Yesterday, Monday January 23, 2017, President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership.
The TPP – which also included Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Malaysia, Singapore, Vietnam and Brunei – would have slashed tariffs for American imports and exports with those countries.
With the TPP no longer on the table for the United States, what does this mean for the international trade community?
The 11 remaining TPP nations are now set to regroup and say they intend to move forward with the deal. However, with the withdrawal of the U.S., it could mean a major agreement rewrite or an opening for another global superpower.
While critics and supporters voice their opinions, ramifications are unclear.
One thing however is certain: businesses will lose access to potential new markets.
Furthermore, Trump is expected to renegotiate the terms of NAFTA, the free trade agreement between the US, Canada and Mexico. Unlike the TPP which Congress had not yet approved, renegotiating NAFTA terms could have more immediate consequences.
Canada and Mexico are two of America’s most significant trade partners. Between January and November 2016, collectively, the two countries accounted for more than 34% of the U.S. export market and also combined to account for more than 25% of the country’s total imports.