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Luis BARRUETO is a journalist from Guatemala. Studied business and finance journalism at Aarhus University in Denmark and City University London.
Amid escalating disputes with the Trump administration over trade, Canada is seeking to pivot to Asia and is hosting talks to figure out how to move forward with the Trans-Pacific Partnership (TPP), after the US bowed out in one of President Trump's first moves in office.
The economic case for TPP remains relatively strong: while the $131 billion gains expected from the original agreement are now out of the question, the 11 remaining countries would still boost their economies by around $16.6 billion, according to an upcoming document by the Canada West Foundation (see Politico reports).
Trade in automotive products and business services would benefit the most. And countries in the Western Hemisphere, including Canada, Chile, Mexico and Peru, would face less competition from the US in TPP's Asian markets. Even smaller countries, like Vietnam, could also benefit by gaining access to larger Asian economies in the agreement, says The Economist’s Banyan.
The geopolitical case has also become more relevant: "TPP 12 ultimately aimed to create incentives for China to reform its state capitalism practices; TPP 11 can be a useful tool in deterring Trump’s protectionist policies," argues Brookings’ foreign policy expert Mireya Solis.
So far, countries have been shy in leading the new negotiation efforts. "For several members, including Singapore, Malaysia and Vietnam, a chief concern is for a revived club not to be seen as an affront to China. For Japan, in contrast, that is precisely the point — though it will never admit it in public. Its bigger concern, given its reliance on American security, is not to be seen as anti-Trump," The Economist notes.
In this context, perhaps it will be Canada’s new trade policy approaches which will offer TPP a new chance, but that remains to be seen.