{"id":101471,"date":"2017-01-30T10:45:36","date_gmt":"2017-01-30T15:45:36","guid":{"rendered":"http:\/\/countingpips.com\/?p=101471"},"modified":"2017-01-30T06:47:08","modified_gmt":"2017-01-30T11:47:08","slug":"navigating-trumps-withdrawal-from-the-trans-pacific-partnership","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/01\/navigating-trumps-withdrawal-from-the-trans-pacific-partnership\/","title":{"rendered":"Navigating Trump\u2019s Withdrawal from the Trans Pacific Partnership"},"content":{"rendered":"<div id=\"inves-810897484\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">January 30, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p>By <a href=\"http:\/\/WallStreetDaily.com\/\"><u>WallStreetDaily.com<\/u><\/a> <img loading=\"lazy\" decoding=\"async\" class=\"attachment-home-th size-home-th wp-post-image\" style=\"display: block; margin-bottom: 5px; clear: both;\" src=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/01\/0117_tpp_feature.jpg\" sizes=\"auto, (max-width: 580px) 100vw, 580px\" srcset=\"https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/01\/0117_tpp_feature.jpg 580w, https:\/\/s3.amazonaws.com\/wallstreetdailywebsite\/wp-content\/uploads\/2017\/01\/0117_tpp_feature-300x155.jpg 300w\" alt=\"Navigating Trump\u2019s Withdrawal from the Trans Pacific Partnership\" width=\"580\" height=\"300\" \/><\/p>\n<p>I\u2019m tracking the first 100 days of the Trump administration very closely.<\/p>\n<p>If you look at history, the decisions the president makes through mid-April oftentimes serve as the tone-setter for his entire first term.<\/p>\n<p>Already, Mr. Trump has withdrawn from the Trans-Pacific Partnership by executive order.<\/p>\n<p>The TPP was a trade agreement between the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.<\/p>\n<p>The trade agreement\u2019s official demise will have aftershocks, I can assure you.<\/p><div id=\"inves-796738925\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>So we\u2019d be foolish not to invest alongside them.<\/p>\n<p>Put simply, in the aftermath of Trump\u2019s withdrawal, I\u2019m urging investors to immediately sell all stocks domiciled in a certain Pacific Rim country. Yet I\u2019m suddenly extremely bullish on another Pacific Rimmer.<\/p>\n<p>My senior analyst, Martin Hutchinson, has all of the details.<\/p>\n<p>Smart investing,<\/p>\n<p>Louis Basenese<br \/>\nChief Investment Strategist, <em>Wall Street Daily<\/em><\/p>\n<div class=\"wistia_responsive_padding\" style=\"padding: 56.88% 0 0 0; position: relative;\">\n<div class=\"wistia_responsive_wrapper\" style=\"height: 100%; left: 0; position: absolute; top: 0; width: 100%;\"><iframe loading=\"lazy\" class=\"wistia_embed\" title=\"Wistia video player\" src=\"\/\/fast.wistia.net\/embed\/iframe\/0u1edzev7j?seo=false&amp;videoFoam=true\" name=\"wistia_embed\" width=\"100%\" height=\"100%\" frameborder=\"0\" scrolling=\"no\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<p><script src=\"\/\/fast.wistia.net\/assets\/external\/E-v1.js\" async><\/script><\/p>\n<hr \/>\n<p><strong>Question:<\/strong>\u00a0Hi there, Robert Williams here, founder and publisher of\u00a0Wall Street Daily. I have with me today\u00a0Wall Street Daily\u2019s\u00a0distinguished senior analyst Martin Hutchinson. Now, Martin is a former U.S. Treasury adviser and Citibank VP, so his insights are second to none when it comes to geo-macro issues and the movement of money throughout the global financial system. Welcome, Martin.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Great to be with you.<\/p>\n<p><strong>Question:<\/strong> Martin, what\u2019s at the top of your radar screens today?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> The most interesting thing that\u2019s happened this week \u2013 and there have been a lot of interesting things \u2013 is President Trump stopping the Trans-Pacific Partnership trade agreement by executive action.<\/p>\n<p><strong>Question:<\/strong> This has a potential to disrupt the entire market, Martin?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> It certainly has the potential to be very important for the countries concerned, which are a couple of Latin America countries \u2014 notably Mexico \u2014 and then also a lot of close U.S. allies in the Pacific basin region. It\u2019s important on both the manufacturing and the service sides.<\/p>\n<p><strong>Question:<\/strong> If you don\u2019t mind, Martin, can we get our readers up to speed on exactly the who, the what, the why on the partnership and why this is very important?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Probably stopping the trade agreement is on balance a good thing. Because although it was called a free trade agreement, it didn\u2019t do all that much for free trade. The U.S. light trucks duty was going to be phased out only over 30 years, while the United States still didn\u2019t get full access to the Japanese meat market, which it wanted. So there wasn\u2019t a huge amount done for manufacturing. Indeed, the Congressional Budget Office saw the cost for U.S. manufacturing at $44 billion, which was balanced by a benefit of $79 billion on the service side \u2014 mostly copyright and patent fees. Because the thing this trade deal really did that was important was impose the Digital Millennium Copyright Act on the other 11 countries. And that, for example, would have allowed Disney\u2019s Mickey Mouse to charge copyright for 99 years from when it was invented in 1928. And also bring the much more detailed and complex U.S. patent arrangements for the other 11 countries, which would therefore give you a whole bunch of patent lawsuits and so on \u2014 which are not really good for free trade. Though, obviously, patents in general are necessary.<\/p>\n<p>And so on balance, it\u2019s probably beneficial that it\u2019s gone, particularly if you\u2019re interested in manufacturing, as President Trump is. Because according to the Congressional Budget Office, it was going to cost manufacturing a lot of money.<\/p>\n<p><strong>Question:<\/strong> OK, makes sense. So when you look into this, Martin, have countries emerged already in the Pacific that are going to do well and that aren\u2019t going to do well?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Yes, I think there have been some winners and losers apparent. For example, Japan was hoping to increase its manufacturing exports to the U.S. through the TPP. It\u2019s now not going to be able to do so. And that\u2019s a country with slow growth, far too much government debt, more than 200% of GDP \u2026 and a negative interest rate \u2014 very aggressive central bank. And so that looks to be in some trouble going forward.<\/p>\n<p><strong>Question:<\/strong> So you\u2019re bearish on Japan as a result of all this?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think that\u2019s right, yes. And I\u2019m sort of neutral on Australia in the sense that mineral prices as rising, so that\u2019s going to help that economy.<\/p>\n<p><strong>Question:<\/strong> And are there countries that you are bullish on?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Yes, the areas I am mostly bullish on are the Asian countries Indonesia, Malaysia, the Philippines, Thailand, Vietnam \u2014 where the IMF says that they\u2019re going to grow at 5% in 2017 and 2018. And that\u2019s pretty attractive. Of all the Asian countries, the most attractive I think is probably the Philippines.<\/p>\n<p><strong>Question:<\/strong> Tell us why, Martin.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Well the Philippine market was flat last year, but the Philippine peso dropped a bit. People were worried about the election of President Duterte; President Obama\u2019s administration didn\u2019t like him much. But actually he\u2019s pretty much committed to the free market. He\u2019s diversifying from the U.S. He\u2019s developing new trade relationships with China. But he\u2019s also pretty likely to be Trump friendly; he has a fairly similar personality. The Philippines has 6% growth \u2014 both last year and this year and probably next year. So there\u2019s some real benefit to go for in that country.<\/p>\n<p><strong>Question:<\/strong> You feel like the Philippines can be an outperformer when measured against a global market as a whole?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think so, yes. There\u2019s one particular sector that\u2019s doing well \u2014 business process outsourcing, which is growing very rapidly. And that\u2019s interesting because TPP wouldn\u2019t have made a huge amount of difference to that because you can\u2019t impose a tariff on outsourcing a business process. There are no goods crossing borders. It\u2019s all done electronically. And so that\u2019s somewhere where the Philippines I think can continue to grow.<\/p>\n<p><strong>Question:<\/strong> How can one of our readers benefit from this? Is there an individual stock to buy, perhaps an ETF? How do you recommend getting some portfolio exposure?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Most of the Philippine stocks are pretty thinly traded in the United States, if they\u2019re traded here at all. A lot of them don\u2019t have ADRs. So I\u2019d recommend in general buying a broad index ETF \u2014 the best of which is the iShares Philippines ETF (EPHE). It gives you a broad access to the market. That\u2019s around $34 currently with a 0.8% yield \u2014 and a very reasonable expense ratio of 0.62% which, given the Philippines is a fairly difficult market, is very reasonable. So that looks the most attractive way to play it, as it\u2019s a rapidly growing market,<\/p>\n<p><strong>Question:<\/strong> You favor that over any type of individual Philippine stock plays?<\/p>\n<p><strong>Martin Hutchinson:<\/strong> I think so, yes. It gives you a broad coverage \u2014 and the individual stocks, by and large, don\u2019t trade at all actively in the U.S. You\u2019d have difficulty getting in and out. Whereas with this iShares ETF, you\u2019ve got a broad access over the whole market. And basically, you\u2019re looking at the whole Philippine economy as being attractive.<\/p>\n<p><strong>Question:<\/strong> Perfect. And if you don\u2019t mind me asking, Martin, what\u2019s on tap next?<\/p>\n<p><strong>Martin Hutchinson:<\/strong>\u00a0Having looked at the Asian countries, I want to have a look at Mexico, which is the other country that\u2019s very affected by TPP ending. And they\u2019ve got an additional problem that NAFTA\u2019s going to be reviewed by President Trump, as well. And of course, they\u2019re a member of that with Canada and the U.S. But the currency has declined by about 17% in the last year. So I want to look at a way of benefiting from the currency decline without having to worry too much about trade agreements. And I think I found one.<\/p>\n<p><strong>Question:\u00a0<\/strong>Awesome. And we\u2019ll discuss that next time?<\/p>\n<p><strong>Martin Hutchinson:\u00a0<\/strong>We will, indeed.<\/p>\n<p><strong>Question:<\/strong> All right, Martin, thank you for your time.<\/p>\n<p><strong>Martin Hutchinson:<\/strong> Great pleasure.<\/p>\n<p>On behalf of senior analyst Martin Hutchinson, I\u2019m Robert Williams, signing off.<\/p>\n<p>The post <a href=\"https:\/\/www.wallstreetdaily.com\/2017\/01\/30\/navigating-trumps-withdrawal-trans-pacific-partnership\/\" rel=\"nofollow\">Navigating Trump\u2019s Withdrawal from the Trans Pacific Partnership<\/a> appeared first on <a href=\"https:\/\/www.wallstreetdaily.com\" rel=\"nofollow\">Wall Street Daily<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By WallStreetDaily.com I\u2019m tracking the first 100 days of the Trump administration very closely. If you look at history, the decisions the president makes through mid-April oftentimes serve as the tone-setter for his entire first term. Already, Mr. Trump has withdrawn from the Trans-Pacific Partnership by executive order. The TPP was a trade agreement between [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-101471","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=101471"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101471\/revisions"}],"predecessor-version":[{"id":101480,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/101471\/revisions\/101480"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=101471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=101471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=101471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}