I couldn’t believe my ears. I was watching the news on TV when a reporter stated that the republican President Donald Trump was considering his prior decision not to have the US join in with other countries in the Trans-Pacific Partnership (TPP) trade agreement which included the other countries of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam. Under President Obama’s administration, the US had signed on around the 4th of February 2016, but since it was not ratified as required, it did not take effect under President Trump’s administration.
The other countries have formed another trade agreement without the USA. This trade agreement had been established to have countries work together to blunt the aggressive trade policies of China.
Recently, the US president had announced plans to enact tariffs on imports from China whereupon, China announced tariffs on farm products which are grown in many of the states where its voters had supported Mr. Trump to become our US president.
The worry has been that this plan could set off a trade war, where there are no winners. When the president announced these plans, the stock market reacted in a quick downturn for several days. There were many business experts stating for the record that China is indeed guilty of cheating on current trade agreements but the establishment of tariffs was the worst possible way to fix this real problem. Many wondered why the president didn’t just have the US participate in the TPP trade agreement, designed to work around China’s aggressive trading practices.
It is my opinion that the TPP agreement needed to be adjusted to provide a safety net/ options for workers who could be left behind, but if this was fixed, then the TPP is the best route to blunt China’s trade tactics.
But reentering the TPP would not be a cake walk. The 11 other countries had to work to reach their own trade deal this year, and it is unclear as to what conditions officials from the other countries would demand before they would restart the entire process again with the United States. On the plus side, the deal would be much stronger with U.S. participation, since it is the world’s largest economy but several countries in the deal may suffer some skepticism and hesitancy to act because of the president’s mood swings on trade.
Frankly, I am skeptical about the president’s rethinking on this subject being more than a brain fart as this would be a smart move on his part.
Here is the rest of the story…
On April 12, 2018, Erica Pandey of Axios penned the following report, “Trump is flirting with re-entering TPP talks”
President Trump deputized his chief economic adviser Larry Kudlow and his top trade negotiator Robert Lighthizer to take a fresh look at at re-entering Trans-Pacific Partnership negotiations, a source with knowledge of the meeting confirmed to Axios. Sen. Ben Sasse told reporters about the meeting earlier today.
Flashback: TPP was spearheaded by Barack Obama and designed in part to counter the rise of China. Trump signed an executive order pulling the U.S. out of the deal in January 2017, and the 11 remaining signatories came to a new agreement in March.