24th January 2017 United States Officially Withdraws from the Trans-Pacific Partnership Agreement (“TPP”)

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PRESS RELEASE
Date: 24th
January 2017
Title: United States Officially Withdraws from the Trans-Pacific Partnership Agreement (“TPP”)
23rd January 2017. Making good on a campaign pledge, President
Trump today signed an Executive Order withdrawing the U.S. from the
TPP process, the marquee trade initiative of the prior administration.
The TPP would have lowered trade barriers amongst its twelve members (Australia,
Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the
United States and Vietnam), accounting for approximately 40% of the world’s economy.
Five years of negotiations culminated in an agreement in October of 2015; however it
needed the ratification by the legislative bodies of the negotiating partners to take
effect. The U.S. Presidential candidates on both sides of the aisle had campaigned on
a rejection of the TPP as part of an effort to protect U.S. manufacturing jobs. Ironically,
a required U.S. International Trade Commission report concluded that the probable
economic effect of the agreement on the U.S. economy would have been minimal.
Many questions remain as a result of today’s action. Vietnam had been touted as the
big winner under the TPP based on its history as a manufacturing base and its
attractive labor rates as compared to the more developed TPP countries. A number of
U.S. companies have invested in both factory space and local material mills in
anticipation of the TPP taking effect. However, Vietnam government officials promote
the ongoing competitive nature of Vietnam along with the fact that Vietnam (either alone
or as part of ASEAN) has implemented or concluded free trade negotiations with
numerous other countries, including a pending agreement with the EU (awaiting
ratification).
In addition, although the TPP is now “off the table,” past statements by the President
reflect his potential openness to negotiating separate bilateral deals with individual TPP
countries (as well as others, such as a post-Brexit United Kingdom).

2. No doubt the Trump administration will bring with it a number of developments on the
trade front that will have to be closely watched and assessed.
Please do not hesitate to contact Arthur W. Bodek or any other member of Grunfeld,
Desiderio, Lebowitz, Silverman & Klestadt LLP to discuss these or any other issues that
may impact your business under the new administration.
This press release was distributed by the International Trade Council.
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