Sunday, November 12, 2017

Asia trip by Trump unites Asian nations

The main impact of Trump's visit to Asia has been to encourage nations in that area to work together and with China.  This could not be called an accomplishment by Trump on the trip, but it is surely one result of it.

As is well known, Trump backed out of the 12 nation Trans-Pacific Partnership after becoming President.  With nothing forthcoming from the administration, the other 11 nations are now creating the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a similar trade agreement excluding the U.S.  Just like the pre-Trump agreement, China is not included.  In order to expand its influence, China is now negotiating a possible deal with 16 Asia-Pacific countries to ease trade flows in that overall region.

On this side of the world, Mexico and Canada are now waiting to see if Trump will blow up Nafta, an agreement that has been beneficial to all three countries concerned but that has led to results that bow to competitive advantage and not nationalism.  Both of those countries were part of the TPP agreement and will remain part of the new one without the U.S. 

It is tiresome to constantly point out Trump's short-sighted approach and his willful ignorance about economic decisions that lead to both growth and cohesion in the world.  Trade builds bridges that lead to cooperation rather than confrontation.  Trade rewards the inherent strengths of participants.  The balance of this changes over periods of time, an example being that the U.S. now has an unfortunate competitive advantage in low skill labor costs relative to major European countries.

The rest of the world will go on without the U.S., without Trump.  It is notable that the U.S. is now the only country that has not signed the non-binding Paris Climate Agreement, as Syria joined last week.  Post Trump, whenever that may be, hopefully the U.S. will be welcomed back to global efforts.


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