TPP Ratification Unlikely Under Trump, Singapore Unhappy

In the article Singapore disappointed TPP is unlikely to be passed under Donald Trump: PM Lee, the author seeks to examine Singapore’s stance on the TPP given that Donald Trump is now the president elect in the United States.  As I’ve written before, the US is the pivotal player in the TPP deal.  If the US does not ratify the TPP, it is highly unlikely the deal will be ratified in other countries, including Singapore.  Singapore has been a stark supporter of the TPP, and it’s not surprising that with the prospect of the TPP fading, Singapore has voiced public disappointment.

As another indication that the world was watching the US election, Singapore’s Prime Minister Lee indicated he was well aware of Donald Trump’s stance on the TPP.  Lee’s exact word were that Trump “had no sympathy for the TPP at all.”  Singapore’s main reason for its pro-TPP stance is that it would to enjoy lower tariff and non-tariff barriers for both goods and services, but Singapore is also a very small player in the grand TPP scheme.  The TPP accounts for 40% of global trade amongst its participating countries.  PM Lee has also noted previously that not ratifying the TPP would make the US lose credibility with countries around the world.

Moving forward, it looks like Singapore’s stance on the TPP is all or nothing.  When PM Lee was asked if the deal could be amended to add new countries like Russia or China, he responded that the deal would be a completely new animal.  He called such a deal a “new exercise,” a strong indication that the deal as it is right now is the only way Singapore would like to see the deal ratified.  As President elect Trump begins to enact his policy, the world will be watching with interest to see how deals such as the TPP created under the Obama administration will be handled.  If Trump does keep any of his campaign promises, it will not be surprising if the TPP is completely scrapped.

 

What countries will be involved if a new TPP style deal is crafted?

Will there be significant global fallout if the TPP is not ratified in the US?

How much consideration should Trump give to smaller countries like Singapore as compared to the larger countries not in the agreement such as Russia and China?

http://www.straitstimes.com/asia/se-asia/singapore-disappointed-tpp-is-unlikely-to-be-passed-under-donald-trump-pm-lee

 

If Trump has His Way, Singapore Will Lose Out if TPP Not Ratified

In the article, How Donald Trump’s views on the TPP could sink Singapore, the author examines a Trump presidency could would affect the TTP as well how the TPP, or lack thereof, will affect other countries in the Pacific, mainly China.  The TPP involves 12 countries that account for approximately 25% of global exports and 40% of world GDP, so the deal is very significant.  Furthermore, the World Bank predicts each participating countries’ GDP will climb by 1.1% by 2030 should the deal come into being.  With the ratification or dissolution of the TPP, Singapore stands to gain much or experience significant losses.

Donald Trump’s recent comments on the TPP and China may have some truth to them.  He believes China will attempt to take advantage of its position as not being part of the TPP and initiate back door trading with the countries involved, including Singapore.  China stands to lose out on $46 billion worth of investments and trade each year if the TPP is ratified.  Interestingly, China already has a free trade deal with Singapore.  That being said, Singapore stands to lose much given the fact that total trade as a percentage of GDP is over 300%.  For comparison, the number is just 28% for the US.  So the TPP not being ratified could seriously hurt Singapore’s economy.

In 2015, Singapore was China’s second favorite investment destination.  China actually has free trade deals with two-thirds of the countries in the TPP agreement.  These previously existing deals insulate China a bit should the TPP be ratified.  Unfortunately, a country like Singapore does not have these deals in place.  It’s not surprising Singapore has very publicly supported the TPP, and no matter which US presidential candidate is elected, Singapore will continue to push for ratification.  If Trump is elected, it will be interesting to see if he completely scraps the TPP as he says he will even in the face of serious objections from countries with high vested interest like Singapore.

 

Do you believe Trump is telling the truth about how he feels about the TPP?

With China not being a part of the TPP, does Trump actually have a valid point?

What will Singapore do if the TPP is not ratified?

http://sbr.com.sg/economy/commentary/how-donald-trumps-views-tpp-could-sink-singapore

Singapore Supports the TTP, Anticipates US Agreement

In the articles Singapore PM: Rejecting TPP Means War, Shifting Alliances in Pacific More Certain, the author examines how Singapore views the TTP and as well as how Singapore anticipates the US will sign on to the TTP, thus avoiding possible future conflict in the pacific.  These observations stem from the political meeting between President Obama and the Prime Minister of Singapore Lee Hsien Loong in August of this year, where Prime Minister Lee spoke at the White House about the TTP, and how not passing it could be potentially disastrous.

The TTP is a 12-nation trade agreement, which primarily has stalled out in the US congress.  Nonetheless, president Obama, a stark supporter of the TTP, and believes it will get passed.  Singapore’s Prime Minister pointed out that in the next 50 years, the major superpowers in the world can work toward interdependence and peaceful cooperation or towards rivalry and a higher risk of conflict.  Lee also pointed out that the reason there is manageable relationships between countries in the Pacific is because of mutually beneficial trade.  On the flip side, Americans are worried about localized job losses because of an agreement like the TTP, and Obama acknowledged this, though he did not give specifics on how such people will be helped should the agreement pass.

Singapore views the TTP through a Confucian mindset in that the trade agreement is about relationships between countries and how these countries balance their obligations and benefits of the agreement.  In the same thread, Lee likened the US to a bride in this relationship, in that if the bride does not show up, many countries will be hurt.  With both US potential presidential candidates against the TTP, it will be interesting to see what happens.  Surprisingly and optimistically, Lee ended the conference with a statement regarding Singapore’s previous dealings with US Democrats and Republicans, noting that relations have been good with either party in power.

 

Do you think that actual war could break out if the TTP is not passed?

Does the US have the most to lose, or gain, from the TTP?

Do you think that the presidential candidate elected will change his/her stance on the TTP once in office?

 

http://www.breitbart.com/2016-presidential-race/2016/08/02/singapore-pm-rejecting-tpp-means-war-shifting-alliances-pacific-certain/

 

Singapore the largest indirect beneficiary of TPP?

An article titled “10 benefits the Trans-Pacific Partnership will bring Singapore” (published in The Strait Times, dtd 11/16/2015 by Chia Yan Min http://www.straitstimes.com/business/economy/10-benefits-the-trans-pacific-partnership-will-bring-spore) explores the impact of TPP on Singapore. The article notes that the direct impact of TPP on Singapore will be marginal and only 2 new markets, viz. Mexico and Canada will open up. The article notes that the Singapore will benefit more indirectly from the deal. Firstly, the deal, which includes countries with 40% of world GDP and 1/3rd of the world trade would mean a boost of trade among these countries. Singapore, with its logistics and financial infrastructure would be the beneficiary of the trade and financial services. Moreover, the trade boost in ASEAN and removal of equity restrictions would mean higher penetration of Singapore based consulting services for both companies expanding in South East Asia and Government services. But would economic opening up of borders between these countries signal a danger sign for Singapore based companies? Would these services, which are touted to be game changers for Singapore, not shift entirely to other countries like Viet Nam or Malaysia? And considering some protection provided to smaller TPP nations in regards to local content, how much will Singapore actually benefit?

The Macro Economic tool ignored by TPP

With the finalization of TPP, all the partners face an uphill task of passing the agreement in their respective structures. While countries like Vietnam, Malaysia etc. will have no issues ratifying the agreement, the US faces a daunting task. Jeff Spross in his article “The Trans-Pacific Partnership’s biggest failure” published in The Week, dtd. 11/6/2015 (http://theweek.com/articles/587248/transpacific-partnerships-biggest-failure) notes that the TPP agreement does not offer any protection against currency manipulation. The author is concerned that as a result, devaluation of the currency of partner country could potentially lead to trade imbalances and changes in trading volume. The rising value of dollar against other currencies has led to a huge trade imbalance for US and could be a potential boon to Vietnam and Singapore. The article points out that US has indeed had this issue in the past with Japan, Malaysia and Singapore, all partners in TPP. Does this represent not only a risk for US, but also all the other countries? And if this scenario becomes true, what effect will it have on the trade in the future? Considering the impact of currency manipulation in China on the world, how would a currency manipulation affect non TPP countries?

TPP more of a strategic than trade boost for Singapore

In an article titled “TPP: What’s in it for Singapore?” dtd Oct 14, 2015, Chia Yan Min (http://www.straitstimes.com/business/economy/tpp-whats-in-it-for-singapore), discusses that the impact of TPP for Singapore is more strategic than a trade boost. As per the article, the net gain in exports for Singapore is only 1.4% compared to 10% for Vietnam or 5.5% for Malaysia. While TPP will open up markets of South America for Singapore, the author contends that TPP will give a major boost to foreign firms to bid in government contracts and take larger stake in foreign firms in key sectors. Apart from that, it will lower barriers to help small to midsize firms expand overseas. However, will these stipulations prove passage of TPP difficult in the original 6 countries? Also, how will a delay in ratification of TPP agreement in the member countries impact Singapore?

TPP Deal Reached

The recent trade deal reached between 12 Pacific countries, including the U.S. and Japan, was described as the ‘largest regional trade accord’ in history, in an article by the New York Times. The agreement is hailed as an important first step after two years of intense negotiations. The deal is set to open new markets, protect workers, and preserve the environment. While these 12 countries have an agreed upon deal in place, the next step will be for the agreement to make its way through each participant’s respective legal system. How might the current deal change as it is vetted through the respective country’s political processes? What are some benefits to the new TPP? What are some of the downsides to the new TPP?