The Republican presidential nominee Donald Trump has said he would not sight TPP ©Press Association Images
The Republican presidential nominee Donald Trump has said he would not sight TPP ©Press Association Images

Trump threat to TPP agreement

Adam Leach is a freelance business journalist
3 August 2016

A vital trade deal between the US and Australia could be rolled back if Donald Trump becomes US President, delegates at the CIPS Australasia 2016 conference heard.

Incoming senators could also cause disruptions domestically, added Rajiv Biswas, IHS Markit’s chief economist for Asia-Pacific.

Responding to a question from the audience on the potential impact of the upcoming US election on the Trans-Pacific Partnership agreement – between 12 Pacific Rim countries, including the US and Australia – Biswas suggested that a win for Trump could call the whole deal into question. “[Trump] is genuinely opposed to TPP and free trade liberalisation.”

The TPP has been agreed, after years of negotiations, but will not be ratified until February 2018.

While emphasising that there would be strong pressure from both business and his own Republican party to press ahead with the deal, Biswas said that it would not be easy for Trump to u-turn on his opposition to it. “I think there would be pressure on him to do something on that but he’s set out so strongly against it, that it would be very difficult to see how he could shift on it.”

Democrat candidate Hillary Clinton, who became the first woman to be confirmed as a presidential candidate for a major party, has also expressing opposition to the deal, but Biswas believes she would likely follow through with it, with many of the officials and politicians who negotiated the deal under President Barack Obama likely to apply pressure for it to be enacted. “Although there’s been some rhetoric from Hillary Clinton against TPP, I think fundamentally she will support that if she become president,” he said.

In addition to any disruption from the US election, opposition may also be found in Australia itself. Offering her view on the deal, Julie Toth, chief economist at Australian Industry Group, said that while the re-elected Liberal-National coalition would continue to support it, a number of incoming senators may well seek to disrupt or block it.

“We have seen a new selection of senators introduced who are opposed to trade liberalisation and we could see some blockages there, which would be a concern,” said Toth.

Among the new crop of Senators almost certain to oppose the deal is the far-right Queensland senator Pauline Hanson, who in addition to being a vocal critic of TPP, has called for a ban on all Muslim immigration. 

Support for the TPP is mainly centred on its removal and reduction of a number of trade tariffs between member states, on the grounds that it will lead to increased trade. However, away from nationalist objections, there are legitimate concerns about its inclusion of measures that protect investors by enabling them to skirt sovereign laws. The measures, commonly referred to as investor-state dispute resolution mechanisms, create a new legal route for disagreements to be settled, and which enable a company to sue a country.

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