The United States Withdraws from the TPP

Source: Brock R. Williams, Ian F. Fergusson, Congressional Research Service. CRS Insight, IN10646, May 23, 2017

On January 23, President Trump directed the United States Trade Representative (USTR) to withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP) agreement; the acting USTR gave notification to that effect on January 30. The TPP is a proposed free trade agreement (FTA), signed by the United States and 11 Asia-Pacific countries on February 4, 2016. The agreement requires ratification by the member countries before it can become effective. Implementing legislation, the vehicle for U.S. ratification, was not submitted by the President or considered by Congress, in part due to the contentious debate over the agreement. Because the TPP had not taken effect, U.S. withdrawal does not immediately affect U.S. tariffs or other trade commitments. The United States also has existing FTAs with six of the TPP countries (Australia, Canada, Chile, Mexico, Peru, and Singapore), which this announcement does not affect.

TPP supporters argue that the withdrawal could damage U.S. negotiating credibility, undermine U.S. economic leadership in the region, hurt U.S. firms’ competitiveness abroad, and give China greater leverage to set regional trade rules. TPP opponents see the withdrawal as preventing greater U.S. import competition and potential job losses. Beyond the trade realm, some analysts also argue the withdrawal may signal declining U.S. engagement in the region and inability to assert leadership at a time when China’s rise and North Korea’s growing nuclear and missile capabilities are testing the U.S.-led rules system and challenging U.S. influence….