During his first working day as the new president of the United States, Donald Trump called it a day for the Trans-Pacific Partnership (TPP), a trading agreement that included 11 countries in the Asia-Pacific area, excluding China.
Trump’s stance on trade has put a strain on his relations with the fashion industry, particularly with trade organisations such as the American Apparel & Footwear Association (AAFA) and the Footwear Distributors & Retailers of America (FDRA), which were major proponents of TPP.
Back in November, Matt Priest, president and CEO of the FDRA, said that his organization believes that the nixing of the TPP could be the end of an unprecedented opportunity to not only lower production expenses but also slash end costs to consumers and create more American jobs.
“For us, the TPP was all about the inclusion of Vietnam — that’s where a lot of shoes are made and that’s where we have a strong strategic interest as an industry,” Priest said. “If he were to scrap the TPP but announce the negotiation of a bilateral agreement with the Vietnamese government, then we would be extremely supportive — and we would be at the negotiation table.”
Following on his discourse, Priest added that “We had a once-in-a-generation opportunity within our grasp. We had a Republican Congress and a Democratic president who wanted to pursue this,” Priest said. “We had a half a billion dollars in savings during year one and 6 billion dollars in duty savings over a decade — those are big numbers, and they mean a lot,” said Priest then.
The partnership was one of the most favoured projects of Barack Obama. The initiative, aimed at countering China’s power in the Asia-Pacific region, and to strengthen the bonds between the US and 11 countries in the region, was launched under the Obama administration over the past few years in an attempt to counter China and deepen U.S. ties in Asia, involved 11 other countries that account for about 40 percent of the world’s gross domestic product, informs ‘Daily News’.
“You pull the U.S. out and the great fear is that China steps into that void and leaves us out,” John Husing, chief economist for the Inland Empire Economic Partnership.
“The Trump administration will pursue bilateral trade opportunities with allies around the globe”, advanced a member of Trump’s cabinet. "China will try to fill the gap now, and yet China is a colossal net exporter, not importer," said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. "Caveat Emptor for Asia if it rushes from TPP to RCEP.”
Beijing could find challenges now rallying other nations behind it, according to Barry Naughton, a professor of Chinese economy at the University of California in San Diego.