By Sahid Fawaz
Are trade wars on the horizon? A move by 11 nations is adding more tension to international trade.
“A trade pact originally conceived by the United States to counter China’s growing economic might in Asia now has a new target: President Trump’s embrace of protectionism.
A group of 11 nations — including major United States allies like Japan, Canada and Australia — signed a broad trade deal on Thursday that challenges Mr. Trump’s view of trade as a zero-sum game filled with winners and losers.
Covering 500 million people on either side of the Pacific Ocean, the pact represents a new vision for global trade as the United States threatens to impose steel and aluminum tariffs on even its closest friends and neighbors.
Mr. Trump withdrew the United States from an earlier version of the agreement, then known as the Trans-Pacific Partnership, a year ago as one of his first acts in office. It will undeniably be weaker without the participation of the world’s biggest economy, but the resuscitated deal serves as a powerful sign of how countries that have previously counted on American leadership are now forging ahead without it.
‘Only free trade will contribute to inclusive growth of the world economy,’ Taro Kono, Japan’s foreign minister, told a group of ministers from Southeast Asian countries in Tokyo on Thursday. ‘Protectionism isn’t a solution.’
In its original incarnation as the TPP, the pact was conceived as a counterweight to China, whose vast economy was drawing other Asian countries closer despite its state-driven model and steep trade barriers. Not only does the TPP lower trade barriers, it could also prod Beijing to make changes to enjoy the same benefits.
When President Obama was advocating the deal, he said that ‘America should call the shots’ instead of China.
Now, the agreement could in some respects act as a defense against the shots America is calling.”
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