Europe and China under pressure with likely TPP agreement

The TPP agreement is almost a done deal and looks like it has been strategically closed before the new round of TTIP negotiations to pressure Europe. Two of the three biggest world economic powers, the United States and Japan, have managed to create the biggest trade deal in the world. It is a milestone which will determine the basis for global trade in the 21st century.  Although many critics tremble thinking that a strong import economy like the U.S. could be hit by a flood of new imports, I personally think it could have the completely opposite effect.

The TPP agreement will stimulate international commerce in the Pacific.  The other countries which have signed the accord besides Japan and the U.S. are Canada, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.  There will be endless opportunities for North American companies that want to export, since in many foreign markets the quotas and taxes are too high. In addition, North American products are well regarded abroad and the regulations for emerging markets within this open market will most likely be standardized following the North American standards. This will be a great advantage over other less regulated economies. With regard to American taxes and tariffs on foreign products, they are generally not too high, so even if they increase, the difference will not be extreme. From my point of view, the outlook for U.S. companies it is without a doubt very positive.

What about the previously negotiated TTIP? This agreement is definitely in an even more delicate position now. Certain sectors such as European agriculture rejected the TTP and, at the same time, the American trade policy shifted toward Asia.  Both jeopardize the TTIP agreement. We should be asking ourselves: “Now what? Can Europe afford to be left out of this global economic game?” All eyes will be on the next round of negotiations for the TTIP which will be held in Miami from October 19 to 23. Stay tuned.

And last but not least: “What will happen to China?”  The strategic objective of creating a region which is strong enough to overshadow the gigantic Asian market without closing doors has been consolidated with the TTP. Is China really willing to play the game of total market globalization? We will have to wait and see where the relationship converges. We won’t try to analyze future geopolitical decisions, but we can affirm that this type of accord will foment trade and signify a major connection among economic partners.  As freight forwarders and international shipping company, will reinforce our ocean freight route to Mexico, continue to ship containers to Vietnam, Japan, and Peru and our ocean freight to Australia.  And we have also bet on the Taiwanese market by creating a new Door-to-Door service to Taiwan. Now, more than ever, the United States must look toward Asia.

Carlos Hernández, iContainers Co-founder and Global Managing Director

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