There is growing speculation that the largest EMs might step up to fill the void left by the US in the event of a protectionist shift under President Trump. However, there are good reasons why intra-EM trade deals – or indeed EM-led global trade deals – might struggle to get off the ground and, even if they do, why the economic impact might be smaller than many anticipate. First, while several EMs clearly sense an opportunity from any pull-back by the US, there are significant practical challenges to them picking up the free-trade mantle. In particular, the trade agreements that have been proposed by EMs – including China’s Regional Comprehensive Economic Partnership (RCEP), which has been floated as a rival to TPP – have typically focussed on lowering trade tariffs. Yet after two decades of globalisation, these are already at historic lows.
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