US Exit From TPP May Bring Latin America Closer to China

Thursday, 26.01.2017

US Exit From TPP May Bring Latin America Closer to China

US Exit From TPP May Bring Latin America Closer to China

Donald Trump has decided to exit from the preferential trade agreement Trans-Pacific Partnership (TPP). Sputnik talked to economist Daniel Carpio about how this decision will affect Latin American countries.

Mexico, Chile and Peru are the three Latin American countries belonging to the TPP according to the agreement signed in 2016, but it has not yet entered into force.

Trump’s decision “will not have a material impact on Peru,” Peruvian economist Daniel Carpio toldSputnik Mundo.

“We have signed a free trade agreement with the US which brings us about half a billion dollars. With the TPP we were looking for new markets, primarily in Asia,” he added.

However, with the exit of the United States, other countries are also pulling out now. For example, Japan stated that the treaty does not make sense without the participation of the United States.

Dorotea López, professor of economics at the Institute of International Studies at the University of Chile also spoke with Sputnik Mundo saying that Trump’s decisions “are more political in nature.”

She explained that Chile has signed a number of bilateral agreements with most of the countries, so the income earned in the country within the TPP, was not “economically significant.”

This measure has however, paralyzed much of the political capital that Chile had invested in the TPP, so in that sense it is a big loss, according to Lopez.However, according to the Peruvian expert, Chile, which is the largest exporter of copper, eventually will be able to benefit if Trump will keep his promises to revive the US economy through major construction projects.

“To achieve this the US will require a lot of copper. Since the elections the price for copper has increased significantly,” Carpio said.
Lopez however, did not hurry to make such a conclusion.

She did, however, say that the country was hoping for cooperation with China. The professor recalled that in his speech at the International Forum in Davos, Chinese President, Xi Jinping, called for free trade.

Chile depends on China as its main trading partner so it is possible that it will “strengthen its position” in South America, stressed López.

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