The United States has undergone a major overhaul of its trade agreements. From the North American Free Trade Agreement (NAFTA) to The Trans-Pacific Partnership (TTP), lately the administration has put each one under the proverbial microscope. Ultimately they are hoping to scrap those which do not provide benefit and rework those that have the potential. While the U.S threatens to pull out, Europe and China looking to step into America’s place as the key trade leader of the world.
The U.S pulling out of TPP left a deficit in the agreement, one that The E.U is seeing as an opportunity according to Trade Commissioner Cecilia Malmström. She reiterated that when they pulled out it forced other countries to seek options elsewhere. Speaking to Reuters she said, “Other countries feel that they need to look out for new friends and other allies, so yes, it has increased interest in cooperation with Europe and with others.”
With the notable absence of the U.S in TPP, the other participating countries will increase their imports from the apparel and footwear sector in Europe. Europe is renowned for its fashion and footwear so if they can work out a deal with TPP they will benefit greatly. All things considered, the United States will lose significantly. American exports that would usually go to participating countries will now fall in the E.U’s lap.
Since TPP’s death, China has been hard at work on the Association of Southeast Asian Nations (ASEAN). Sourcing Journal Online reports this would include free trade between: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, China, India, Japan, South Korea, New Zealand. Their goal is not only to allow imports from the aforementioned Asian counties to flow freely through their borders. But, they also hope to receive materials and resources sans-tariffs that they will use in their own manufactured goods. In addition, China is also in talks with Mexican government to establish a China-Mexico trade deal.
While the U.S is retreating into itself and potentially reducing its free-trade with other nations, the rest of the world seems to be doing the opposite. The restructure of the TPP and ASEAN agreements are the ones making headlines. Although, there are also many bi-lateral agreements in the works as well. That being said, it seems that this restructuring of trade around the world may see America step down as trade leader and see another nation or bloc take its place.