International Business & Economy The Trans-Pacific Partnership is dead and Singapore should be concerned

The Trans-Pacific Partnership is dead and Singapore should be concerned




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Senator Charles E. Schumer who is slated to be the top legislator from the Democratic Party of the United States has confirmed that the Trans-Pacific Partnership (TPP) is all but dead. The TPP is the signature-piece of President Barack Obama’s ‘pivot’ to the east.

The TPP is a trade agreement between 12 countries – The United States of America (USA), Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.  The Washington Post reported that Mr Schumer told labour leaders that the TPP will not be ratified by American Congress.

President Obama used a visit from Prime Minister Lee Hsien Loong to launch a final public push for the TPP on 2 Aug, when Lee was hosted to a State dinner by Obama.  But both presidential candidates, Hillary Clinton and Donald Trump, said that they would not support the TPP ahead of the election on 9 Nov.

President-elect Donald Trump was an especially harsh critic of the trade agreement and had described the outsourcing of jobs that the trade deal will concede to TPP countries as a potentially great threat.
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PM Lee in an interview to Time magazine in October, said that the USA risked injuring its standing and credibility with countries around the world if the TPP is rejected by its lawmakers.

“The one big thing which you have done is to settle the TPP, which Obama has done. It shows that you are serious, that you are prepared to deepen the relationship and that you are putting a stake here which you will have an interest in upholding…Now you say, ‘I walk away, that I do not believe in this deal.’ How can anybody believe in you any more?” – Lee Hsien Loong

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Socio-economics commentator Chris Kuan explained in October why the TPP is important to Singapore.

“(Singapore) does not seem to be able to generate enough internal demand to rebalance the economy to a certain degree from an over-reliance on trade despite the large increase in population. This is likely due to high costs and lack of sufficient social safety net which caused excessive savings by the resident population while the non-resident population generally of lower wages are even more affected by the high costs and are savers in any case.

Hence, ratifying the TPP is important to the government. The idea is freer access to markets. The consequences of opening up the economy affects Singapore far less than others because Singapore is already very open, with an English speaking business environment and easy access to foreign workers of various skill levels.”

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