Should Ireland be worried about Trump dumping TTP?

It looks like the TTIP EU/US trade agreement is also dead in the water...

Should Ireland be worried about Trump dumping TTP?

Republican presidential candidate Donald Trump speaks at a campaign rally in Grand Junction, Colorado | Image: Brennan Linsley AP/Press Association Images

Donald Trump has made it clear that he plans to stick to his hard-line stance on trade reform by making withdrawal from the Trans-Pacific Partnership (TPP) one of his number one priorities on the day he touches down in the White House.

In a video message issued on the President-elect's social media channels, he said that he will issue a number of executive orders on his first day in office as he sets about 'Making America Great Again' - among these orders is the withdrawal of the US from the deal.

"Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back onto American shores," he stated.

TTP was central to Barrack Obama's trade policy, it was set to drop trade barriers between Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States.

It would have created a new trading bloc (with the US as its strongest nation) which would have been able to compete with China as its economy continues to expand rapidly.

"The Trans-Pacific Partnership will undermine our economy, and it will undermine our independence. The TPP creates a new international commission that makes decisions the American people can't veto, making it easier for our trading competitors to ship cheap subsidised goods into US markets - while allowing foreign countries to continue putting barriers in front of our exports," Mr Trump previously stated. 

Ironically, the death of this deal opens the door for China to assert its influence in the region by creating new trade deals. New Zealand has already signaled its interest in creating a new deal with China.

While Trump's speeches on the campaign trail were light on policy statements at times, trade was one issue which he continually returned too - arguing that these proposed deals are a threat to the US economy.

PA

His policy positions on trade focus on China, the only mention of TTP is his plan to pull out of it, it just adds that he will "Appoint tough and smart trade negotiators to fight on behalf of American workers."

"There is no way to fix the TTP," the US president-elect said in June - it remains unclear where the US will turn to forge new trade deals.

While Transatlantic Trade and Investment Partnership (TTIP) has been a controversial issue in Europe, it was not a live issue on the campaign trail across the Atlantic.

Based on his hardline TTP stance, Trump is expected to have little interest in breathing life back into TTIP (a deal which seems to be dead in the water anyway).

Trump Logic

Donald Trump's presidency is set to see the US retreat from a process of pursuing increasingly open trade deals as he pursues more protectionist policies.

He believes that open trade and globalisation are hurting the US economy and leading to the country being under cut by other nations.

It remains unclear how many of his campaign promises will be followed through on - but he has said that he will put tariffs of up to 45% on cheap Chinese goods.

If he follows through on this threat, soundings from China suggest that it is ready to retaliate.

US/EU

However, there is a window for TTIP to go through, or for a new trade deal to be drafted during Mr Trump's time in office.

He does not agree that he is against free trade, he just hopes to do things on terms dictated by the US.

“But we are absolutely going to keep trading. I am not an isolationist. And they probably think I am. I’m not at all. I’m a free trader. I want free trade, but it’s got to be fair trade. It’s got to be good deals for the United States," he said in an  interview with CNBC.

Ireland's interests

The Irish Government has been a prominent supporters of TTIP.

"Insofar as assuring the [US] President of Ireland's contribution to this, we have made it perfectly clear that we will work with our European colleagues and American connections to get this across the line," he told an economic conference in the US embassy last year.

In its election manifesto, Fianna Fail indicated its broad support for a deal, the section on TTIP begins, "Fianna Fáil supports the principle of removing barriers to trade. This is essential for Ireland to be successful."

Although, it adds that they, "also believe that trade deals must be fair and must protect the position of states which aim to ensure high living and employment standards."

Research commissioned by the Irish Government in 2015 concerning the economic impact of TTIP found that it would create 10,000 new jobs in Ireland and cause a permanent 1.1% expansion of the country's domestic economy.

The study was compiled by Copenhagen Economics, it found that a number of sectors of the economy would be boosted by an agreement - but Ireland's lucrative beef industry would shrink by between 2 and 3%.

While the politics behind the deal are complicated - a insular trade policy in the US is likely to be bad economic news for Ireland.