U.S. withdrawal from pact comes as both relief and concern: experts
U.S. President Donald Trump's decision to officially withdraw the U.S. from the Trans-Pacific Partnership (TPP) trade pact met with mixed reactions in China on Tuesday.
Some experts said that the move is a relief for China, which was noticeably absent from the pact, while others pointed to tough challenges ahead for bilateral trade with the U.S.
Trump on Monday took his first executive action as U.S. President to withdraw his country from the 12-nation trade pact, which had been a pillar for the U.S.' strategic rebalance to the Asia-Pacific region under Barack Obama and was widely viewed as a move to counter a rising China.
Though it came as no surprise, given Trump's staunch opposition to what he repeatedly described as a terrible deal for U.S. workers, the move might have eased some of China's concerns over the trade deal, experts said.
"[China's] concerns about the TPP have now been relieved," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, told the Global Times on Tuesday.
Bai said the TPP was pushed by the U.S. to challenge China on trade in the Asia-Pacific region. With the deal now "almost certainly" dead, China can focus on multilateral trade agreements with countries in the region such as the Regional Comprehensive Economic Partnership (RCEP), a 16-nation trade pact that includes the Association of Southeast Asian Nations, China, Australia, India, Japan, South Korea and New Zealand.
"The demise of the TPP could give a boost to the long-stalled RCEP negotiations," Bai said, noting that many countries had been mainly focused on the TPP and were not very enthusiastic about the RCEP. "Now they will look again at the [RCEP] and put more focus on it," he added.
But the relief will be minor and fleeting, according to Jiang Yong, a research fellow at the China Institutes of Contemporary International Relations.
"Despite all the talk about how the U.S. would challenge China with the TPP, the deal didn't really have much substance that could threaten China as many had feared," Jiang told the Global Times on Tuesday.
He said though China was not part of the TPP, it has relatively healthy bilateral trade relations with most of its signatories, including the U.S..
What's more worrisome, according to Chinese experts, is the Trump administration's shift from multilateral trade deals to bilateral trade agreements, as well as its protectionist trade policy and tough stance on China.
In the executive order on Monday, President Trump, while noting the "paramount importance" of trade, said his administration will deal with individual countries on a one-by-one basis in trade negotiations, rather than on a multilateral basis.
"This will give the Trump administration the ability to challenge any country on trade," Bai said.
Given Trump's tough stance on China, an increasingly confrontational trade relationship is "no longer a question of if but how," Jiang said, adding that the U.S. will likely increase anti-dumping measures against Chinese exports and scrutiny of Chinese investment. He said the U.S. might also target the Chinese financial market for challenges.
But that would be a very damaging move for both China and the U.S., and it might even hurt the U.S. more, if China takes countermeasures to target U.S. imports and investment in response, Bai said.
In what Chinese experts called an ironic move, Australian Trade Minister Steven Ciobo on Monday signaled that the TPP is open to China and other countries to join. But experts said the chance of China's joining is slim.
"Just as the TPP wouldn't work without China in the first place, it wouldn't work without the U.S.," Jiang said.
Asked about Ciobo's comment, the Chinese Foreign Ministry on Tuesday gave a non-committal response, saying that it is open to fair and transparent free trade deals.