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Trans-Pacific and multilateralism

Bruno Peron, 23 March 2017

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The Trans-Pacific Partnership (TPP) is a multilateral agreement that aims at the commercial approach and business increase between countries that are on both sides of the Pacific Ocean. It is composed of twelve countries in three continents: America, Asia and Oceania; the only members in Latin America are Mexico, Peru and Chile.

Countries bathed by the waters of the Pacific Ocean have had relationships even before the official establishment of the Trans-Pacific Partnership, which occurred on 5 October 2015. The multilateral negotiations of its member countries lasted years until its formation would take shape so recently as in 2015. However, other initiatives of a “trans-Pacific” reach also deserve emphasis, namely the Asia-Pacific Economic Cooperation (APEC), because of the participation of Latin American countries and of its favourable orientation towards commercial opening and transcontinental cooperation.

One of the great difficulties of the TPP is the insecurity of its countries regarding the opening of their commercial borders. Besides, there are countries that support more protectionist positions (such as the United States) and others where opinions about such agreement are divided (for example in Peru). Even in each country, there would be favoured businesses and others that, on the contrary, would be harmed.

It is in this sequence of uncertainties that the strongest economy of the TPP –the United States –decided to withdraw from the agreement prematurely. The TPP barely started, with its less than a year of existence, and now it has to face the harshness of the newly empowered North American president Donald Trump. Among other measures that characterise his election pledge, Trump signed a decree on 23 January 2017 that determined the withdrawal of the United States from the Trans-Pacific Partnership.

Trump, by the way, started his mandate with the tone of discontinuity in relation to the policies of his predecessor Barack Obama. The effect that is quickly felt is the cancellation of the economic and sanitary policies that, respectively, gave hands to Latin American countries and the Asian southeast, and guaranteed well-being to the poorest people in the United States through Obama Care. For Trump, Obama’s political improvements do not seem to be relevant.

Such political judgement is viable even if Trump justifies that the withdrawal of the United States from the Trans-Pacific Partnership will protect the North American workers. Trump’s vision in opposition to the multilateralism of TPP, in reality, aims at assuring competitive advantages to the business environment of the United States. It is a clear expression of defence of the national interest and of resumption of the North American protectionist values.

The political stance of the United States in the figure of Trump foresees the establishment of less multilateral agreements and more bilateral treaties. In addition, the North American government intends to review the conditions of the North American Free Trade Agreement (NAFTA), which has been in force since 1 January 1994 between Canada, the United States and Mexico. Trump demonstrates that which conservative citizens normally think about Mexico, differently from what many would prefer to listen to in their fantasies of belonging to the first world.

This and other debates about multilateral negotiations that go beyond territorial borders warm up with the dismantling of the Trans-Pacific Partnership. A possible consequence is that China, which never belonged to TPP, takes advantage of this power vacuum with initiatives such as the Regional Comprehensive Economic Partnership (RCEP). The obstacle, at this point, is how to turn China so attractive as the United States in multilateral agreements, especially for Latin America. Attempts of integration are valid as long as the great decision-makers feel comfortable.