Leaders of some of the 11 other nations involved in the initiative said they hope to push ahead with the agreement in some form, with or without the U.S.
WATCH: Asian Trans-Pacific Partnership nations pledge to salvage trade accord
Australian Prime Minister Malcolm Turnbull said Tuesday he had discussed the pact’s future recently with the prime ministers of Japan, Singapore and New Zealand, all TPP members, and believed the pact could survive without the U.S.
“Losing the United States from the TPP is a big loss, there is no question about that,” Turnbull told reporters. “But we are not about to walk away from our commitment to Australian jobs.”
Trump says he favours one-on-one agreements with other nations rather than multinational pacts like the TPP, which would have included markets comprising 40 per cent of world GDP and was eventually meant to be the foundation for a wider pan-Pacific trading bloc.
As expected, on Monday the new president officially abandoned the trade deal in one of his first acts after taking office.
Advocates of the TPP said it would set a “gold standard” for modern trade rules, with stringent requirements for intellectual property, labour and environmental protections. A key goal was to lead in shaping trade rules for this century, and also to counter the growing influence of China, which is not part of the pact.
VIDEO: TPP did not put ‘America’s interests first’: Trump spokesperson
Critics said the TPP would put corporate interests ahead of public and national sovereign interests.
The U.S. about-face on the deal is a setback for leaders of other TPP countries who invested political capital in fighting to get it ratified.
That includes Japanese Prime Minister Shinzo Abe, who told lawmakers during parliamentary debate that he hoped to gain Trump’s “understanding” on the TPP’s importance. Abe has said he hopes to meet with Trump as soon as possible.
Japan completed the TPP ratification process last week, well aware Trump planned to drop out. Abe said its goals were still important for Japan and the TPP could be a model for trade deals with other nations, including those in Europe.
The remaining 11 TPP members will meet to discuss the next steps, said Malaysian Second Trade Minister Ong Ka Chuan.
“Twelve countries signed the (TPP), but now one wants out. The other 11 can continue by making change to the clauses. There are many possibilities that these 11 countries can still proceed with,” the Bernama news agency quoted him as saying. He didn’t elaborate.
Other TPP members are Canada, Mexico, Chile, Peru, Vietnam and Brunei.
Turnbull said that in theory China could join the pact following the U.S. departure. But that would require a revamp of the deal. In its current form, the TPP can only take effect after it is ratified by six countries that account for 85 per cent of its members’ combined gross domestic product. The U.S. made up 60 per cent of the TPP’s combined GDP, so it could not be implemented as it stands now.
Though he didn’t suggest Trump himself would reverse his position, Turnbull did say the U.S. eventually might.
“You have to recognize that his secretary of state, Rex Tillerson, has been a longtime advocate for it,” Turnbull said, referring to Trump’s nominee. “The Republican Party in the Congress have been strong supporters of the TPP. It is possible that U.S. policy could change over time on this, as it has done on other trade deals.”
Whatever the deal’s fate, the region shows no sign of retreating from the market-opening trend that helped transform its many developing nations into a relatively stable zone of affluent, middle-income economies.
New Zealand Prime Minister Bill English said he agrees with his predecessor John Key’s view that the U.S. risks ceding some influence to China in the Pacific without the TPP.
VIDEO: President Trump signs executive order to withdraw U.S. from TPP
English showed little enthusiasm for the sort of “one-on-one” bilateral trade deal with the U.S. that Trump said he prefers.
“If you ask me today, I’d say there’s a pretty low chance of that happening in a form that we’d find satisfactory,” English told reporters in Wellington. “But we wouldn’t want to rule it out, any more than we’d want to rule out other versions of progress on free trade, with TPP or not.”
Although losing the U.S. as part of the TPP means losing nearly two-thirds of its market, English said the initiative was still advantageous for New Zealand and therefore worth pursuing.
Vietnam was expected to be one of the main beneficiaries of the TPP, and the collapse of the pact could be a blow to the economy of the Communist country, which is heavily driven by exports and foreign direct investment.
Le Dang Doanh, a senior Vietnamese economist and former government economic adviser, said the U.S. could also be hurt by its decision to drop out.
“Vietnam’s main export items to the U.S. include catfish, shrimp, garments, shoes and wooden products,” Doanh said.
“Without TPP, American consumers will have to pay more for these products.”
Trump’s threats to impose tariffs of up to 45 per cent on some imports are a big worry for most Asian countries, given the region’s heavy reliance on exports. The U.S. is the largest single market for China and Japan, and indirectly a huge source of demand for many of the commodities and goods produced across the region.
“All of us are working to see how we can ensure we maintain this momentum toward open markets and free trade,” Turnbull said. “Believe me, protectionism is not a ladder to get you out of the low growth trap. It is a shovel to dig it deeper.”
Associated Press writers Nick Perry in Wellington, New Zealand; Elaine Kurtenbach and Yuri Kageyama in Tokyo; Tran Van Minh in Hanoi, Vietnam; and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.