It’s a ‘hard sell’ if Biden govt wants to rejoin massive trans-Pacific trade deal, says analyst
The era of trade liberalisation is over, and it will be difficult for the incoming Biden administration to re-join the massive trade deal Trans-Pacific Partnership (TPP), according to an analyst at risk consultancy Control Risks.
The TPP was a mega trade deal negotiated by former U.S. President Barack Obama and 11 other countries, which excluded China. In its original format, the deal — which was inked in 2016 — would have been the world’s largest trade agreement, covering nearly 40 per cent of the global economy.
But the TPP was widely criticized in the U.S., and never passed Congress. President Donald Trump eventually pulled the country out of the mega-trade agreement in 2017.
Dane Chamorro, a partner at Control Risks, said the “desire is probably there” among the new Biden administration to re-join the trade deal.
However, the former U.S. diplomat told CNBC on Monday: “But you have to think that politically, on both sides of the aisle, the idea right now of more trade liberalization is really not very popular.”
“I think that era has passed, on a multilateral level, I think that era has passed the United States for some period of time. I think it’s a really hard sell, if you’re a congressman or senator, regardless of what party you’re from, it’s really tough … I don’t think that’s going to be high on the list of priorities,” Chamorro added.
Trump had called for U.S. manufacturing to be brought back, mirroring a growing feeling throughout the country that international trade deals have hurt Americans’ jobs.
After the U.S. withdrawal, the remaining 11 member countries renegotiated and rebranded the deal in 2018. As a result, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — also known as TPP 11 — was born.
Former Senator Bob Corker had said at the Milken Institute Asia Summit in December that the TPP was a “missed opportunity” for the U.S. to “put a lot of pressure” on China.
The U.S. under Trump has frequently highlighted problems with Chinese business practices, such as subsidies for state-owned companies and the lack of intellectual property protection.
“It would be a significant step forward if the Biden administration can figure out a way” to rebuild an alliance like the TPP, said Corker, who was the Republican senator for Tennessee from 2007 to 2019.
Last November, China and 14 other Asia-Pacific countries signed the world’s largest trade agreement, the Regional Comprehensive Economic Partnership. Analysts said the move will further cement China’s political and economic influence in the region.