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Republican president-elect Donald Trump delivers his acceptance speech as Vice president-elect Mike Pence looks on during his election night event.
Japan on Tuesday reaffirmed its commitment to the Trans-Pacific Partnership (TPP), even as U.S. President-elect Donald Trump said in a video message that his administration will pull out of the trade deal.
The trade pact was a centerpiece of the Obama administration’s "pivot" towards Asia and was meant to solidify the U.S.’s presence in what is considered by many American companies as the most economically dynamic part in the world.
"I’m going to issue a notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country. Instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores," said Trump.
Trump’s announcement came as Japanese Prime Minister Shinzo Abe said in Buenos Aires on Monday that the partnership would be "meaningless" without the U.S.
On Tuesday, however, Japan’s chief cabinet secretary Yoshihide Suga told a news conference in Tokyo that the country plans to lobby other signatories to the pact. He added that he had no comments on Trump’s statement.
A refusal by the U.S. to join the TPP would be a good opportunity for China to push its own deals such as the Regional Comprehensive Economic Partnership (RCEP), suggested He Weiwen, vice president of think tank Center for China and Globalization(CCG).
"We have been spending efforts for years to get (RCEP) done by end of this year or next. It is an important pathway to the larger arrangement of the FTAAP (Free Trade Area of the Asia-Pacific)," he told CNBC’s "Squawk Box" even as he stressed the important of consultation and stability between the U.S. and China.
Beijing pushed the FTAAP in 2014 as a framework for liberalizing Pacific Rim trade and President Xi Jinping renewed calls for the pact over the weekend at the APEC CEO Summit in Peru.
Even though RCEP’s standards are lower than those of TPP’s, that the U.S. was unable to get things done from one administration to the next meant "China is the only game in town" for Asian countries, said Ian Bremmer, president at Eurasia Group.
China’s efforts to push trade pacts coincide with other soft power initiatives aimed at cementing the country’s economic influence, such as Xi’s global One Belt, One Road infrastructure plan and the Beijing-led Asian Infrastructure Investment Bank.
This meant that Communist China was now the flag-bearer for global free trade, as Xi indicated over the weekend in Peru.
"This was not the shrinking violet ’oh we are too poor, we don’t want to lead’ (China). This was China saying the U.S. is abdicating and we are prepared to do more in terms of international trade, in terms of infrastructure, writing checks," said Bremmer, who was at the weekend APEC event.
From CNBC, Nov. 22, 2016