of over $100bn.
According to Australian Fair Trade and Investment Network Convenor Patricia Ranald, the current US President is using trade agreements to urge countries to the US’ interests. However, the cancellation of the Transpacific Partnership is a counter-action as the deal has greatly benefitted the United States and “reduced foreign government barriers” for the American National Association of Manufacturers to place stakes in Asia where they could establish better market share.
The TPP had helped reduce fee barriers that exist between countries involved in the agreement and allows free trade between countries through pre-determined agreements on rules regarding import and export of goods. The disappearance of the TPP would mean China would have to pick up the slack. Unfortunately, China’s sluggish economy and immense red tape may not play to its advantage. Once the TPP disappears, so will the United States.