US President Donald Trump signs executive order to pull US out of TPP

Donald Trump, President of the United States of America, on 23 January 2017 signed an executive order to formally pull the country out of the negotiating process of the Trans-Pacific Partnership (TPP).

The TPP was one of the major international trade initiatives of Barack Obama. The partnership was aimed at setting trade rules for the 21st century and binding US allies against growing Chinese economic clout.

The Obama administration considered the TPP a companion agreement to the proposed Transatlantic Trade and Investment Partnership, a broadly similar agreement between the US and the European Union.

Though the agreement was negotiated under former President Obama; however, it was never ratified by the Congress.

Trump, during his presidential election campaign, had vowed to withdraw the US from the TPP which he argued was harmful to American workers and manufacturing.

What is Trans-Pacific Partnership?

• The Trans-Pacific Partnership was a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam.

• The agreement initially began with the P4 trade agreement between just four nations, i.e., Brunei, Chile, New Zealand and Singapore, that came into effect in 2006.

• Under the TPP, tariffs on US manufactured goods and almost all US farm products would have gone almost immediately.

• After seven years of negotiations, the finalized proposal of the Partnership was signed on 4 February 2016 in Auckland, New Zealand.

• However, the agreement cannot be ratified at present due to the withdrawal of the USA from the agreement.

• The agreement includes measures to lower both non-tariff and tariff barriers to trade, and establish an investor-state dispute settlement (ISDS) mechanism.