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article imageWhat now for the TPP?

By AFP     Nov 22, 2016 in World

After Donald Trump vowed to abandon the Trans-Pacific Partnership, here are some key questions about a huge trade pact that supporters said would write the rules for 21st century commerce -- but which might now be doomed.

- What is the TPP? -

The Trans-Pacific Partnership is one of the most ambitious free trade pacts ever negotiated.

It brings together some of the diverse economies that abut the Pacific Ocean -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam -- and accounts for a whopping 40 percent of the global economy.

Under US President Barack Obama it has been sold to American allies as a unique opportunity to seize the initiative on worldwide trade -- and ensure China, with its surging economy and growing global importance -- doesn't get to dictate the terms.

Supporters say it would do away with barriers to the free flow of goods, services and investment capital.

They claim it would also ensure a level playing field for all firms, protecting labour rights and incorporating important environmental safeguards.

- So why does Trump want to junk it? -

Critics say the TPP was hammered out during secretive meetings in luxury hotels and will do little other than benefit the usual suspects -- big businesses.

Trump's insurgent presidential bid was built, in part, on a pledge to overturn the trade deals that many of his supporters blame for what they see as a drain of US jobs.

They say the TPP would be another bad deal for America's industrial heartlands, allowing foreign manufacturers and food producers tariff-free access to the US market, meaning US firms and farms, whose production costs are higher, could not compete.

- What's going to happen to the TPP now? -

A lot of leaders have invested a lot of political capital in the TPP, selling it to reluctant electorates as a way to yoke America closer to the like-minded democracies of the Pacific Rim.

Some will be hoping that Trump changes his mind before taking office.

If that doesn't work and he sticks to his guns, a sized-down 11-member bloc could press ahead and get the agreement up and running, leaving the door open for a future US administration to join up if the political tide changes.

Option three is to re-open negotiations on the whole thing, which would offer Trump the chance to sell an "improved" deal to his electorate.

Finally, they could just abandon it and look elsewhere for a 21st century trade deal.

- Are there any other options for a free trade pact? -

Yes - the Chinese-backed Regional Comprehensive Economic Partnership (RCEP), which brings together the 10 Southeast Asian countries of ASEAN, as well as China, India, Japan, South Korea, Australia and New Zealand.

Something of a mirror image to TPP, it includes six of the Washington-led grouping's 12 members -- but not the US, and would encompass more than three billion people.

RCEP is generally thought of as less ambitious on things like employment and environmental protection.

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