Ashgabat, 25 January 2017 (nCa) — Trump has kept his promise — TPP is adrift.
The TPP (Trans Pacific Partnership), more than eight years in the making, was undone by just one signature this week.
It was designed to be a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam, with special tariff and other concessions between the signatories.
With the absence of the USA, the other countries may still go ahead and salvage the deal because it is quite likely to benefit the participants even though a report by the Tufts University economists argues otherwise.
Another possibility is that China may step in and reshape the deal, making it broader and more beneficial for a larger portion of the population of this planet.
Yet another option is that the member-countries may split into sub-groups and adapt the provisions of TPP to their needs.
Regardless, Central Asia would benefit no matter what the final outcome.
With the space for bilateral and multilateral interaction intact, Central Asian countries, depending on their own capacity and interests, can enter into arrangements in any form of buyer-seller relationship.
However, TPP is just the tip of the proverbial iceberg.
Trump has promised to crackdown on illegal immigrants. He may not round up and deport every person without citizenship documents but he would certainly touch a few million, particularly those who have had some kind of brush with the authorities.
In parallel, he is pushing hard to bring the jobs back to the USA.
If both of these aspirations move at equal speed, they would collide. The jobs he brings back would be the jobs that his main group of voters – white males – may not want because the wages would be less than their expectations.
If he deports most of the able bodied illegals, there would be hardly any people willing to take up the jobs that return to the mainland USA. Such jobs would mostly be assembly-line work and call centres, inherently anchored to minimum wages.
If the minimum wages are raised to encourage people to take such jobs, this would add to the retail price of what they produce. The average Americans would pay more for the same things they use already, with the dubious prestige of Made in USA inscribed on the back of a smartphone or the handle of their toothbrush.
On the other side, the countries that are currently host to American manufacturers would be left with a sizeable force of semi-skilled workers. They would be forced to find ways to accommodate them and that can be done with coming up with their own brands. — Central Asia would benefit because the products with local brand names would cost less – a smartphone without an apple missing a bite on its face would be cheaper and possibly better. Necessity will remain the mother of invention.
If the jobs return to the USA in hordes, and other countries start coming up with their own brands, it will force the American manufacturers to find cheaper ways of production – and that would be more and better automation. Robotics, automation and AI (Artificial Intelligence) would get a boost by more research funds and ready buyers for commercial applications. This would benefit Central Asia in the mid to long run, as it would the rest of the world.
With the return of jobs and absence of TPP restrictions, the American economy may grow a stronger spine. This would be helpful in many ways. One promising aspect is that with the healthier economy it would be possible to start chipping away at the US debt, currently somewhere around USD 18 trillion, most of it internal. This would afford economic stability if the Trump administration can keep in check the opportunists from floating hedge funds, pyramid schemes, housing bubble and other barely legal scams.
With healthier US economy that lends to reliable forecasts, the world economy including that of Central Asia will breathe a sigh of relief.
The Trump team is a club of billionaires with global interests. Hopefully, they would not forget that their own interests would be best served by keeping in sight other people’s interests.