Rashly, United States President Donald Trump marked his first day in office by formally announcing his nation's withdrawal from the Trans-Pacific Partnership (TPP). The pact was meant to lock in 40 per cent of the global economy in a high-quality trade agreement which also combines labour and environmental standards. With the biggest economy not in the picture, others wanted out too, like Vietnam which was aiming at better access to the world's richest market. Now, trade ministers of the TPP nations, the US excepted, have announced after a meeting that they will try to resuscitate the ambitious trade deal.
This is welcome news. With large markets like the US and China determinedly lengthening their domestic supply chains, trade growth has been in decline. Meanwhile, some politicians, Mr Trump included, have made hay stoking fears about globalisation killing jobs and victimising people. Under the circumstances, relying on a single major market, or a particular trade deal alone, would be patently unwise. Instead, trading nations must cast the net as wide as possible.
For this reason, even if not quite as ambitious as the TPP, the RCEP, or Regional Comprehensive Economic Partnership, is eminently worth pursuing. Unlike the TPP, in which the US would have been the elephant economy in the room, China, Japan and, to an extent, India share those roles in the RCEP. Since it does not include the US, some see the RCEP as a China-led counter to the TPP. It is not. The RCEP is actually an Asean-led initiative that agglomerates the 10 members of the grouping with China, Japan, India, South Korea, New Zealand and Australia. As with the TPP, there are foot-draggers in the RCEP as well. To counter them, and to conclude a quality deal in quick time, it may even be worthwhile dropping the consensus approach and pursuing a so-called "Minus One" formula. That would allow those not immediately ready to sign to have the option to do so at a later time when they are prepared.
Should the RCEP succeed down the road, a turncoat US, under Mr Trump, might recognise its TPP folly and rue the erosion of its geopolitical influence. Perhaps this might even prompt a rethink. Already, there are stirrings in the US to somehow revive the essence of the TPP, if nothing else than by using it as a template for Washington to use in its new-found fascination for bilateral trade deals. That way, the US could end up being a part of a broader trading community without being a formal member of the TPP. Mr Trump will be receiving the Vietnamese prime minister at the White House next week. The benefits of economic integration are a worthwhile topic to place on the meeting's agenda. Hopefully, the two leaders will be able to lift their sights from the relative impact on gross domestic product to consider key strategic issues when discussing trade pacts.