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Wednesday, November 23, 2016


China TPP
According to the Zerohedge website, China is emerging as the great beneficiary of Donald Trump's decision to eliminate his participation in the Trans-Pacific Strategic Economic Partnership Agreement, TPP. It should be noted that the website Zerohedge has been a broad advocate of Trump since the start of the electoral race.
According Zerohedge, while Obama was speaking at the APEC summit in Peru, hoping to rescue his legacy of global trade, TPP, President of China Xi Jinping officially called the launch of the Free Trade Area of Asia-Pacific, "for institutionally ensure open economy ", a move that many expected to take place as China was eager to fill the vacuum left by the United States in any trade agreement trans-Pacific.
China president Xi Jinping
In his speech in Lima, Xi Jinping sought to position himself as a leader in global trade, promising to support trade. Participants noted the need to "deepen economic integration and oppose trade protectionism."
Then, overnight, China got a real treat when Trump announced in a brief video statement that his first executive order upon becoming president would be to withdraw the United States from the TPP.
Trump axes TPP
That's all that Beijing needed to hear and China morning, he said he hoped to conclude a trade pact in Asia as soon as possible, in what the Wall Street Journal called "a signal of intent to Beijing to expand its influence Regional crisis amid the apparent collapse of the TPP, backed by the United States. "
A spokesman for the Ministry of Foreign Affairs of China said Asian leaders are pushing for negotiations for a Regional Economic Partnership 10 nations that China supports as an alternative to the agreement led by the United States and "hope that such negotiations can achieve results soon"
TPP Regional Economic Partnership
As a result, the shift in regional support has been abrupt: Singapore PM Lee Hsien Loong, the promoter of the TPP, is now calling on Asian Pacific nations to boost trade by supporting the China-led pact and other initiatives. "There are still other ways to free trade in Asia-Pacific , " Lee said last weekend.
Lee Hsien Loong
Lee Hsien Loong
Others also quickly shifted their focus from a trade agreement with the United States to one with China: TPP members Vietnam and Malaysia said they were shifting their focus to the China-backed group, according to their respective trade ministers, noting Minister of Malaysia, Datuk Seri Mustapa Mohamed, who cited an "uncertain international economic situation."
Most viewed the apparent change as a victory for China.
"The TPP has been a containment strategy by the Obama administration , " said Zou Zhengfang, professor of economics at Renmin University. "This is a good opportunity for China to become more powerful on the global stage by starting with the economy and gaining more influence"
What is remarkable is the eagerness and ease on the part of most TPP member states (except Japan) to shift their allegiance to Washington DC, for a loyalty to China.
What is also notable is the importance of free trade for most Asian countries whose economies are heavily export oriented. In contrast to the growing calls for protectionism in the US and Europe that are much less trade-dependent More dependent on debt). It also notes, as the Wall Street Journal writes, the fading of Obama's vision of making the TPP agreement an economic anchor for America's strategic engagement in a region that is being transformed by China's growing economic power and its goals Expansionists.
TPP agreement
In short, China wins to materially expand its sphere of influence through an agreement of "free trade", will define the terms from day one . In fact, the TPP would reduce or eliminate some 18,000 tariffs for a group of Pacific nations in the Americas, Asia and Oceania, an area that accounts for 40 percent of the world economy. The China-led pact is less ambitious in reducing tariffs; It is likely to be much more ambitious in establishing terms that benefit its own trading companies. And what will China have to offer? Since China is the dominant power, you have to accept the terms or be "pushed" from the Regional Comprehensive Economic Partnership, and be isolated in the cold outside protectionist world.
However, while most Pacific Rim countries welcome their new head of world trade, a fervent supporter of a US-led trade pact still refuses to admit that the TPP is dead and will not have More choice than bowing to Beijing.
"The TPP meaningless without the United States , " said Shinzo Abe, Japanese Prime Minister shortly before Trump crushed their hopes with his statement yesterday.
Shinzo Abe
The Wall Street Journal adds that a spokeswoman for the Japanese Foreign Ministry said Japan still holds out hope that the deal will be restored somehow and that Prime Minister Abe plans to keep trying to change Trump's thinking on the issue.
As for Trump's plans to remake US trade relations once he takes office remains unclear. Withdrawal from the TPP may be the first step in a broader effort to remake other agreements it has criticized, such as the North American Free Trade Agreement.
" We still do not know where the government is going Trump , "said Derek Scissors, a resident at the American Enterprise Institute, which focuses on China academic. "What matters is whether this will become a pattern focused on just disrupting business relationships, without reaching anything positive."
Judging by the 2,200 S & P, the answer is obvious and Trump seems to be right ... although it should be noted that markets have in recent years moved away from the real economic fundamentals.

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