Michael G. Plummer

Asia-Pacific Economic Integration and the New US Administration:
Risks and Opportunities for Europe

For the past half century, trade has made substantial contributions to development in many economies, making a vibrant trading system a global priority. Yet world trade growth is now decelerating, while the complex challenges of today’s trading environment and divergences across World Trade Organisation (WTO) members have stymied progress on further liberalization at the WTO. In this vacuum, ambitious mega-regional trade agreements (MRTAs) are now emerging as a possible answer to the global stalemate, with the Asia-Pacific region serving as their main incubator but with the EU-US Transatlantic Trade and Investment Partnership (TTIP) as another example of this trend.

Then came the election of Donald Trump as President of the United States. The Trump Administration has been openly skeptical of the benefits of the global trading system; for example, one of the first acts of the Administration was to formally withdraw for the Trans-Pacific Partnership (TPP) agreement, a US-led agreement that was six years in the making and which was by far the most advanced agreement in the Asia-Pacific region. It has also expressed its intent to renegotiate the North American Free-Trade Agreement (NAFTA), levy new tariffs on countries with which the United States has a trade deficit, and perhaps to walk away from the World Trade Organization. The fate of the TTIP is uncertain but negotiations are unlikely to proceed in the near-term.

The proposed MRTAs and the new directions of the US Administration are bound to have significant implications for Europe and the future of the global trading system. It is the goal of this presentation to gauge what these implications might be and how Europe can respond to new challenges.