TPP and the UK Supreme Court rule

The new US president Trump pulls the US out of TPP and today the UK Supreme Court rules the Parliament must vote on triggering Article 50. The first part shows that the protectionism is growing in the US; and the second part shows that the timetable of Brexit will be rescheduled and many of the Brexit details will be renegotiated in the UK parliament before the UK officially triggering Article 50.

The US quits TPP makes the future of TPP clouded. If there is no strong government that is willing to fill in the gap created by the US withdrawal, TPP may not survive. However, the US withdrawal opens the door of TPP to many other economies including China. TPP targets to boost trade and deepen economic ties between member countries. Trump is very likely to raise tariffs on imports, this could influence the Chinese economy as well as the Indian economy and many other economies (given the Indian economy's dependence on exports increases faster than the Chinese economy's dependence on exports). Joining TPP becomes attractive to some economies which depend on their exports. For example, if China can join, China may be able to increase its exports to these TPP member countries. Moreover, as Australia is also a member country and has very rich natural resources, China could import cheap natural resources as raw materials for its own industries and even further lower its exports' prices and boost its exports. To Australia, it is good to have China joining TPP as Australia can exports more and imports more to and from China, it is a win-win situation.

On the other side, the UK Prime Minister, May, has lost her control on the timetable of Brexit. She has to convince the Parliament that how the negotiation with the European Union can benefit the UK. She may have to change some of the details she previously raised, for example, she previously stated that she could accept the UK to lose its access to the European single market in order to gain a complete control on migration. In addition, the strong opposition from the Scottish MPs will even try to cancel the Brexit plan. There is a certain thing that can be foreseen that triggering Article 50 will be delayed. A lot more details about Brexit will be discussed openly, as the MPs are from different regions and represent different groups' interests, it will take a lot of time to get the Parliament to widely agree on the Brexit, in terms of the time of triggering Article 50, negotiation details and etc. As the Parliament may have a long period of discussion and debate around this issue, the UK financial markets may experience a long period of volatility as well and the companies in the UK are facing more uncertainties, especially when all kinds of news and gossips are spreading across the economy.

Overall, more uncertainties are created around the issues of TPP and Brexit. The American withdrawal from TPP could give more opportunities to other non-member countries. The UK Supreme Court's rule on Brexit is likely increase the market volatility and risk for a long period till the UK Parliament finally agrees on the details about Brexit.