Media flip out over Trump suggestion that US may rejoin TPP

Donald Trump told Republican senators yesterday he had instructed his trade representative and chief economic adviser to look into the possibility of reopening negotiations to rejoin the Trans Pacific Partnership, the huge 11-nation, multilateral trade agreement that the U.S. withdrew from last year.

The media immediately took the news as a sign that Trump is going to betray his base by accepting a deal he had spurned both on the campaign trail and in his first months as president.

But Trump tweeted out later that the U.S. would rejoin the pact only if the U.S. could get "substantially better" terms. 

Reuters:

In his Twitter post, which came during Asian trading hours, Trump said the United States would "only join TPP if the deal were substantially better than the deal offered to Pres. Obama.  We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!"

Policymakers in the Asia-Pacific region on Friday responded to the possibility of the U.S. rejoining the trade deal with scepticism.

"If it's true, I would welcome it," Japanese Finance Minister Taro Aso told reporters after a cabinet meeting on Friday and before Trump's tweet.  Aso added that the facts needed to be verified.

Trump "is a person who could change temperamentally, so he may say something different the next day", Aso said.

Australian Prime Minister Malcolm Turnbull, commenting after Trump's tweet, said it would be "great" to have the U.S. back in the pact though doubted it would happen.

"We're certainly not counting on it," Turnbull told reporters in Adelaide in South Australia.

The TPP, which now comprises 11 nations, was designed to cut trade barriers in some of the fastest-growing economies of the Asia-Pacific region and to counter China's rising economic and diplomatic clout.

Trump, who opposed multilateral trade pacts in his election campaign in 2016 and criticized the TPP as a "horrible deal", pulled the U.S. out of the pact in early 2017.  He argued bilateral deals offered better terms for U.S. businesses and workers, and signaled an intention to raise trade barriers.

Trump signed an executive order withdrawing from TPP just three days after his inauguration.  But all along, Trump has maintained that he is willing to renegotiate certain parts of the agreement in order to give the U.S. a better deal.

Even with renegotiation, the forces arrayed against the TPP make approval in this Congress an impossibility.  Not only do all major unions oppose the deal, but most of the blue-collar, working class voters who helped elect Trump are opposed as well.

So why signal an intent to reopen negotiations? 

But Trump is struggling to get support from other countries for his recent threat to impose import tariffs on China and the U.S. farm lobby is arguing that retaliation by China would hit American agricultural exports.

Trade experts believe Trump is probably trying to placate his political base in the wake of criticism over the U.S.-China China tariff standoff.

"Well I think you have to take it seriously but I think there is an enormous chance that this is simply posturing or a tactical decision taken to placate concerned governors and senators from agricultural states that could be affected by China imposing tariffs," said Charles Finny, a Wellington-based trade consultant and a former New Zealand government trade negotiator.

As with all multilateral trade agreements, the U.S. is put at a disadvantage with the TPP compared to other big economies.  Quite simply, other nations believe we have to give more at the negotiating table because we're the biggest kid on the block.  But there is a limit to saddling the U.S. with disadvantages in trade, and the TPP exceeds it.

Trump said nothing yesterday that he hasn't said before, but the media pounced on his suggestion immediately as a sign that Trump is going to abandon his protectionist policies.  That's not going to happen, despite the knee-jerk reaction from many in the press.

Donald Trump told Republican senators yesterday he had instructed his trade representative and chief economic adviser to look into the possibility of reopening negotiations to rejoin the Trans Pacific Partnership, the huge 11-nation, multilateral trade agreement that the U.S. withdrew from last year.

The media immediately took the news as a sign that Trump is going to betray his base by accepting a deal he had spurned both on the campaign trail and in his first months as president.

But Trump tweeted out later that the U.S. would rejoin the pact only if the U.S. could get "substantially better" terms. 

Reuters:

In his Twitter post, which came during Asian trading hours, Trump said the United States would "only join TPP if the deal were substantially better than the deal offered to Pres. Obama.  We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!"

Policymakers in the Asia-Pacific region on Friday responded to the possibility of the U.S. rejoining the trade deal with scepticism.

"If it's true, I would welcome it," Japanese Finance Minister Taro Aso told reporters after a cabinet meeting on Friday and before Trump's tweet.  Aso added that the facts needed to be verified.

Trump "is a person who could change temperamentally, so he may say something different the next day", Aso said.

Australian Prime Minister Malcolm Turnbull, commenting after Trump's tweet, said it would be "great" to have the U.S. back in the pact though doubted it would happen.

"We're certainly not counting on it," Turnbull told reporters in Adelaide in South Australia.

The TPP, which now comprises 11 nations, was designed to cut trade barriers in some of the fastest-growing economies of the Asia-Pacific region and to counter China's rising economic and diplomatic clout.

Trump, who opposed multilateral trade pacts in his election campaign in 2016 and criticized the TPP as a "horrible deal", pulled the U.S. out of the pact in early 2017.  He argued bilateral deals offered better terms for U.S. businesses and workers, and signaled an intention to raise trade barriers.

Trump signed an executive order withdrawing from TPP just three days after his inauguration.  But all along, Trump has maintained that he is willing to renegotiate certain parts of the agreement in order to give the U.S. a better deal.

Even with renegotiation, the forces arrayed against the TPP make approval in this Congress an impossibility.  Not only do all major unions oppose the deal, but most of the blue-collar, working class voters who helped elect Trump are opposed as well.

So why signal an intent to reopen negotiations? 

But Trump is struggling to get support from other countries for his recent threat to impose import tariffs on China and the U.S. farm lobby is arguing that retaliation by China would hit American agricultural exports.

Trade experts believe Trump is probably trying to placate his political base in the wake of criticism over the U.S.-China China tariff standoff.

"Well I think you have to take it seriously but I think there is an enormous chance that this is simply posturing or a tactical decision taken to placate concerned governors and senators from agricultural states that could be affected by China imposing tariffs," said Charles Finny, a Wellington-based trade consultant and a former New Zealand government trade negotiator.

As with all multilateral trade agreements, the U.S. is put at a disadvantage with the TPP compared to other big economies.  Quite simply, other nations believe we have to give more at the negotiating table because we're the biggest kid on the block.  But there is a limit to saddling the U.S. with disadvantages in trade, and the TPP exceeds it.

Trump said nothing yesterday that he hasn't said before, but the media pounced on his suggestion immediately as a sign that Trump is going to abandon his protectionist policies.  That's not going to happen, despite the knee-jerk reaction from many in the press.