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Tuesday, April 17, 2018

The expert described the US withdrawal from the TRANS-Pacific partnership “courageous”


One of the first decrees as President, Donald trump has confirmed the withdrawal of the U.S. from the TRANS-Pacific partnership (TPP), which is actively promoted by the previous administration of the White house and was signed in February 2016. The agreement envisages the establishment of a zone free of duty-free trade between the 12 countries, which together produce 40% of world GDP: USA, Canada, Mexico, Peru, Chile, Japan, Malaysia, Brunei, Singapore, Vietnam, Australia and New Zealand. However, the new American President put an end to the efforts of his predecessor, as plans to impose restrictions against Asian imports, and return to the U.S. “runaway” from high taxes of production and to increase the number of jobs in the country. Experts of “MK” in different appreciated the importance of this decision for the world economy, the US and Russia.


photo: en.wikipedia.org

It is the rejection of world leadership in trade

Alexey PORTANSKY, Professor of the faculty of world economy and international Affairs NRU HSE, leading research fellow, IMEMO ran:

— The emergence of the so-called interregional trade agreements, including the TRANS-Pacific partnership, was caused by objective circumstances and 90% motivated by economic reasons. The fact that in the XXI century there is a need to accelerate the generation of trade rules between countries, and this task, in particular, could solve the interregional Association. However, the last White house administration, which promoted the TPP project, there were political reasons. Former President Barack Obama and former us Secretary of state John Kerry have repeatedly stated that we cannot allow any other power, namely China, dictated the rules of trade in such vast region as Asia-Pacific. Thus a mistake to assume that the TPP project was purely American: the original version was signed by Chile, Brunei, New Zealand and Singapore in 2005, the USA together with the other participants joined him in 2008. However, without the participation of the States the existence of the TRANS-Pacific partnership would be problematic: the document says that the agreement enters into force it must be ratified by a minimum of 5 countries and they should account for 85% of total GDP. But the project is not buried completely, and there are at least two ways to save: reformat or move to a system of bilateral agreements between participants.

In General, the solution trump to withdraw from the agreement is unusual for the US, which throughout the postwar period were the leaders of liberalization and globalization. Now it turns out that America is ready to abandon leadership position in the world economy and trade. This obviously displeases a significant part of the political and financial elite of the country. We can assume that the trump and his closest associates now do not fully understand the consequences of withdrawal from the TTP. If in the future Washington will consider its position on this matter, the consequences for the world economy and trade can be very serious.

Meanwhile, this act of the US forces Russia to think again about its role and place in international trade in connection with the emergence of new global formats. Russia has two options — to join some of the existing interregional partnerships or create their own. I believe that the most acceptable is the cooperation with the regional Comprehensive economic partnership (VREP), producing about 40% of global GDP, where the US is not involved, and the leader is China.

An example of effective assistance to domestic producers

Nikita KRICHEVSKY, doctor of Economics:

— Since the agreement on the TRANS-Pacific partnership has not entered into force without the participation of the United States did not join for the economies of countries involved there will change nothing: they are the same as before, will have to pay customs duties. USA is the largest market for sales of consumer products in the world, and the other 11 countries signed the agreement in order to penetrate this market. But Donald trump decided that for America duty-free import of goods unprofitable, and he is absolutely right. The new American President has made a courageous act, having made the decision to withdraw from the TPP. Not by chance, he surrounded himself with companions in the face of successful businessmen-billionaires, who are immune to persuasion and bribes from lobbyists for the industrial sector, the enterprises which have long passed for the United States. Trump understands that the initiatives of Bush and Obama, to promote trade partnerships, have caused great damage to America, and were washing jobs and bared the country’s budget. Let Me Remind You, George. Bush signed a law that profits of American companies in their enterprises outside of the US, the us is not taxed. Therefore, the United States has closed many businesses with thousands of jobs, for example, has led to the bankruptcy of an entire city — Detroit.

Trump promises to reduce taxes, to return production to the USA and provide jobs, and change the structure of production in order to ensure the flow of funds into the national economy.

For Russia, the United States ‘ decision to exit the TPP is a good example simultaneously, effective assistance to domestic producers. Since the US can’t do anything with the dollar, they decided to “play” with the protectionism. But we can’t afford it, as are members of the WTO. On the other hand, we can influence the protectionist barriers against the Russian economy at the expense of the ruble. If we dramatically reduce the rate, then make it unprofitable to import products from other countries. But now the ruble is strong, and at the rate of 60 rubles per dollar is no shortage of imports. In addition, the difference in rates in our country earn the largest financial organizations, and this state of Affairs is hardly something that can change.

source

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