Last month – January 23 to be exact – marked the fifth anniversary of President Trump's decision to withdraw the US from the Trans-Pacific Trade Agreement (TPP). The country has been suffering from it ever since.
Comprised of the US and 11 other Pacific Rim countries – including economic heavyweight Japan – a 2016 Cato analysis found that the TPP resulted in net trade liberalization. A study by the US International Trade Commission estimated an increase in US real GDP of $42.7 billion through 2032 as a result of TPP membership, while a publication by the Peterson Institute for International Economics (PIIE) predicted real US income gains of $131 billion through 2030.
But the US withdrew from the TPP and those gains never happened.
The TPP, however, aimed at more than just lowering trade barriers. It was also an attempt by the US – along with like-minded allies – to help shape the rules that govern trade in the Asia-Pacific region. As both the geographical and economic center of Asia, China is already assured of having an important voice in these matters. The TPP was meant to ensure that the US had a prominent seat at the table when such rules were drawn up, before it chose to walk away.
In other words, the US losses from its withdrawal from the TPP have not only been economic but also geopolitical. Furthermore, if the TPP was seen as a useful tool to counter China's influence during the years it was negotiated, it would be even more valuable now given the increasingly complex nature of the bilateral relationship.
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