What is Trans-Pacific Partnership?

Australia and New Zealand said on Tuesday they hope to salvage the Trans-Pacific Partnership (TPP) by encouraging China and other Asian countries to join the trade pact after US President Donald Trump kept a promise to abandon the accord. The TPP, which the United States had signed but not ratified, was a pillar of former US President Barack Obama's policy to pivot to Asia, without China in an effort to write Asia's trade rules before Beijing could, establishing US economic leadership in the region.

TPP is an attempt to bring together some of the diverse economies that abut the Pacific Ocean - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam - and accounts for a whopping 40 per cent of the global economy. The agreement was designed so that it could eventually create a new single market, something like that of the EU. But all 12 nations need to ratify it, before it could come into effect.

The finalized proposal was signed on 4th February 2016 in Auckland, New Zealand, concluding seven years of negotiations. It currently cannot be ratified due to US withdrawal from the agreement on 23 January 2017. The TPP contains measures to lower both non-tariff and tariff barriers to trade,and establish an investor-state dispute settlement mechanism.Japanese Prime Minister Shinzo Abe has touted it as an engine of economic reform, as well as a counter-weight to a rising China, which is not a TPP member.

China has proposed a counter pact, the Free Trade Area of the Asia Pacific (FTAAP) and has championed the Southeast Asian-backed Regional Comprehensive Economic Partnership (RCEP). Fulfilling a campaign pledge, Trump signed an executive order in the Oval Office on Monday pulling the United States out of the 2015 TPP agreement and distancing the United States from its Asian allies.