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Mihir Sharma

Trump Can't Kill the TPP

Its most important principles will live on in future free-trade pacts.
A foundation has been laid.

A foundation has been laid.

Photographer: Dado Galdieri/Bloomberg

When President Donald Trump withdrew U.S. support for the Trans-Pacific Partnership on Monday, he made it harder for American companies to compete. In the name of U.S. labor, he compromised the interests of the American worker, for the TPP would’ve forced labor standards onto the trade agenda for the first time in history. He turned his back on America’s allies and handed China a giant strategic victory. What he didn’t do was kill what the TPP stands for.

The TPP has two purposes. First, it recognizes that the barriers to trade now are significantly different from those decades ago. Paperwork, not tariffs, poses the biggest obstacle to the development of trade networks. Complex and contradictory regulatory regimes, sovereign risk, implicit backing to state-owned enterprises -- these are the problems traders face, and they’re what the TPP addressed.